Public Debt Developments in the EU
Posted: 19 Jul 2011 Last revised: 22 Dec 2011
Date Written: June 1, 2011
Following the financial crisis in 2008/09, concern on some EU countries’ public debt has continued to deepen in 2010/2011. As of May 2011, Greece, Ireland and Portugal have resorted to the joint EU-IMF’s support, and economists now acknowledge a debt crisis in the Euro Area. If at first the issue was to decide between stimulus and consolidation, now consensus seems to prevail on a quick consolidation of public finances. The objective of this report is to understand in which way the financial crisis has caused the deterioration of the debt/GDP ratio, and to assess the fiscal adjustment required for its sustainability.
Notice: This report includes a comprehensive note on Public Debt equations in Appendix II
Keywords: public debt, fiscal adjustment
JEL Classification: H6
Suggested Citation: Suggested Citation