Austria Experiences Further Financial Decline
Catching Up on the European Union's Debt Landscape
Here's a casual take on the European Union's (EU) debt situation in 2024, focusing on a few key players like Austria.
The EU's Mixed Debt Picture
In 2024, the EU countries, on average, took a tad less new debt than they did in the previous year. The average new debt for the EU was 3.2% of their Gross Domestic Product (GDP), according to Eurostat's latest report. However, this figure still rose above the European Union's maximum limit of 3%.
The average total EU debt was a substantial 81% of GDP, as per the data. For Austria, the figure stood a bit higher at 81.8%. It's important to note that the EU rules specify a maximum total debt of 60%.
A Few Debt-Heavy Players
Several EU countries, including some big names, surpassed the 60% debt threshold. Romania had the highest new debt ratio at 9.3% of GDP, followed closely by Poland with 6.6% and France with 5.8%. Austria's deficit for the year was 4.7%. Twelve EU countries faced new debt levels exceeding the 3% maximum. Germany, however, managed to remain below the cap with a 2.8% new debt ratio.
France was already under the EU's deficit scrutiny in 2023 due to debt rule violations. In 2023, France's new debt accounted for 5.5% of its GDP. Besides France, Belgium, Italy, Hungary, Malta, Poland, and Slovakia also faced deficit procedures.
The Future of Debt Rules
The EU finance ministers have urged these countries to chop down their new debt to less than 3% of GDP and have proposed different timelines for this. The French government aims to achieve this goal by 2029.
Last year, the EU decided to revamp the debt rules, keeping the Maastricht criteria intact. Highly-indebted countries like France and Italy might be given more room for debt reduction due to the pandemic and the Ukraine crisis. There's been a recent discussion in the EU to relax the debt rules for defense spending with regards to the planned rebuilding.
To Sum It Up
Many EU countries, including major economies, have debt levels that surpass the 60% threshold, with some reaching even higher ratios. Factors like increased defense spending and economic hardships contribute to these high debt levels.
In Austria's case, the public debt has remained quite substantial, although specific figures for 2025 are not yet available. Stay tuned for more updates on the EU's evolving debt landscape!
[For more insights, check out this nifty guide on public debt in Europe][6]
[5] Eurostat report on government debt[6] European Public Debt Explained - A Comprehensive Guide[4] EU Commission's Macroeconomic Imbalance Procedure report on deficit countries' progress
- Despite the European Union (EU) taking slightly less new debt in 2024 compared to the previous year, the average total EU debt still exceeded the European Union's maximum limit of 60%, with countries like Austria reporting a total debt of 81.8%.
- In light of the EU's proposed debt reduction plan, France aims to bring its new debt ratio below the 3% limit of GDP by 2029, while highly-indebted countries like France and Italy may be granted more flexibility due to the pandemic and the Ukraine crisis.
