In this blog, we examine how bad are things in Europe – and how does each country compare?
Government debts are big scary numbers. As a whole, Europe owes €10.1 trillion. It’s more meaningful to look at the number as a percent of gross domestic product, or GDP. Greece, at the top, owes 151.9%, followed by Italy 121.4%. The UK is at at 80.1%.
Big deficits mean more borrowing, and then running it up all over again to cover the costs of that borrowing. The best way to look at these is as a percentage of GDP. Ireland had the worst deficit then at 31.1% followed by Greece at 10.6% and the UK at 10.3%. Compare that to Germany at 4.3% and you can see the relative strengths of the economies.
The way governments borrow money is by selling bonds – the interest rate is key. The higher the rate you have to sell your bonds at, the more you’ll have to pay back. In short, the lower the figure the better.