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Contingent liabilities: past materialisations and present risks

Contingent liabilities: past materialisations and present risks

Fiscal policy support has mitigated financial stability risks during the pandemic, but the vulnerabilities arising from contingent liabilities have increased for euro area sovereigns. National policy responses to support households and firms during the pandemic directly increased the aggregate euro area general government debt-to-GDP level by around 14 percentage points to around 100% of GDP in 2020. […]