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The Stochastic Simulations of the Commission’s Debt Sustainability Analysis: A Refined Approach

Details

Identification
Discussion Paper 226
Publication date
24 September 2025
Authors
Philipp Mohl | Frédérique Bec | François Courtoy | Frederic Opitz | Directorate-General for Economic and Financial Affairs

Description

This paper presents a revised approach for the Commission’s stochastic debt projections, which are a key element of the medium-term fiscal sustainability framework of the Commission.

Highlights:

  • Stochastic debt projections are essential for reflecting uncertainties in debt dynamics and ensuring robust debt sustainability analyses.
  • This paper introduces a refined technical approach to address two technical challenges in the Commission’s methodology.
  • These refinements enhance the robustness of the Commission's DSA framework, leading to more accurate fiscal risk assessments for EU Member States. 

Information and identifiers

Discussion Paper 226. September 2025. Brussels. PDF 30pp. Tab. Graph. Bibliogr. Free.

KC-01-25-013-EN-N   (online)  
ISBN 978-92-68-23672-7   (online)  
ISSN 2443-8030 (online) 
doi:10.2765/2628965 (online)

JEL classification: H63, E62, C15, C22, C53

Disclaimer

European Economy Discussion Papers are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs, or by experts working in association with them, to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission. 

The Stochastic Simulations of the Commission’s Debt Sustainability Analysis: A Refined Approach

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  • 3 OCTOBER 2025
The Stochastic Simulations of the Commission’s Debt Sustainability Analysis: A Refined Approach