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Assessing Public Debt Sustainability in EU Member States: A Guide

Author(s): Katia Berti and Giuseppe Carone

Assessing Public Debt Sustainability in EU Member States: A Guidepdf(2 MB) Choose translations of the previous link 

Summary for non-specialistspdf(42 kB) Choose translations of the previous link 

Analysing recent and prospective public debt developments and risks to debt sustainability is crucial for EA countries and the EU as a whole to be able to formulate appropriate policy responses. To this aim, the Commission services (Directorate General for Economic and Financial Affairs) conduct, on a regular basis, detailed public debt sustainability analysis.

Aim of this paper is indeed to illustrate the methodological approach used by the Commission to carry out, in a systematic and harmonised way, debt sustainability analysis for EU countries. The toolkit used encompasses traditional (deterministic) public debt projections, accompanied by sensitivity analysis, and stochastic debt projections. Brand new tools have recently been integrated in the framework to ensure a more comprehensive assessment of risks to public debt sustainability (capturing risks arising, for instance, from the structure of public debt financing and from government's contingent liabilities). The paper provides an accurate description of all the analytical and reporting tools included in the European Commission's debt sustainability analysis framework.

(European Economy. Occasional Papers 200. August 2014. Brussels. PDF. 52pp. Tab. Graph. Ann. Bibliogr. Free.)

KC-AH-14-200-EN-N (online)KC-AH-14-200-EN-C (print)
ISBN 978-92-79-38812-5 (online)ISBN 978-92-79-38813-2 (print)
doi: 10.2765/88866 (online)doi: 10.2765/88909 (print)

JEL classification: E62, H62, H63, H68

Occasional Papers are written by the staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and cover a wide spectrum of subjects. Views expressed in unofficial documents do not necessarily reflect the official views of the European Commission.