Eurozone debt - interesting graph

[VHG]

Interesting graph on the BBC web site, showing who owes what to who amongst the Eurozone countries.

Click on the country to see who owes what to who (and how much).

http://www.bbc.co.uk/news/business-15748696

Funny thing is Greece owes 38,000 euros per person, UK owes 117,000 Euros per person, and Ireland owes 390,000 Euros per person.

But Ireland's GDP is the same as Greece (0.2 trillion Euros) but Ireland's debt is 1.7 trillion Euros to Greece 0.4 Trillion.

So how come Greece seems to be in so much of a mess compared with Ireland?

I know Ireland are in SOME financial mess but it does not seem to get the publicity Greece gets.

[jno]

because Greece is worst off and therefore the most newsworthy? It's not just how much you owe but what prospect there is that you can repay it.

Also because they in effect triggered the crisis by admitting they'd cooked their books.

[ll_billym]

A very good article here which explains the differences between the countries debt issues.

http://www.cfr.org/eu/eurozone-crisis/p22055

[Bobbisox]

I put a letter up here a while back about the state the Euro was heading?
I had to ask for it to be removed though as it was ridiculed, I still have the email should you wish to see it, you would be welcome VHG

[boxtops]

That is really interesting chart, VHG - thank you for the link.

[DTCwordfan]

Thanks VHG - it begs the question if I owe you 50 and you owe me 70, why don't we cancel out the 50 so you only owe me 20.......so why don't governments do this in the first instance.

Am I being to simplistic.....but it would be a start, even allowing for different terms, the interest rates and tax positions on the net debt could be adjusted to allow for these variances.

[Kayless]

bobbi, you should know that the anti British on here will never tolerate any criticism of the EU. If you do not agree that we should be in the Euro and swallowed up in a corrupt superstate you are considered an unintelligent little Englander. Even when you turn out to be correct they will never acknowledeg it!

[VHG]

>>>so why don't governments do this in the first instance.

I dont think the money is owed to the governments of those countries, it is the BANKS in those countries who are owed the money.

[Bobbisox]

the email in question Kayless came from a MD of a world wide company....

[Bobbisox]

sorry that should have read
Financial Director

[rov1100]

For many countries that have little or no debt in Africa makes you think they are really better off than us. Why we should give aid on borrowed money escapes me.

[jake-the-peg]

The point is DT these countries don't owe the Gnments of other countries they owe investors in other countroveries.

The UK Government borrows money and often borrows that money from you and me in investments like pension funds.

Similarlly Greece owes a lot of money to French Banks and so forth.

It doesn't just cancel out.

Also note that this isn't just the Euro-zone on this chart - look at the US!

But the reason that Greece and Italy were so scary was that there was no end in sight they were borrowing more than they were receiving and their economy's were hardly growing at all.

When the economy shrinks there are fewer jobs - more dole payments and less tax take and you get into a vicious circle.

This is why no Growth in the UK economy is so bad.

Not surprising seeing as they've pulled so much Government spending and that's only just begining to bite.

The Governments plan was that the private sector was going to take up that slack - which is why they're desperate for banks to lend more to small businesses to make that possible.

But they're not lending enough - they say because the Government has also told them to beef up their reserves

Also there just doesn't seem to be the confidence.

The risk is that yanking out all of that public spending right now will put us into a downward spiral of confidence.

Time for a new Chancellor?

[New Judge]

One of the reasons why the UK government pays about a quarter of the interest rate to borrow money as does, say, Italy or Spain is because investors have far greater confidence in the government to get the economy (and in particular the nation’s borrowing) under control.

Their policies, in my view, do not go anywhere near far enough and the deficit will not be reduced anywhere near as quickly as it could and should. Huge sums of money are frittered away on useless projects which are of little or no benefit to anybody other than the staff employed to run them. Public authorities squander money at an unsustainable rate on “services” that the nation simply cannot afford and in many cases do not need anyway.

The problem that the UK (and many other European countries) faces is that they have simply borrowed too much money to fund current spending and the cost of that borrowing has become prohibitive (and in the case of Greece, destructive). To suggest that the way out of the mess is to borrow even more to support even greater spending is rather like giving an alcoholic free access to a distillery to help cure his addiction.

The reason why Greece has appeared as the biggest basket case of those nations currently in difficulties is because it has shown neither the desire nor the ability to get its finances under control. They lost control since joining the Euro (which they were not eligible to join had the entry criteria been adhered to). They ran up huge debts borrowing money at far below the rates that would have prevailed had they kept the Drachma, squandered most of that cash until it was belatedly realised that they had not a hope in hell’s chance of ever repaying the loans. Now they are trapped with huge debts which must be paid in a currency they cannot afford to use. Similar problems exist in Italy. That is why an EU stooges have been appointed to head those countries so that their “recovery” accords with EU policy and that their governments do not stray from the EU/Eurozone hymnsheet.