How do economic governance reforms and austerity measures affect inclusive growth
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(Figures 3 and 4). On average, the gross public debt to GDP ratio in the EU27 rose from 59 per cent in 2007 (66 per cent in the Euro area) to 80 per cent in 2010 (85 per cent in the Euro area), while it is expected to rise further to 83 per cent by 2012 (89 per cent in the Euro area).4 Several EU member states saw their public debt to GDP ratios rise to levels that wiped out the fiscal consolidation of the past 25 years or more. Most notably, the debt to GDP ratio of the Irish government rose by 71 percentage points from 25 to 96 per cent between 2007 and 2010 and it is expected to reach 118 per cent of Irish GDP in 2012. Greece, Latvia and the United Kingdom saw rises in their gross debt to GDP ratios of 36–37 percentage points, with the Greek ratio climbing from 105 to 143 per cent between 2007 and 2010 and expected to go up further to 166 per cent of GDP by 2012. In the United Kingdom, the ratio increased from 44 to 80 per cent during the same period and is forecast to reach 88 per cent by 2012. Portugal, Spain and Lithuania also suffered debt to GDP increases of 21 to 25 percentage points between 2007 and 2010, although it is only the Portuguese ratio that has exceeded 100 per cent of GDP, with those of Spain and Lithuania being well below the EU/Euro area averages. Figure 3 Gross public debt to GDP ratio, EU, 2007, 2010–2012 180
2007
2010
2011
2012
160 140 120 100 80 60 40 20 EL IT BE IE PT EA DE FR EU 27 HU UK AT MT NL CY ES PL FI LV DK SK SE CZ LT SI RO LU BG EE
0
Source: AMECO data.
4. All figures and forecasts from the AMECO database.
A triumph of failed ideas – European models of capitalism in the crisis
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