Currently, gross government debt as a percentage of GDP is at its highest historical level. The graph depicts the situation for each euro zone Member State. With the exception of Belgium and the Netherlands, debt in 2015 is considerably higher than in 1995.
The increase in public debt puts particular pressure on the most indebted countries in term of sovereign solvency (i.e. the future ability to repay debt). A high level of debt makes these countries vulnerable to interest rate increases. A large fraction of GDP must be used for interest debt payments, limiting governments’ scope to implement its political program. As an example, Italy paid €68.40 billion in interest expenses on its outstanding debt in 2015. In comparison, the Italian budget for education in 2015 was €49 billion, for healthcare €113 billion and the European Union budget in 2015 was €145 billion.