According to ECB governing council member Ignazio Visco, the EU should consider creating a sinking fund to control public debt accumulated by member states during the COVID-19 pandemic in the last 2 years.

"The pandemic demonstrated the limits of the current EU in the absence of a common budgetary capacity," said the Bank of Italy governor at an annual 'World Savings Day' event.

 

According to Visco, Italy should accelerate the reduction of its public debt burden after the crisis, in order to prevent future risk of instability. "If the economy continues to perform better than predicted, it will be crucial to take advantage of this to lower the deficit."

He also stated that supply bottlenecks were beginning to affect Italy, and cautioned that the impact could weigh on prices and production for longer than anticipated.

Visco mentioned that bank deposits held by households and businesses had increased by €200 billion ($232.80 billion) during the COVID-19 pandemic, but that this cash pile would diminish as consumption recovered.