The short-term measures decided at the Eurogroup meeting of the 5th of December last year are a positive step and are expected to reduce public debt as a ratio of GDP by 20 percentage points by 2060. At the same time they also reduce the annual gross financing needs of the general government by around 5 percentage points of GDP.
However, to ensure the sustainability of the debt going forward, additional medium-term measures are also necessary. When the debt-to-GDP ratio is above 100%, measures that reduce interest payments on debt can improve the ratio quicker than a rise in the primary balance.