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Figure of the Month

Interest rate regimes in selected eurozone countries

Notes: The figure shows r - g, where r stands for the interest rate and g for the growth rate of GDP; Ireland was excluded for 2015 – this was the year Ireland had a GDP growth rate exceeding 30% resulting from special accounting procedures.

Source: European Commission: AMECO database.

This figure from Paul De Grauwe and Yuemei Ji’s forum article "Time to Change Budgetary Priorities in the Eurozone" from our current issue shows the evolution of r - g since 2013 (the first year after the sovereign debt crisis). It can be seen that r - g declined in all the examined eurozone countries. The effect of this decline is that, with the exception of Greece and Italy, all analysed eurozone countries now profit from a favourable interest rate regime in which r - g < 0.