Europe slips deeper into debt, but eurozone improves

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Europe slips deeper into debt, but eurozone improves

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New figures show the combined debt of the eurozone’s governments fell slightly towards the end of last year.

In the third quarter of 2011, debt was 87.4 percent of the region’s gross domestic product. That compares with the 87.7 percent level at the end of the second quarter of last year.

For the European Union as a whole, total government debt rose slightly to just over 82.2 percent of GDP.

That is lower than the United States but still a burden that could take decades to pay down.

The 27-nation’s EU’s debt stood at 81.7 percent in the second quarter, the EU’s statistics agency Eurostat said in the first release of such data.

Brussels is stepping up the monitoring of the region’s debts as it tries to prevent any recurrence of the two-year sovereign debt crisis.

In comparison, US debt-to-GDP hit 100 percent in 2011 and under its current trajectory would exceed 115 percent of GDP by 2016, according to International Monetary Fund figures.

The World Bank said last month that Europe’s debts may not reach manageable levels until 2030. That could potentially erode Europe’s leadership in the world, while less-indebted emerging countries expand their economies and their influence.

France and Britain both had a level of 85.2 percent and even Germany, the bloc’s biggest economy that is driving EU austerity efforts, was at 81.8 percent in the July to September period.

Greece was at 159.1 percent.