EU debt mountain continues to grow

AFP, Wednesday 24 Oct 2012

Total debt climbed to 90 pct of GDP in the second quarter of 2012, statistics show

European national debt levels have continued to rise way above EU limits, official data showed Wednesday, as the eurozone debt crisis undermines government revenues.

The EU statistics agency Eurostat said total accumulated national debt in the 17 eurozone nations increased to 90 per cent of Gross Domestic Product in the second quarter, up from 88.2 per cent in the first three months of the year.
In the full 27-member EU, debt rose to 84.9 per cent from 83.5 per cent.
The EU sets a 60 per cent cap on total debt and 3.0 percent on annual public deficits but such limits have been under pressure for years in many states and the eurozone debt crisis has only made things worse.
The austerity policies adopted to cope with the crisis have cut government spending but in doing so they have also undercut growth sharply, with tax revenues falling in tandem.
Debt at levels approaching 100 per cent are widely seen as unsustainable for the long term but some countries such as Japan have lived with them much higher than that for years.
The most indebted nations at the end of the second quarter were Greece, with a debt to GDP ratio of 150.3 per cent and Italy 126.1 per cent, followed by bailed-out Portugal and Ireland at 117.5 per cent and 111.5 per cent.
Eurostat said Estonia at 7.3 per cent, Bulgaria 16.5 per cent and Luxembourg at 20.9 per cent had the lowest debt burdens.
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