Public debt to spiral in eurozone countries – Commission
Public debt in eurozone countries will continue to rise even as growth returns, the European Commission warned today.
It expects debt to reach 88.7pc of output next year.
Ireland, Greece and Portugal will also have to wait longer to reduce their debt, according to the 220 page document on public finances.
Other countries like Spain, and non-euro Britain, will suffer the same fate as the impact of ageing populations hit countries already saddled with sovereign and bank debt.
"Despite the fact that a return of GDP growth, a gradual withdrawal of the temporary support measures and the start of consolidation is starting to reduce deficits, debt is still expected to continue increasing for the next year or so in most cases," said Marco Buti, the head of EU economy commissioner Olli Rehn's services.
In the report, Mr Buti added that the ratio of debt to gross domestic product for the euro zone was 66.3pc in 2007, and that even once debt had reached its peak, "the issue is not over."
He said that "additional consolidation measures will be required" across the currency area, "not least because population ageing is due to have an increasingly negative effect on the public finances and put pressure on their sustainability in coming decades."