Debt Day: When the EU27 run out of money

8 December 2023

On 8 December 2023, the European Union (EU) will reach Debt Day, according to a study by the Spanish think tank, Instituto Juan de Mariana. This date signifies when the average EU country will exhaust its tax revenues and will have to turn to public debt to fund its remaining government expenditures.

What long-term impact did the COVID-19 pandemic have on public debt levels? The 2023 edition of the Debt Day report finds that from Q4 2019 to Q1 2023, public debt rose 15 percentage points of the GDP in France (+15 pp) and Spain (+14.6 pp) — the worst-performing countries during this period. Across the EU, the average increase was 6 percentage points of the GDP, although seven nations successfully reduced their government financial obligations.

In 2023, tax revenues covered 93.6 per cent of all government expenditures across the EU. However, it is important to note that, by the end of 2023, three countries (Cyprus, Denmark, and Ireland) will be able to reach a fiscal surplus. Further, four other EU member states (Greece, Sweden, Croatia, and Portugal) will manage to cover more than 97 per cent of their expenses through tax revenues.

Slovakia has emerged as this year’s worst-performing country with its fiscal outlook projected to cover only 318 days of public expenses via tax revenues, relying on additional government debt for the remaining disbursements.

Download PDF Debt Day When the EU27 run out of money

EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).

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