The outcome holds not only for the increase in public debt, but also for that part of the debt that needs recycling every year. Interest payments take already some 15% of the government current resources, and are larger than the education budget and very much larger than government investments. -  The increased interest on government instruments reverberates to private ones.
This is the second effect. We know that the yield on government bonds serves as a benchmark for pricing long-term loans, like mortgages. The increased deficit level in the current year casts already some doubts about the future trend of the cost of mortgages. Another example has to do with the government initiative to commission private entrepreneurs to invest in infrastructure (the so-called P.F.I.).