(05 August 2021) To support the economy and health systems during the coronavirus crisis, governments had to increase spending, financing the increase mostly with growing debt. However, buildup in government debt doesn't necessary lead to the deterioration of fiscal stability, at least not in the short term. Eurozone countries, which on average increased government debt by 14% of GDP during 2020, now pay even less to serve higher debts than they did before the pandemic began.

  • In 2020, government debt in eurozone countries increased by an average of 14.1 percentage points, to 98.4% of GDP. In 14 of the 19 eurozone countries, government debt increased by more than 10 percentage points. 
  • Government debt interest expenditures in the eurozone declined from 2.4% in 2019 to 1.5% of GDP in 2020, despite the increase in overall debt. For individual eurozone countries the decrease in interest expenditures ranged from 0.4 to 1.8 percentage points.
  • Paying less total interest despite larger amounts of debt has become possible due to extremely low government bond yields. To keep government bond yields low, the European Central Bank has been purchasing public sector securities since the start of pandemic under the pandemic emergency purchase program and public sector purchase program. Since March 2020, the ECB has already purchased 1.6 trillion euro of government debt.

Coronavirus Data and Insights

Live data and insights on Coronavirus around the world, including detailed statistics for the US, EU, and China — confirmed and recovered cases, deaths, alternative data on economic activities, customer behavior, supply chains, and more.

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