The euro area government debt ratio is projected to rise further to above 95% of GDP in 2013 – far above the 60% Maastricht reference value – with debt ratios displaying large differences across countries. Further adjustment is thus inevitable, and unfortunately it must take place in an environment of rising consolidation fatigue.
Five years into the crisis this rise in consolidation fatigue is understandable. Going forward, it will be important for policymakers to communicate effectively both on the need for further adjustment and how this adjustment will be distributed in an equitable way across different groups of the population.