European Commission: Debt sustainability monitor 2019

24 January 2020

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