Quotation Gächter, Martin, Geiger, Martin, Glötzl, Florentin, Schuberth, Helene. 2015. Sectoral Deleveraging in Europe and its Economic Implications. Focus on European Economic Integration Q1/15 8-23.




We examine net lending/net borrowing and the underlying debt dynamics at the sectoral level in the European Union. Saving and investment patterns indicate that there have been considerable deleveraging efforts since the start of the global financial crisis, particularly in the nonfinancial corporate and household sectors. In many EU countries, however, this decline in credit transactions has not yet led to a significant reduction of sectoral debt-to-GDP ratios. Subdued output growth and low or even negative inflation rates have undermined the deleveraging process and increased real debt burdens in a number of European economies. Since these are often the countries that had experienced strong credit booms prior to the crisis, rebalancing needs are likely to persist and may be a significant drag on the recovery in the near future. Furthermore, most of the ongoing rebalancing, both in terms of debt levels and current account deficits, is based on a sharp decline in investment rather than an increase in saving, which might lead to lower potential growth in the future. Recent developments may even jeopardize the catching-up process of peripheral euro area countries and non euro area EU Member States in Central, Eastern and Southeastern Europe.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Focus on European Economic Integration
Language English
Title Sectoral Deleveraging in Europe and its Economic Implications
Volume Q1/15
Year 2015
Page from 8
Page to 23
Reviewed? Y
URL http://bit.ly/1Hg1k5O


Gächter, Martin (Former researcher)
Glötzl, Florentin (Former researcher)
Geiger, Martin (Universität Innsbruck, Austria)
Schuberth, Helene (Oesterreichische Nationalbank, Austria)
Institute for Ecological Economics IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5300 Economics (Details)
5334 Political economic policy (Details)
5341 Economic policy (Details)
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