NationStates Jolt Archive

Im doing revision for A2 politics and have just come across something in my textbook that I dont understand. Its describing the convergence criteria for entry into the Euro and it says for the fourth cirteria

That the country avoided an excessive budget deficit, defined as a ratio of annual net public sector borrowing (the budget deficit) to GDP not exceeding 3% and a ratio of the stock of outstanding public debt to GDP not exceeding 60%

Can anyone explain what the bold section means?

From my own Economics notes on the subject, it describes the fourth criteria as:

1) Budget defecit no larger than 3% of the GDP
2) Accumulated debt should be no more than 60% of the GDP

The second point concerns what you are asking about. I believe that it means that the total debt in the economy (government debt, consumer debt, business debt) totals to no more than 60% of the GDP of the country. I'd double check this with others, though.

I hope that helps. :)

From my own Economics notes on the subject, it describes the fourth criteria as:

1) Budget defecit no larger than 3% of the GDP
2) Accumulated debt should be no more than 60% of the GDP

The second point concerns what you are asking about. I believe that it means that the total debt in the economy (government debt, consumer debt, business debt) totals to no more than 60% of the GDP of the country. I'd double check this with others, though.

I hope that helps. :)

Thanks, that does indeed help