The name is absent

Japan as background references. A debt accounting exercise is also performed, which
provides an illustrative first contact with fiscal data.

Fiscal Developments

While in 1977 debt levels measured in terms of GDP were close to or well below the 60%
Maastricht reference value, 15 years later, in the aftermath of the adoption of the
Maastricht Treaty, seven European countries, as well as the US and Japan, were recording
debt levels above such a reference value (Table 2.1). In three of them (Belgium, Greece
and Italy), government gross debt had jumped above 100% of GDP, while in Ireland the
figure was higher than 90% of GDP. In the rest of the countries debt had also increased,
and it was approaching the 60% ratio in the cases of Spain and Portugal. Until the first
half of the nineties, just after the formal launching of the euro, the upward trend
continued in most of the countries in the sample. Only Ireland, Finland and, to a lesser
extent, Belgium and the Netherlands had managed to curve rising debt levels. As a result,
all the countries in the sample, except the UK, were recording debt levels close to or well
above the 60% reference value by the middle of the past decade.

Table 2.1 Gross Debt Developments, 1977-2005 (% of GDP)

Note: * Average of the annual changes in percent of GDP over the period, including the extremes of the
interval.

Source: European Commission for EU15 and OECD for US and Japan.

The mid-1990s marked a turning point in debt developments in most EU countries, as
well as in the US. Only in Germany, Greece and France were the debt ratios still on an
increasing path. Between 1996 and 1999, the debt had decreased by around 8 percentage
points of GDP per year in Ireland, by 4½ in Belgium and by between 3 and 4 points in the
Netherlands, Portugal, Finland, Denmark and Sweden. Debt reduction was also sizeable
in Spain, Italy and the UK. Similar debt-decreasing trends seem to be still in motion in
the current decade, albeit at a slower pace. However, debt has continued to increase in
Germany and France, while the downward trends have been reversed in Portugal and the
US. In Japan, debt levels have not ceased to increase, especially since the early nineties
on the back of a strong expansionary fiscal policy.

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