May 6, 2010
This story about the EU sovereign debt problem was published by EurActiv on 6th May 2010.
As eurozone leaders prepare to meet in Brussels tomorrow (7 May) to back a bailout mechanism for debt-laden Greece, the European Commission is considering new policy measures to prevent public debt from exceeding acceptable limits.
According to the Commission, the EU’s debt-to-GDP ratio has seen “its biggest one-year increase ever seen in peacetime,” jumping from 61.5% in 2008 to 72.6% in 2009.
The ratio is projected to reach 83.7% in 2011 (88.2% in the euro area).
In the wake of the global financial crisis and the ongoing Greek debt tragedy, the European Commission and some member states are now trying to use the crisis to pass new, stricter policy measures.
“The time to be bold is now,” said a Commission official.
“A debate on debt would have been taboo just one year ago. Now, we perceive a general backing which in three months could be gone again,” he added.
On the explicit invitation of Germany and France (see ‘Positions’), EU Economy Commissioner Olli Rehn said yesterday (5 May) that Europe needs to put “more attention on debt rather than only on deficit,” presenting the Commission’s quarterly European economic forecast in Brussels.
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