Eurozone public debt sustainability: Make hay while the sun shines
- 31 July 2023 (5 min read)
Key points
- Recent but significant improvements in public-debt-to-GDP ratios across the Eurozone are unlikely to persist in the medium-run. History is no reassuring guide
- Our simple public debt sustainability analysis suggests debt ratios should edge down over the next two years. After that, risks are skewed to the upside. Countries should take advantage of this short time window to take action.
- We examine new EU fiscal rules, and the difficulty of agreeing these across the Eurozone in a timely fashion
- The prospect of an NGEU 2.0 would likely be more influential on the market and could prove more crucial for the future of the Eurozone
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