The debt-to-GDP ratio decreased significantly in the early years of monetary union and then declined only marginally to just over 100 per cent in 2007, but with the dual financial and sovereign debt crises, it rose sharply, mainly because of low nominal growth and despite the continuing primary surpluses, remaining at around 135 per cent until the outbreak of the pandemic (Figure 12).
In 2020, the collapse of production activity on the one hand, and the support measures for firms and households on the other, increased the ratio by a further 20 percentage points. Half of this increase has been reabsorbed in the last two years, thanks to the extraordinarily favourable differential between nominal growth and the cost of the debt.