The debt of the 17 nations sharing the euro rose to 87.2 percent of gross domestic product in 2011 â€“ the highest level since the euro was introduced in 1999, according to the Eurostat report released today. In 2010 the debt level was at 85.3 percent.
The debt of the euro zone increased last year due to the governmentsâ€™ efforts to fund bailouts of the neighbouring countries unable to repay its debts. Euro zone nations had to allocate 386 billion euros in bailouts for Greece, Ireland and Portugal after those nations were forced to seek rescues, when their borrowing costs become unsustainable.
In the Eurostat report, Greece was on the top of the list with debt at 165.3 percent of GDP. Italy had the second-highest level of debt at 120.1 percent of GDP last year, while Spainâ€™s jumped to 68.5 percent from 61.2 percent.
Only five euro region nations â€“ Estonia, Luxembourg, Slovenia, Slovakia and Finland â€“ had debt within the euro zoneâ€™s limit of 60 percent of GDP, while Estonia had the smallest proportion of debt at 6 percent. Ireland posted the biggest budget deficit in its history at 13.1 percent of GDP, which was higher than the 10.4 percent target under the countryâ€™s bailout program.
Germany had one of the only declines, with its debt shrinking to 81.2 percent from 83 percent, Eurostat said in the report.
The euro zoneâ€™s overall budget deficit declined to 4.1 percent of GDP in 2011 from 6.2 percent in the previous year, as Greece, Spain and France began to implement austerity measures aimed at containing the debt crisis and convincing investors that Europe can manage its public finances.
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