The Debt Sustainability Monitor 2019 provides an overview of fiscal sustainability challenges faced by EU Member States over the short, medium and long term.
Despite an overall less favourable short-term fiscal outlook, projected debt to GDP ratios for the EU/EA as a whole should continue declining over the next decade (reaching 70% and 75% of GDP respectively by 2030). The persistent favourable financial environment (as reflected by financial markets’ expectations) should enable further reducing aggregate debt ratios, even under unchanged policies. When taking into account a large range of possible temporary shocks to macroeconomic variables (through stochastic projections), the EA public debt ratio is found to have a high probability to decline in the next 5 years (probability close to 90%). Moreover, the gap to the debt-stabilising primary balance appears slightly negative for the EU/EA (at -0.4 pps. of GDP), meaning that a slight overall fiscal deconsolidation would still be consistent with a stable debt to GDP ratio. At the same time, aggregate results hide important cross-countries differences, and risks remain heterogeneous across the EU and over different time dimensions. As fiscal policies are largely under national responsibility, this country – specific analysis of fiscal sustainability risks is essential.
Full paper
© European Commission
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article