Policy Options for Restoring Public Debt Sustainability in EU Member States

In this paper we deal with the possible options to reduce/stabilize one country’s public debt as well as with the specific factors that public authorities must take into account when selecting among different options for setting up a credible and viable public desindebtedness strategy. We also analyze the mix of options reflected in the public desindebtedness strategies adopted by the national governments of overindebted EU countries, during the recent crisis, given the specific context of their membership to the EU/Eurozone. The main conclusion of the paper is that, although several options were available, budgetary consolidation was the central pillar of all desindebtedness strategies adopted by EU countries, ensuring not only the reduction of previously accumulated public debt but also the prerequisites for a more "preventive" behavior of public authorities in the future.