Eurozone Debt Reaches Worst Level Since Single Currency Established
THE TAKEAWAY: Eurozone debt reaches worst level ever at 87.2% of GDP -> Governments borrowed more to pay for increased deficits and bailouts -> Euro remains with earlier day losses
Eurozone government debt for 2011 came in at 87.2% of the gross domestic product, for a total of 8.215 trillion Euros, reaching the worst debt level since the start of the Euro. The debt to GDP rate for 2010 was revised lower to 85.3%.
European governments increased borrowing to fill budget deficits and pay for bailouts. Greece showed the worst debt to GDP rate at 165.3%, followed by Italy at 120.1%. Germany had a debt rate of 81.2%, while France showed a rate of 85.8%. The rates were provided by the Eurostat in Luxembourg.
Meanwhile, Euro-area nations cut deficits to 4.1% of GDP in 2011 from the previous year’s 6.2%, but this and the debt figure are both larger than the permissible levels set by the European Union.
EUR/USD surprisingly jumped up following the release of the data, before returning to its original levels. The pair is down for the day after a morning of mostly weaker than expected Purchase Manager Index rates from around Europe. EUR/GBP is still slightly higher since the release of the debt data.
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