More on the Stability Pact: the debt
A short while ago, we discussed the potential effects of the Stability Pact on Eurozone productivity, its procyclical nature, and its tendency to stifle investment. The data are merciless.
But has the Pact at least helped us get into less debt? And which countries have performed best?
Even in this regard, as you know, the Pact's performance leaves much to be desired. If we assume the debt in 1995 is 100, over the last 30 years things have gone like this:
It goes without saying that it makes little sense to examine the dynamics of countries with very different historical trajectories and still very different sizes in the same graph. Estonia's debt explosion, for example, isn't particularly concerning, given the country's tiny size compared to the Eurozone as a whole and the particularly low starting point of its public debt (which has reached just over 23% of GDP). It makes more sense to compare the contributions of individual countries to the growth of total debt, perhaps from 1998 (i.e., the year after the signing of the Stability Pact) to today. The result is this:
And it doesn't hold any major surprises. Small countries made a small contribution to the total growth, which was around 200% (i.e., debt tripled in absolute terms), and among the large countries, the one that contributed most to overall growth was France, whose increase explained 27% of the total increase (just over a quarter). Italy, which also inherited a much more worrying situation, explained only 19%, which is certainly not insignificant (just under a fifth), but is not far behind Germany's 17% (just over a sixth).
We've already discussed this here and here , so this isn't news to you. I'll add, for the benefit of the prudes, that I know full well that the problem isn't public debt, but private foreign debt. On the other hand, if you know this, it's because I taught you in 2011 (or after 2011, someone taught you from me): so, if you remember, why should I, who taught you, have forgotten?
Well.
And now, since you're so interested in politics: what do you think are the political implications of this cold statistic?
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2026/04/ancora-sul-patto-di-stabilita-il-debito.html on Tue, 28 Apr 2026 13:08:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.