Debt ratio of eurozone countries drops noticeably
A good economic situation and the persistently low interest rate policy are responsible for overall debt ratios among the 19 eurozone countries . In 2017, total debt as a percentage of gross domestic product (GDP) fell by an average of 2.3 percentage points. The new debt ratio has also fallen significantly.
Falling government debt and budget surpluses
Eurostat , the European statistics office, has published current figures on the overall economic situation in the eurozone and the individual euro countries. After that, the total debt ratio fell from 89 percent of GDP in 2016 to 86.7 percent in 2017. The new debt has also fallen. The budget deficit in 2016 was still 1.5 percent for the eurozone countries. In 2017, this value has dropped to 0.9 percent. The euro countries spent a good 99 billion euros in 2017 more than in the previous year. Thanks to the good economy and the resulting increase in tax revenues, the revenue side of most euro area countries has grown much faster than the expenditure side.
Many eurozone countries even recorded a budget surplus . Including Germany with 1.3 percent of GDP . Even Greece was able to achieve a budget surplus thanks to reforms and tight savings. This is 0.8 percent for 2017 - without the interest charges, the surplus is even four percent. Thus, Greece has clearly exceeded the agreed goals of international donors.
Unequal distribution of public debt
In addition to the positive figures, however, some eurozone countries continue to be in a strained situation. Including Spain and Portugal , both lagged behind with three or more percent budget deficit in 2017. For both countries this means that total debt continued to rise. With 98.3 percent of total debt to GDP in the case of Spain and 125.7 percent in the case of Portugal, both countries significantly exceed the allowed debt ratio of 60 percent . After all, the target of three percent budget deficit in the year (new debt ratio) is hardly exceeded.
In addition to Spain and Portugal, other eurozone countries are also burdened with high debt levels. Despite the better situation, Greece now continues to account for 178.6 percent of total schools in GDP. Italy with 131.8 percent and Belgium with 103.1 percent continue to miss the targets clearly. Top class here is Estonia with just nine percent. Luxembourg with 23 percent follows behind.
Debt and new debt standards difficult for many eurozone countries
Estonia and Luxembourg are among the six countries that have complied with both provisions of the Maastricht Treaty last year. The Netherlands, Latvia, Lithuania and Slovakia are the other four. Germany has now reduced its debt to 64.1 percent - the target is thus just barely met .