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Category: Global Economy Sub-category: World Economy
Document type: news
18 Nov, 2010
One of the primary reasons responsible for the crisis in the eurozone is that virtually all the countries involved have breached their own self-imposed rules.
Government debt must not exceed 60% of GDP at the end of the fiscal year, according to the convergence criteria adopted as part of economic and monetary union. Likewise, the annual government deficit must not exceed 3% of the GDP. However, as indicated in the maps, only two of the 16 countries in the eurozone area - Luxembourg and Finland - have managed to stick to both rules.
Overall, Greece is the worst offender, with debt at 115.1% of GDP and a deficit of 13.6% of GDP. But among the bigger economies, Italy's debt is even higher than Greece's as a percentage of GDP, while Spain's deficit is 11.2% of GDP. If the UK were in the eurozone, it would also fall foul of the criteria, with its debt now standing at 68.1% of GDP and its deficit at 11.5% of GDP.
