Eurozone debt burden stuck amid low growth

Published on NewsOK Modified: January 23, 2013 at 12:24 pm •  Published: January 23, 2013
Advertisement
;

"Compared to the U.S. or Japan, Europe's average debt level looks excellent," Weil said. "But the eurozone is not one entity guaranteeing all of its member states' debt. The problem is the unequal distribution, with some countries like Greece or Portugal having an unsustainably high debt burden," he added.

The highest increases of the quarterly debt level were indeed recorded in the countries worst-hit by the crisis: Ireland's rose by 5.9 percentage points to 117 percent, in Portugal it was up by 3 percentage points to 120 percent. Greece, which is in sixth year of a severe recession, recorded an increase of 3.4 percentage points to 153 percent, the eurozone's highest debt ratio.

"Once growth returns the eurozone's debt ratio will decrease, although we don't expect that to happen before 2015-2016," Kater said.

Echoing the trend of stabilization in Europe's debt levels, rating agency Fitch revised its outlook on Belgium from negative to stable Wednesday, citing the government's success in trimming its budget deficit as planned.

Belgium's public debt level has now peaked at about 100 percent and will start dwindling to 79 percent by 2021, the agency added.

Germany has been the main reason why the eurozone as a whole has not fallen into recession — technically defined as two quarters of negative growth in a row — but Europe's biggest economy is showing signs of slowing down as the debt crisis takes its toll on the country's exports.

Its economy shrank slightly in the final quarter of 2012 and the government this month lowered this year's growth forecast to a meager 0.4 percent.

____

Geir Moulson contributed to this story.

___

Juergen Baetz can be reached on Twitter at http://www.twitter.com/jbaetz

| |

Advertisement


Trending Now



AROUND THE WEB

  1. 1
    Camille Paglia: The Drinking Age Is Past Its Prime
  2. 2
    Video: Weatherman cannot stop laughing
  3. 3
    Laura Prepon Addresses Those Tom Cruise Dating Rumors
  4. 4
    Woman's cancer scam bilked donors, police say
  5. 5
    Phoenix Suns guard Goran Dragic named NBA's Most Improved Player
+ show more