Eurozone countries are more vulnerable due to increased public debt caused by the Covid-19 crisis, a working paper published by the Bank of Spain says.

In Economic consequences of high public debt: evidence from three large-scale DGSE models, Pablo Burriel et al note that the pandemic will greatly increase sovereign debt levels.

They argue that “once the crisis is over and the recovery firmly sets in, keeping debt at high levels over the medium term is a source of vulnerability in itself”. The