The EU/EA government deficit ratio is estimated to have significantly increased last year (by around 8 pps.) to around 9% of GDP. This deterioration reflects the operation of automatic stabilisers and the sizeable discretionary fiscal measures put in place to cushion households and firms from the negative impact of the COVID-19 pandemic. The deficit ratio is set to ease in 2021 and 2022 (to around 5% of GDP), reflecting the unwinding of pandemic-related emergency measures, as well as the expected rebound in economic activity. […]