Europe's debt hits 82% of GDP despite spending cuts
Financial Burden may weigh heavily on economy for decades
Brussels: The European Union's total government debt rose slightly to 82.2 per cent of economic output in the third quarter of 2011, the EU's statistics agency said yesterday, lower than the United States but still a burden that could take decades to pay down.
For the Eurozone, government debt fell slightly to 87.4 per cent of gross domestic product, compared with the 87.7 per cent level at the end of the second quarter of last year.
The 27-nation's EU's debt stood at 81.7 per cent in the second quarter, Eurostat said in the first release of such data, as the bloc steps up the monitoring of its debts and tries to prevent any recurrence of the two-year sovereign debt crisis.
In comparison, US debt-to-GDP hit 100 per cent in 2011 and under its current trajectory would exceed 115 per cent of GDP by 2016, according to International Monetary Fund figures.
Europe's debts soared after the introduction of the euro in 1999 as countries indulged in massive borrowing at very low rates of interest.
Difficult till 2030
But with economic growth stalling, the EU faces very slow progress in lowering the debt burden, even as it cuts spending across the bloc to bring down its fiscal deficits.
The World Bank said last month that Europe's debts may not reach manageable levels until 2030.
That could potentially erode Europe's leadership in the world, while less-indebted emerging countries expand their economies and their influence.
Only 13 EU members had debts below the 60 per cent limit set by the European Commission and that the bloc judges to be the maximum for a healthy economy, although indebtedness varied widely.
Just four of those were members of the 17-nation single currency area.
Tiny Estonia had a debt-to-GDP ratio of 6 per cent in the third quarter, compared with 159.1 per cent in Greece.
France and Britain both had a level of 85.2 per cent and even Germany, the bloc's biggest economy that is driving EU austerity efforts, was at 81.8 per cent in the July to September period.
Eurozone: debt levels in 17 nations
The EU's statistics office estimates that the debt level across the 17-nation Eurozone fell to 87.4 per cent of gross domestic product at the end of the third quarter of 2011 from 87.7 per cent at the end of the previous quarter.
- Greece 159.1 per cent, up from 154.7 per cent.
- Italy 119.6 per cent, down from 121.2 per cent.
- Portugal 110.1 per cent, up from 106.5 per cent.
- Ireland 104.9 per cent, up from 102.3 per cent.
- Belgium 98.5 per cent, up from 98.0 per cent.
- France 85.2 per cent, down from 86.0 per cent.
- Germany 81.8 per cent, down from 82.0 per cent.
- Austria 71.6 per cent, down from 72.2 per cent.
- Malta 70.3 per cent, down from 71.9 per cent.
- Cyprus 67.5 per cent, unchanged.
- Spain 66.0 per cent, unchanged.
- THE Netherlands 64.5 per cent, up from 63.8 per cent.
- Finland 47.2 per cent, up from 45.6 per cent.
- Slovenia 44.4 per cent, down from 44.5 per cent.
- Slovakia 42.2 per cent, down from 42.7 per cent.
- Luxembourg 18.5 per cent, down from 18.8 per cent.
- Estonia 6.1 per cent, down from 6.3 per cent.
— With inputs from AFP
