The ability of an economic unit (household, company, government) to service the loans it has taken out (the ability to fulfill the contractual debt service obligations). There are many templates and benchmarks that are used to assess debt sustainability. It is likely, however, that in each individual case both factual circumstances and subjective variables such as, above all, the willingness of repayment must be taken into account and weighted accordingly. – See bail-out, financial distress, insolvency, moral hazard, debt management, debt haircut, government debt, overconsumption, indebtedness, default, insolvency. – Cf. ECB Monthly Bulletin, April 2012, pp. 63 ff. (detailed presentation of debt sustainability with regard to the euro area as a whole and individual members; many overviews; Financial Stability Report 2012, pp. 61 f. (debt sustainability of German households).
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