The countries of the European Union are slowly but steadily getting out of high debt. In the second quarter of this year, it was at the level of 83.1 percent of GDP, while last year it was 85.9 percent. However, the situation is different in the Czech Republic, where debt, on the contrary, continues to increase and reached 44.3 percent of GDP at the end of the second quarter. A year ago, it was 43.5 percent.
Greece still has the highest debt in the EU, where it was 166.5 percent of GDP, followed by Italy with a value of 142.4 percent and France, where the debt reached 111.9 percent. Debt in relation to the performance of the economy is above 100 percent in a total of six EU countries. Conversely, Estonia had the lowest debt at the end of the second quarter with a value of 18.5 percent, followed by Bulgaria and then Luxembourg.
At the end of the second quarter, the national debt for the entire EU in absolute numbers increased to over 13.67 trillion euros (more than 337 trillion CZK), while a year ago it exceeded 13.15 trillion euros. In the Czech Republic, the state debt rose above 3.15 trillion crowns and was a record. A year earlier, it exceeded 2.79 trillion crowns.
EU indebtedness also decreased against the end of the first quarter, when it amounted to 83.4 percent of GDP. In the Czech Republic, debt at the end of March was 44.5 percent. As for the eurozone alone, its indebtedness decreased to 90.3 percent in the second quarter from 90.7 percent at the end of the first quarter and 93.5 percent a year ago.
The deficit of EU public finances as a whole reached 3.2 percent of GDP in the second quarter according to seasonally adjusted data, and thus increased against the deficit of 2.3 percent of GDP in the same period last year, he announced Eurostat. In the Czech Republic, the deficit rose to 3.3 percent of GDP from 2.9 percent a year ago.
In the modern history of the Czech Republic, i.e. since 1993, the lowest state debt was between 1996 and 1998, when it was nine percent of GDP. Václav Klaus was the prime minister at the time. From 1999 to 2013, indebtedness steadily increased, from ten percent to 41 percent of GDP. At that time, the heads of government were initially Prime Ministers for the ČSSD Miloš Zeman, Vladimír Špidla, Stanislav Gross and Jiří Paroubek, later Prime Ministers for the ODS Mirek Topolánek and Petr Nečas and two non-party members Jan Fischer and Jiří Rusnok. From then until the pandemic, debt fell, falling to 29 percent of GDP in 2019. In those years, the ministers of finance were Andrej Babiš and then Alena Schillerová, both from the ANO movement.
The European Union’s fiscal rules, known as the Stability and Growth Pact, require that public debt not exceed 60 percent of GDP and budget deficits three percent of GDP. However, Brussels suspended the validity of the pact in 2020 due to the economic effects of the covid-19 pandemic. He then extended his extraordinary release, mainly due to the energy crisis partly caused by the war in Ukraine.