Eurozone debt rising despite austerity

23rd Jul 2013

Government debt across the eurozone hit an all-time high in the first quarter of 2013 in spite of massive spending cuts. Recent figures show the situation to be worsening in countries that are already deep in the red.

The total amount of eurozone sovereign debt seen against gross domestic product (GDP) rose to 92.2 percent in the first quarter of 2013, compared with 90.6 percent in the first three months of last year, the European Union Statistics Office announced on Monday.

The figure represented an increase by 4 percent, Eurostat reported, as massive spending cuts in debt-laden member states were more than offset by falling GDP in those countries.

This dynamic was strikingly apparent in Greece were the debt-to-GDP ratio rose to 160 percent, significantly higher than the 136 percent recorded in the first quarter of 2012, and coming despite a series of sweeping government austerity measures.

Other countries affected by steeply rising sovereign debt were Ireland, Belgium and Spain, while national debt levels remained disproportionatey high in Portugal and Italy, with 127 percent and 130 percent respectively, Eurostat data showed.

By contrast, Germany’s sovereign debt fell to 81.2 percent between January and March, from 81.9 percent in 2012, putting the country among the top three members performing best in debt reduction alongside Denmark and Latvia.

Germany is still one of the 14 countries that overshot the European Union’s recommended debt level of 60 percent of GDP.

Within the wider 28-nation European Union, debt reached an average of 85.9 percent by the end of March, up from 85.2 percent in the previous quarter, Eurostat anounced.

uhe/mkg (dpa, AP)

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