The recent surge in Rome’s borrowing costs show investors are positioning for a combination of weak growth and high debt, outgoing Bank of Italy Governor Ignazio Visco told the Financial Times.

“Obviously you need to understand why markets may be worried,” Visco said. “I don’t think it is speculation against the country. It is basically a concern about  the long-term potential growth rate of the economy.”

Investors are offloading Italian debt as nerves fray over Prime Minister Giorgia Meloni’s spending plans along with sluggish growth. That’s widened the nation’s risk premium to levels that have previously irked European Central Bank policy makers. Under its final budget plan, the government targets a wider budget deficit than previously set this year and next.

Italy’s 10-year yield premium over its German counterpart rose to a nine-month high on Friday. The spread surpassed 200 basis points, a closely watched level by investors.

Visco, who’ll be replaced next month by ECB’s Fabio Panetta after leading the nation’s central bank for 12 years, urged Meloni to recognize that international investors have legitimate concerns with rising interest rates, high energy costs, tensions in the global trading system, and Italy’s rapidly aging population, according to the FT.

“This is why you have to respond to the markets with two things: First, a view of the longer-term plan for growth, and second, the action on the short and medium term as far as the fiscal imbalances are concerned,” Visco said in the interview.