Euro zone's debt rises in quarter one: Eurostat

Tuesday 22 July 2014 15.49
Euro zone's debt rises in Q1 2014: Eurostat

Euro zone public debt rose sharply earlier this year, reversing a down trend when the economic crisis eased, official figures revealed. 

The European Union member states are supposed to keep total public debt, which is the accumulated total of government budget deficits and borrowing, below the equivalent of 60% of annual economic output.

Annual budget deficits must not exceed 3.0%.

For years however these limits have been breached and total debt increased sharply during the crisis as governments borrowed even more to bolster their economies.

The result is that total debt in the 18 euro zone countries rose to 93.9% of GDP in the first three months of 2014, up from 92.7% in the fourth quarter 2013.

In the EU, total debt rose to 88% from 87.2%, the Eurostat statistics agency said.

Eurostat gave no explanation for why the figures increased in the first quarter.

Debt had fallen in both the third and fourth quarters of last year as the economy recovered slowly from a deep recession, boosting government revenues as spending was kept under control.

On that basis, some countries such as twice-bailed out Greece and struggling France, have called for an easing in the austerity policies adopted to tame the crisis, but today's figures may give pause for thought in doing so.

Among those with the highest total debt levels were Greece on 174.1% of annual output, Italy 135.6% and Portugal 132.9%, levels which many analysts believe make full repayment an unlikely prospect.

The best performers were Estonia with 10% and Bulgaria, 20.3%.