Investment Risk Italy has one of the largest economies in Europe and one of the ten largest in the world. However, this has not prevented the continuing deflation that Italy is experiencing. Italy has seen very disappointing results, with growth declining by around 7% over the past five years. Italy has a huge state debt for which it needs to develop growth so it can prevent further debt and begin to reduce the debt which currently represents 130% of its gross domestic product ($2.014 trillion: 2012). With the government's budget of nearly $1.1 trillion, Italy began paying $52 billion to private companies. The Italian government has also started using funds to guarantee bank loans to small and medium-sized businesses. These, along with the sale of BTP Italia totaling nearly $90.42 billion, have helped Italian bonds gain about 5.1% this year and Italy emerge from a two-year recession (Armstrong , 2013). This high demand for BTP Italia will allow the Treasury of Rome to slow down the supply of its medium and long-term bonds. This will also reduce the cost of borrowing for governments, according to Chiara Cremonesi, fixed income strategist at UniCredit in Milan. One problem, however, is that in 2017 the last bonds issued will expire, the medium and long-term ones, valued at around 20% of GDP. The design and hope of these BTP Italia is the attraction of the same families in the country who could be a new and possibly more stable buyer. With bank lending to Italian households and non-financial businesses having steadily contracted for more than a year, this is a positive sign for Italian governments (Emsden, 2013). According to Fabrizio Saccomanni, Italian Economy Minister and former deputy governor of the Bank of Italy, ...... middle of the paper ......nza Bond addressed directly to mum and dad. Retrieved November 6, 2013, from Wall Street Journal Online: http://blogs.wsj.com/moneybeat/2013/11/06/italys-30-billion-bonanza-bond-aimed-squarely-at-mom-and -pop /?KEYWORDS=inflation+italyFrye, A. (2013, 12 November). Italy seeks to loosen rules on REITs to attract $1.3 billion a year. Retrieved November 13, 2013, from Bloomberg Online: http://www.bloomberg.com/news/2013-11-13/italy-seeks-to-ease-reit-rules-to-attract-1-3-billion- a -year.htmlMattich, A. (2013, October 28). In Italy, the ECB is fighting the unfavorable demographic situation. Retrieved November 6, 2013, from Wall Street Journal Online: http://blogs.wsj.com/moneybeat/2013/10/28/in-italy-ecb-battles-poor-demographics/?KEYWORDS=inflation+italyThe World Bank and the International Finance Corporation. (2013). Doing Business 2014, Economic Profile: Italy. Washington, DC: World Bank Group.