Greece was simply the first, in what will become a long, long list of Euro area nations having to face austerity, haircuts, and bank closures. The European Union is a collection of debt ridden, basket case nations that neither Germany, nor the United States, will be able to fix.
Expect more “kicking of the can”, as no politician wants to be in the hot seat when the entire corrupt and painful EU bubble bursts.
With all the talk of Greek debt unsustainability (and now, thanks to Jack Lew and the IMF, forgiveness), one would think that Greece – whose debt/GDP is set to rise to 238% according to Citi – is the only country in Europe which has debt problems. It’s not, and as the latest data from Eurostat confirms, as of Q1 2015, European debt rose to €9.4 trillion from €9.3 trillion, which is a new record high debt/GDP of 92.9%, up from 92.0% the previous quarter.
It wasn’t just the Euroarea of 19 EUR member nations that saw their debt increase: the broader European Union of 28 countries also saw its debt rise, and by a far more noticeable €300 billion, from €12.1 trillion to €12.4 trillion.
As Eurostat reports, “The highest ratios of government debt to GDP at the end of the first quarter of 2015 were recorded in Greece (168.8%), Italy (135.1%) and Portugal (129.6%), and the lowest in Estonia (10.5%), Luxembourg (21.6%) and Bulgaria (29.6%).”
Besides the averages, debt/GDP increases were recorded in 15 European countries; debt declined in 12 countries most notably in Greece where it declined by just over 8%. Courtesy of the Third Greek bailout we no know this won’t last.
Finally, in addition to Greece, at least 4 other countries have debt/GDP of over 100%, with Spain and France on the verge of entering the triple digit club. Of course, none of these number include total government pension benefit and retirement liabilities. Adding those would push the ratios higher by another 200-300%.