MILAN (AP) — Italian public debt has swelled to its highest ever level, reaching €2.014 trillion ($2.64 trillion) in October, the Bank of Italy said Friday — highlighting the country’s fragile financial state in spite of the raft of austerity measures and reforms imposed by Prime Minister Mario Monti.

The Italian economy, the third-largest among the 17 European Union countries that use the euro, is in recession as the government has enacted spending cuts and tax hikes to get a handle on its debt.

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