In the latest Fiscal Sustainability Report, Brussels, which is expecting the European Union as a whole to reduce their public debt from 81 percent to 72 percent of GDP within the next decade, has warned how this could be unsustainable in the medium term for seven countries. The new report highlights the high risk of chronic debt particularly in Belgium, Spain, France, Italy, Hungary, Portugal and the UK. It analyses the fiscal viability of the EU member states in the short, medium and long term.
The report maintains that while Cyprus’ economic crash in 2018 is still a concern, there are ongoing problems in four other countries: Spain, France, Italy and Hungary.
The Commission warns “high or rising levels” of debt of these countries are "important sources of vulnerability”.
In the case Spain, the Commission is forecasting a deterioration in its economy in the short-term over the next two years, with a deficit of one percent of GDP.
This has sent alarm bells ringing through Brussels around the prospects of the bloc’s sixth biggest economy, valued at £1.1trillion.
EU news: The European Commission fears Spain's debt could surge to 107percent of GDP in 2029 (Image: GETTY)
Brussels is estimating without major changes in fiscal policy, Spanish debt could rise to 107 percent of GDP in 2029 because of the costs from an ageing population and interest rates above the rate of increase.
The context outlined by Brussels follows an annual GDP expansion of 1.2 percent and inflation of 1.9 percent over the next 10
