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The European Central Bank’s (ECB) purchase of government and corporate bonds has swollen its balance sheet to a record £4.19 trillion (4.66 trillion euros). Brussels hoped the mass purchase would supply EU markets with money, and lower interest rates, to boost the economy following the 2008 financial crash. Despite striking a deal with the EU over its budget plans this month, Italy’s debt has grown to £1.8 trillion (two trillion euros).

ECB debt is more than £4.19 trillion with Italy government debt £1.8 trillion

But with Italy holding such large debt the ballooning of the ECB balance sheet to 41.6 per cent of the Eurozone’s annual economic output is “insane”, according to German economists Matthias Weik and Marc Friedrich. Writing in news website Infosperber they said: “The mass purchases are now legal, but they are crazy, as they drive the economic damage maximisation. “As a result, we continue to hold on to a currency that we predict is doomed to fail.” The Italian populist government has been locked in a row between the EU over its spending plans.

Italian PM Giuseppe Conte and Jean-Claude Juncker before Rome agrees budget deficit deal

The mass purchases are crazy, as they drive the economic damage. We hold on to a currency that we predict is doomed to fail Economists Matthias Weik and Marc Friedrich

The Five Star Movement and The League coalition wanted to raise its budget deficit to 2.4 per cent to pay for higher pensions and minimum wages for the unemployed, but was forced to accept 2.04 per cent. But Italy’s EU membership and the ECB’s asset purchase scheme is allowing Rome to take advantage of lower yield - or interest rates - on its government bond, meaning it can borrow more cheaply. Mr Weik and Mr Friedrich wrote: “Italy is not emerging from the crisis. “The country continues to suffer from high unemployment, extremely high youth unemployment and is deeply indebted.

“Nevertheless, thanks to the ECB and membership of the eurozone, the country is able to continue to take up debt much cheaper than it was 20 years ago “This is economic madness.” As part of the ECB’s “PSPP sub-programme”, the central bank bought government bonds worth more than £2.25 billion (2.5 billion euros) since March 2015. A German court asked the the European Court of Justice (ECJ) for a legal assessment of the asset purchase scheme, suggesting it could violate the ECB’s mandate.

Mario Draghi, president of the ECB, has overseen purchase scheme of government and corporate bonds