The effects of the spread on the national deficit and public debt are not immediate, but they are seen when the next BTP is issued. If the spread is high when a new BTP is issued, the new bonds will probably adapt to the performance of the secondary market, costing the Government more.
A BTP-Bund spread may also affect businesses and households, not just the government coffers. Indeed, a high spread mostly likely translates into higher interest rates. Banks would suffer the consequences, as they would then be forced to pay more to raise funds and would earn less on the government bonds that they own, driving them to charge more for financing and loans.
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