Debt, Borrowing and Over-indebtedness: a Country-Level Monitoring Framework

Debt is a double-edged sword: it can lead to economic growth, or crisis and over-indebtedness. The thin line dividing these two outcomes is difficult to define, and measures to detect when precisely the tipping point occurs are imperfect. While debt issues receive much attention at an EU level, supported by rich data sets of various cross-sections, there is less focus at a member country level, and still less on creating active policy arena to address the dangers related to debt over-extension in the economy and consumer overborrowing.

Indebtedness is in fact a complex social and economic phenomenon, which can only partially be understood through hard numbers and indicators. It affects huge numbers of people on a deeply personal level, impacting upon their well-being and ability to contribute to society. This paper explores various aspects of indebtedness as they relate to policy, and advocates for a comprehensive monitoring system of policies and actions for tackling over-indebtedness on a macro-, meso- and country-level.