Abstract: In the spring of 2010, Greek sovereign debt crisis suddenly broke out, which caused the Eurozone that had not recovered from the global financial crisis to get into predicament that lasts till now. More and more countries which have larger shares of the GDP in the EU have been involved. This shows that it is important to study further on the factors that influence the European sovereign debt crisis. The empirical analysis based on selected Italian annual and quarterly macroeconomic indicators shows that public finance expenditure, interest rates and macroeconomic climate index have positive impact on the long--term debt. However, the exchange rate, long--term national debt yield and current account balance have negative impact. Moreover, public finance expenditure and exchange rate bring prominent impact on the scale of public debt through transmission in several periods. The European governmental authorities should carry out the structural reform starting from the transmission mechanism of the important variables so as to eventually get out of the crises.

Key words: Italy, sovereign debt crisis, influence factors, empirical test