What the SGP tries to do
The Stability and Growth Pact coordinates fiscal policy across EU members so that public finances remain sustainable. It does this by setting common anchors for deficits and debt, while leaving room for national choices on how to get there.
Key ideas at a glance
Although the technical details evolve over time, three ideas show up consistently:
Debt sustainabilitySound budget pathsCommon yardsticks
- Debt path matters: not just today’s level but where it’s heading.
- Deficit discipline: keep annual gaps manageable to avoid compounding risks.
- Comparability: shared metrics (like debt-to-GDP) help compare across countries.
Debt, deficit and debt-to-GDP
The SGP focuses on the distinction between the yearly deficit (flow) and total debt (stock). To compare countries of different size, debt is usually discussed as a share of the economy via the debt-to-GDP ratio.
New to these concepts? Read the primers: What is Debt? · Debt vs Deficit · Debt-to-GDP explained.
Why it matters for citizens
- Interest costs: money spent on interest can’t fund schools or healthcare.
- Stability: common rules aim to lower the risk of fiscal crises.
- Policy space: healthier debt dynamics allow more room to invest and cushion shocks.
FAQ
Is there a single “safe” number for debt?
No. Sustainability depends on growth, interest rates, demographics and credible budget paths.
Do the rules stop investment?
The intent is to support sustainable investment by keeping debt on a stable path, not to block it.
Where can I see up-to-date country figures?
Use the EU live map and click a country for a ticking estimate based on the latest reference dates.