While some countries maintain sound budgetary positions, a significant proportion of the euro area countries are expected to have deficits near or above 3% of GDP. A majority of these countries are likely to miss the original budgetary targets set in their stability programmes. Euro area public debt is projected to increase further.
With a few exceptions, public debt will remain largely unchanged or increase in countries with larger fiscal imbalances. Although the period of significant further increases in public deficits seems to be coming to an end, important challenges for the consolidation of public finances are to be faced.