Government debt to GDP up to 100.5% in euro area and 92.9% in EU

July 22, 2021

The government debt to GDP for the first quarter of 2021 in the euro area was £11,430.87 billion, which is 100.5% of GDP. In comparison to the fourth quarter, debt amounted to £11,107.13 billion, 97.8% of GDP, relative to the first quarter of 2020 debt amounted to £10,258.87, 86.1% of GDP. It was noted that the first quarter was impacted by policy responses to the COVID-19 containment measures, which resulted in a rise in financing needs. According to a report published by Eurostat, the statistical office of the European Union, the rise of Government debt in the euro area exceeded 100% for the first time. It was also reported that “In the EU, the ratio increased from 90.5% to 92.9%. Compared with the first quarter of 2020, the government debt to GDP ratio rose in both the euro area (from 86.1% to 100.5%) and the EU (from 79.2% to 92.9%).”

In addition, debt securities accounted for 82.6% of the euro area and for 82.2% of EU general government debt at the end of the first quarter of 2021. Whereas loans constituted 14.2% and 14.7% in the euro and EU, respectively. Currency and deposits consisted of 3.2% of the euro area and 3.1% of the EU government debt. It was noted, “Due to the involvement of EU Member States’ governments in financial assistance to the certain Member States, quarterly data on intergovernmental lending (IGL) is also published. The share of IGL as a percentage of GDP at the end of the first quarter of 2021 accounted for 2.0% in the euro area and to 1.7% in the EU.”

Government debt at the end of the first quarter 2021 by Member State

Notably, at the end of the first quarter of 2021, the highest ratios of government debt to GDP were observed in Greece (209.3%), Italy (160.0%), Portugal (137.2%), Cyprus (125.7%), Spain (125.2%), Belgium (118.6%) and France (118.0%), and the lowest in Estonia (18.5%), Bulgaria (25.1%) and Luxembourg (28.1%).

In comparison to the fourth quarter of 2020, twenty-three Member States experienced a rise in their debt to GDP ratio at the end of the first quarter of 2021 and two registered a decrease, while two remain stable. Notably, “the largest increases in the ratio were observed in Cyprus (+6.5 percentage points – pp), Czechia (+6.3 pp), Spain (+5.3 pp), Slovenia (+5.2 pp), Belgium (+4.4 pp), Malta and Italy (both +4.2 pp). The decreases were recorded in Lithuania (-1.5 pp), and Denmark (-1.4 pp).” according to Eurostat.

All Member States reported growth in their debt to GDP ratio at the end of the first quarter of 2021 in comparison to the first quarter of 2020. The largest increases in the ratio were recorded in Cyprus (+29.5 pp), Greece (+28.6 pp), Spain (+26.2 pp), Italy (+22.1 pp), and Portugal (+18.0 pp), while the lowest increases were observed in Ireland (+1.7 pp), Sweden (+4.5 pp), Bulgaria (+5.0 pp), the Netherlands (+5.6 pp), Finland (+5.9 pp) and Luxembourg (+6.0 pp).


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