What Happened: The eurozone's average debt-to-GDP ratio fell from 87.1 to 85.1 percent year on year in the last quarter of 2018, according to an April 24 news release from Eurostat. However, the debt-to-GDP ratios in Greece and Italy increased by 5 and 0.8 percentage points, respectively.
Why It Matters: Although the debt-to-GDP ratio remained flat or decreased in almost all countries, it increased in Greece, Italy and Cyprus, which are already facing some of the highest public debt ratios in the eurozone. The European Commission, which will assess Italy's compliance with EU fiscal rules in June, refrained from sanctioning the country in 2018 over its public debt and deficit, but Rome's failure to improve its balance means it might not escape censure this time.
Background: Eurozone states are required to keep their public deficit within 3 percent of their gross domestic product (GDP) and their public debt within 60 percent of their GDP.
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- As Italy's Economy Weakens, the Stakes for the Eurozone Rise (Feb. 6, 2019)