For the risk new debt crisis in the eurozone, in a context of high interest rates and an increase in fiscal deficits, a high-ranking official of the European Central Bank warned today Monday.

“Further increased funding costs and less prudent fiscal policies could raise concerns about the sustainability of government debt, particularly in countries where debt levels are already high,” he warned. Luis de Guidos, vice president of the ECB, in a speech he delivered in Frankfurt.

Today the country that causes the most concerns for its high public debt is Italy. However, during the current period spreads in the government bond markets – the difference in yield between the benchmark German bond and those of other eurozone countries – “remain limited”, reassured the central banker.

Indeed many governments have achieved “cheap financing for longer periods during the period of low interest rates”.

But the ECB’s interest rates are at their highest level today, chief among them at 4%, to rein in the excessively high inflation seen after energy prices rose.

De Guidos argued today that the ECB will keep interest rates high ‘for quite some time’ to “make a significant contribution” to the achievement of the 2% inflation target.

At the same time, fiscal policy in the eurozone should aim to make the economy “more productive and gradually reduce the high public debt”, he underlined.