Brussels, 02/03/2016 (Agence Europe) - On Tuesday 8 March, the Ecofin Council is expected to advise the member states to take advantage of the current low interest rate environment to reduce the level of public debt, as a priority.
According to draft conclusions on the 2016 report of the European Commission on public finance viability (see EUROPE 11477), the European Finance Ministers stressed that “windfalls from the low interest rate environment should primarily be used to reduce debt ratios”. They go on to explain that healthy public finances can be achieved by reducing public debt, increasing productivity and employment and reforming pensions and healthcare systems.
In its report, the Commission identifies eleven countries (Belgium, Croatia, Spain, Finland, France, Ireland, Italy, Portugal, Romania, the United Kingdom and Slovenia) with a level of public debt which presents a potential medium-term risk. By the end of the third quarter 2015, the highest public debt ratios compared to GDP in the eurozone were to be seen in Greece (171.0%), Italy (134.6%) and in Portugal (130.5%), according to figures from the statistical office of the EU (Eurostat).
In view of the challenge to the viability of public finances presented by the ageing population, the draft conclusions call on the member states to do more, though to varying degrees, to “raise the effective retirement age, necessary contribution period or pension benefits with life expectancy”. (Original version in French by Mathieu Bion)