Wednesday 21 September 2011

Confused about debt and deficit

I find it very difficult to

1 Find out the actual data of debt and deficit of european countries

2 See how on earth almost all euro countries are breaking the Maasricht treaty!

The Treaty

When the euro zone was set up their were entry requirements, and it was assumed that these would continue to be met. They are:

* Inflation not greater than 1.5% points above the average of the 3 lowest countries

* Deficit/GDP less than 3%

* Debt/GDP less than 60%

* Long term interest rates not more than 2% higher than the 3 least inflation countries

A few things I have found

The worst debt/GDP is in Greece, in 2010 this was 143%. The figure for UK, not in the euro zone, was 76%… The strong men of Europe, Germany and France had 83% and 82% respectively. Spain and Italy were 60% and 119%, Ireland was 97% and Portugal 93%. In other words only Spain was at the limit, all others had broken the rules. And their governments had done nothing about it.

As far as the deficit is concerned I have little data, but in 2009 Greece was 13.6%, UK 11.5%. France was 7.5%… Again some big players breaking the rules by BIG margins.

Wouldn't it be nice to have a simple table showing Debt/GDP, Deficit/GDP, Inflation, Debt in euro (including government, banks, individuals and any hidden stuff like the UK's PFI)?

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