EU New Debt Levels Slightly Decrease - Austria Above Average

According to the latest data from Eurostat, the average new debt levels among EU member states fell in 2024 compared to the previous year. The average new debt incurred by EU countries was reported at 3.2% of Gross Domestic Product (GDP), which represents a decrease of 0.3 percentage points from 2023. However, this figure still exceeds the maximum threshold of 3% set by the European Union.

The total debt level across the EU reached an average of 81% of GDP, with Austria reporting a slightly higher level at 81.8%. The EU's regulations stipulate that total debt should not exceed 60% of GDP. Notably, Romania had the highest new debt ratio at 9.3% of GDP, followed by Poland at 6.6% and France at 5.8%. Austria's budget deficit was recorded at 4.7% of GDP.

In 2024, twelve EU nations incurred new debt levels of at least 3% of GDP. In contrast, Germany managed to stay below the allowable limit, reporting a new debt figure of 2.8%. As part of ongoing fiscal oversight, the EU initiated a deficit procedure against France earlier in June due to its non-compliance with debt regulations. France's new debt level stood at 5.5% of GDP in 2023. Furthermore, the EU Commission has also launched deficit procedures against Belgium, Italy, Hungary, Malta, Poland, and Slovakia.

In response to these challenges, EU finance ministers have urged the affected countries to bring their new debt levels back below the 3% threshold, recommending various timelines for compliance. The French government has committed to achieving this goal by 2029.

Last year, the EU reformed its debt regulations, maintaining the Maastricht criteria while allowing nations with high debt levels, such as France and Italy, more time to reduce their deficits. The ongoing economic impacts of the COVID-19 pandemic and the Ukraine conflict have significantly contributed to rising debt levels in many member states.

Currently, discussions are underway within the EU regarding potential adjustments to debt rules, particularly concerning defense spending in light of planned military rearmament efforts.