The size and composition of government debt in the euro area
AbstractThis paper explains the various concepts of government debt in the euro area with particular emphasis on its size and composition. In terms of size, the paper focuses on different definitions that are in use, in particular the concept of gross general government debt used in the surveillance of the euro area countries, the total liabilities from the government balance sheet approach, and the net debt concept which subtracts government fi nancial assets from the liability side. In addition, it discusses “hidden debt” in the form of implicit and contingent liabilities. In terms of composition, the paper provides information about euro area government debt broken down by maturity, holder or the currency of issue. All these indicators illustrate a sharp increase in government debt in most euro area countries as a result of the crisis. This in turn has several policy implications: (i) the growing government debt ratios need to be stabilised and put on a downward path which improves market confidence; (ii) fiscal surveillance needs to put more emphasis on government debt indicators than in the past; (iii) government financial assets could play a role when analysing solvency issues; (iv) implicit and other off-balance-sheet government liabilities need to be carefully monitored and reported; (v) the gross debt concept should remain the key basis for fiscal surveillance in the EU and for the Excessive Deficit Procedure in particular; (vi) beyond the size of government debt its composition is also a key factor behind public finance vulnerabilities. JEL Classification: E31, E58, F41, P24
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Central Bank in its series Occasional Paper Series with number 132.
Date of creation: Oct 2011
Date of revision:
Contact details of provider:
Postal: Postfach 16 03 19, Frankfurt am Main, Germany
Phone: +49 69 1344 0
Fax: +49 69 1344 6000
Web page: http://www.ecb.europa.eu/home/html/index.en.html
More information through EDIRC
Postal: Press and Information Division, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-22 (All new papers)
- NEP-CBA-2011-10-22 (Central Banking)
- NEP-CIS-2011-10-22 (Confederation of Independent States)
- NEP-MAC-2011-10-22 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenji Moriyama & Gian-Maria Milesi-Ferretti, 2004. "Fiscal Adjustment in Eu Countries," IMF Working Papers, International Monetary Fund 04/143, International Monetary Fund.
- Guido Wolswijk & Jakob de Haan, 2005. "Government debt management in the euro area - recent theoretical developments and changes in practices," Occasional Paper Series, European Central Bank 25, European Central Bank.
- Mathias Trabandt & Harald Uhlig, 2006.
"How Far Are We From The Slippery Slope? The Laffer Curve Revisited,"
SFB 649 Discussion Papers, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany
SFB649DP2006-023, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Harald Uhlig & Mathias Trabandt, 2009. "How Far are We from the Slippery Slope? The Laffer Curve Revisited," Working Papers, Becker Friedman Institute for Research In Economics 2009-005, Becker Friedman Institute for Research In Economics.
- Mathias Trabandt & Harald Uhlig, 2009. "How Far Are We From The Slippery Slope? The Laffer Curve Revisited," NBER Working Papers 15343, National Bureau of Economic Research, Inc.
- Trabandt, Mathias & Uhlig, Harald, 2006. "How Far Are We From the Slippery Slope? The Laffer Curve Revisited," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5657, C.E.P.R. Discussion Papers.
- Trabandt, Mathias & Uhlig, Harald, 2010. "How far are we from the slippery slope? The Laffer curve revisited," Working Paper Series, European Central Bank 1174, European Central Bank.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2008.
"The Forgotten History of Domestic Debt,"
NBER Working Papers
13946, National Bureau of Economic Research, Inc.
- Schuknecht, Ludger & von Hagen, Jürgen & Wolswijk, Guido, 2010.
"Government bond risk premiums in the EU revisited: the impact of the financial crisis,"
Working Paper Series, European Central Bank
1152, European Central Bank.
- von Hagen, Jürgen & Schuknecht, Ludger & Wolswijk, Guido, 2011. "Government bond risk premiums in the EU revisited: The impact of the financial crisis," European Journal of Political Economy, Elsevier, Elsevier, vol. 27(1), pages 36-43, March.
- Schuknecht, Ludger & von Hagen, Jürgen & Wolswijk, Guido, 2009. "Government Bond Risk Premiums in the EU revisited: The Impact of the Financial Crisis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7499, C.E.P.R. Discussion Papers.
- Carmen M. Reinhart, 2010. "This Time is Different Chartbook: Country Histories on Debt, Default, and Financial Crises," NBER Working Papers 15815, National Bureau of Economic Research, Inc.
- International Monetary Fund, 2010. "Some Uncomfortable Arithmetic Regarding Europeâ€™s Public Finances," IMF Working Papers, International Monetary Fund 10/177, International Monetary Fund.
- Christophe Van Nieuwenhuyze, 2013. "Debt, assets and imbalances in the euro area. An aggregate view," Revue de l'OFCE, Presses de Sciences-Po, Presses de Sciences-Po, vol. 0(1), pages 123-152.
- Federico Revelli, 2012.
"Business taxation and economic performance in hierarchical government structures,"
Working Papers, Institut d'Economia de Barcelona (IEB)
2012/12, Institut d'Economia de Barcelona (IEB).
- Revelli Federico, 2012. "Business taxation and economic performance in hierarchical government structures," Department of Economics and Statistics Cognetti de Martiis. Working Papers, University of Turin 201204, University of Turin.
- Aysan, Ahmet Faruk & Ermişoğlu, Ergun, 2013. "Eurozone Debt Crisis and its Effects on Turkish Economy," MPRA Paper 50501, University Library of Munich, Germany.
- Niklas Potrafke & Markus Reischmann, 2014. "Explosive Target balances of the German Bundesbank," Ifo Working Paper Series, Ifo Institute for Economic Research at the University of Munich Ifo Working Paper No. 185, Ifo Institute for Economic Research at the University of Munich.
- Niklas Potrafke & Markus Reischmann, 2013. "Explosive Target Balances," CESifo Working Paper Series, CESifo Group Munich 4297, CESifo Group Munich.
- Faruk Balli & Syed Abul Basher & Hatice Ozer Balli, 2013.
"International Income Risk-Sharing and the Global Financial Crisis of 2008- 2009,"
CAMA Working Papers, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University
2013-02, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Balli, Faruk & Basher, Syed Abul & Balli, Hatice Ozer, 2013. "International income risk-sharing and the global financial crisis of 2008–2009," Journal of Banking & Finance, Elsevier, Elsevier, vol. 37(7), pages 2303-2313.
- Balli, Faruk & Basher, Syed Abul & Balli, Hatice Ozer, 2013. "International Income Risk-Sharing and the Global Financial Crisis of 2008--2009," MPRA Paper 43720, University Library of Munich, Germany.
- David Lodge & Marta Rodriguez-Vives, 2013. "How long can austerity persist? The factors that sustain fiscal consolidations," European Journal of Government and Economics, Europa Grande, Europa Grande, vol. 2(1), pages 5-24, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Official Publications).
If references are entirely missing, you can add them using this form.