Eurozone Debt Rises in 2020, Driven by Pandemic Spending

Data from the European Union’s statistics office Eurostat showed that eurozone debt rose last year as European governments borrowed heavily to keep their economies active during lockdown measures aimed at combating the Coronavirus pandemic, while countries that are already heavily debt-ridden added most of the new debt.

Eurostat said combined government debt in the 19 eurozone countries jumped 1.24 trillion euros to 11.1 trillion, or 98% of their GDP last year from 83.9% in 2019, with a deficit of 3.7% of GDP from 0.6%.

Greece, already struggling with a mountain of debt after its sovereign debt crisis, recorded an increase in its borrowing by 25 percentage points last year, bringing its liabilities to 341 billion euros, or 205.6% of GDP, the highest debt in Europe compared to the size of the economy. .

Italy recorded the second-largest debt to GDP at 155.8%, an increase of 21.2 percentage points compared to 2019, but it was the most heavily indebted country in Europe by absolute standards with a debt of 2.57 trillion euros.

Germany, the largest economy in the euro zone, recorded a rise in its debt by 10 percentage points to 69.8% of GDP, and France, the second largest economy in the region, increased 18 percentage points to 115.7% of GDP.

European Union laws, currently suspended due to the pandemic, require governments to strive for public debt to not exceed 60% of GDP.