Italy's debt chief to retire ahead of election - sources

MILAN, Dec 18 (Reuters) - The veteran bureaucrat responsible for Italy's debt mountain, senior treasury official Maria Cannata, plans to retire in February after 17 years in the job, to be replaced by her long-time deputy, sources said on Monday.

Italy has around 2.3 trillion euros ($2.71 trillion) in public debt, or 132 percent of gross domestic product, the heaviest debt burden of any of the major euro zone economies.

Cannata, 63, who has managed debt operations over two major financial crises, wants to leave before general elections that are expected in March, when economy minister Pier Carlo Padoan is also tipped to end his government career, the sources said.

Cannata and Padoan have had a good working relationship since the latter became minister four years ago, they added.

Cannata will be succeeded by her deputy, Davide Iacovoni, 48, a signal to investors that there will be no sharp change to debt management policies. In recent days, Italian debt yields have risen from one-year lows on political concerns ahead of the election, where no one party is expected to secure a majority.

"For the market, the continuity represented by Iacovoni is better than an external, political candidate plucked from outside," said one source from a major bank involved in treasury debt operations.

Italy's treasury declined to comment.

($1 = 0.8478 euros) (Additional reporting by Elvira Pollina; Editing by Mark Bendeich)