EU Public finances have improved

The indicator captures  risks of fiscal stress in the upcoming year. Such risks can be linked to either fiscal slippages and/or macro-financial imbalances. A value of the indicator above its critical threshold signals risks of fiscal stress.

The critical threshold, marked in the graph as a dotted line, has been statistically determined by analysing the behaviour of a large set of fiscal and macro-financial variables ahead of past episodes of fiscal stress in advanced economies. This indicator has been developed by the Commission and introduced in its fiscal sustainability assessment framework in 2012.