MILAN, Feb 16 Reuters Elisabetta Trevisan, a 50yearold teacher from Venice, plans to use interest payments from an Italian bond for small savers to help put her two sons through university.

The three bonds she bought for 40,000 euros 43,100 carry an annual coupon of up to 4.5, a healthy markup on other savings options, with payments every three or six months.

With a 0.001 annual interest rate from my bank account, I would have earned four cents!, Trevisan told Reuters.

Trevisan is one of thousands of ordinary Italians who bought part of Rome39;s 2.4 trillion euro public debt in 2023, attracted by enticing returns and fearing skyhigh inflation could erode the value of their cash.

The government managing a debttoGDP ratio of around 140, the second largest in the euro zone rode that wave, aware that small savers are less likely to pull out their money in a potential crisis and their trust in Rome39;s debt encourages foreign investors.

The campaign was successful with the share of BTPs or Buoni del Tesoro Poliennali Medium to longterm Treasury bonds held by domestic retail buyers jumping from 6 in mid2022 to 13.5 by October, its highest level since 2014, Bank of Italy data showed.

However, analysts warn that the trend will lose some steam this year, possibly weakening a key pillar in the Treasury39;s strategy to find buyers for one of the world39;s largest public debt piles.

This, they say, is mainly because the prospect of European Central Bank interest rate cuts…