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Eurozone debt rises sharply
July 22, 2014 , 9 : 45 pm GST
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In the full 28-member EU, total debt rose to 88% from 87.2%, the Eurostat statistics agency said. Photo: Bloomberg file picture
Eurozean public debt — the accumulated total of government budget deficits and borrowing — rose sharply earlier this year, reversing a downtrend when the economic crisis eased, official figures showed on Tuesday.
The 28 European Union states are supposed to keep total public debt below the equivalent of 60 per cent of annual economic output, while annual budget deficits must not exceed 3.0 per cent.
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.
Total debt rises
The result is that total debt in the 18 eurozone countries rose to 93.9 per cent of gross domestic product in the first three months of 2014, up from 92.7 per cent in the fourth quarter 2013. In the full 28-member EU, total debt rose to 88 per cent from 87.2 per cent, 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 yesterday's figures may give pause for thought in doing so.
Among those with the highest total debt levels were Greece on 174.1 per cent of annual output, Italy 135.6 per cent and Portugal 132.9 per cent, levels which many analysts believe make full repayment an unlikely prospect.
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