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Eurozone debt hits record high

Eurozone debt hits record high
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The eurozone continues to sink deeper into debt.

The latest figures show that only Germany – which is the region’s biggest economy – and tiny Estonia reduced their public debt in the first three months of this year.

The single currency bloc is trapped in recession, with a record high jobless rate and fragile prospects for economic recovery.

The average debt is 92.2 percent, that is up from 88.2 percent one year earlier as the total hits a record of 8,750 billion euros.

There are five countries with debt higher than 100 percent of their GDP. The top three are Greece(160.5 percent), Italy (130.3 percent) and Portugal (127.2 percent).

Those with the lowest debt to GDP ratios are Luxembourg (22.4 percent) and Estonia (10 percent).

By comparison Britain’s debt as a percentage of GDP was 88.2 percent, up from 85.1 percent in the first quarter of 2012.

Greece posted the highest rise in the European Union over the previous year.

Its economy is however expected to start growing again next year .. finally reducing its debt after years of austerity that has contributed to an almost six year long recession .

Italy’s debt burden is one reason why S&P downgraded the country from BBB+ to BBB earlier this month and said further downgrades were possible, which in turn has pushed up the cost of borrowing for the Rome government.

To help economic growth, European governments have decided to slow down the pace of fiscal tightening, triggered in 2010 by quickly rising borrowing costs as investors worried that huge debts diminished their prospects of getting their money back.