Eurogroup Concerned About Slow Public Debt Reduction in Some Eurozone Countries

BRUSSELS (Sputnik) - The Eurogroup — an informal body comprising finance ministers of the eurozone — expressed its concern on 4 December over the slow reduction of public debt in certain members of the euro area, issuing a statement regarding the countries' submitted draft budgets for 2019.

'The Eurogroup reiterates that a slow pace of debt reduction from high levels in a number of Member States remains a matter for concern and should be decisively addressed… The Eurogroup recalls in this context that the focus on sufficient debt reduction and the adjustment towards the MTO [Medium-Term Budgetary Objectives] are an integral part of the Stability and Growth Pact (SGP)', the group said in a press release.

However, the European ministers also noted that for the first time ever all members of the eurozone are expected to have their budget deficit below 3 percent of GDP in 2019.

The Eurogroup brings together the finance ministers of the European Union members that have adopted euro as their national currency along with the body's president, the vice president of the European Commission charged with economic and monetary policy and the president of the European Central Bank (ECB). During their regular, usually monthly, and informal meetings, the ministers address some of the key economic and financial issues concerning the eurozone.

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Meanwhile, the EU financial and fiscal rules — the Stability and Growth Pact — stipulate that the members' budget deficit must not exceed 3 percent of GDP and that the country must also have a public debt that is below 60 percent of its GDP. The member states who fail to comply with these rules must take measures to reduce the deficit.

The 2019 Draft Budgetary Plans (DBPs) demonstrated that as many as 10 eurozone members are planning to have a surplus next year, which is expected to help the euro area lower its debt-to-GDP ratio to 85 percent in 2019 from 87 percent in 2018, according to the European Commission's forecast.