European economies face an unprecedented strain on their public finances. The average stock of public sector debt has risen from 43% of GDP in 2007 to a peak of 77% in 2020 across the EU member states and the UK.

This rise in borrowing has been driven by public sector spending following a succession of large and unexpected economic shocks.

In its latest report, our macroeconomics team looks at the long-term fiscal challenges in Europe and provides an analysis of:

  • government spending pressures
  • sources of government revenue
  • the rising cost of public sector debt
  • the outlook for fiscal reforms