Global public debt in advanced economies has grown by 30% between 2007 and 2019, according to the World Bank. In the euro area, the aggregate government debt-to-GDP ratio in the same period rose from 65,9 % to 85,9% – one-third more debt compared to the pre-crisis level. Except for very few countries, the fiscal rules of the SGP have not been obeyed.
The economic consequences of the current Covid-19 crisis are worsening the situation and increasing the heterogeneity of fiscal performance across euro area member states.
In such a context, the objective if this session is to discuss the appropriate policy mix in the euro area and to assess the main elements of the reform of the Stability and Growth Pact.
Points of discussion
How should monetary and fiscal policies address the very high levels of public debt in Europe?
What should be the main elements of a reform of the Stability and Growth Pact?