In a clear sign that Austerity measures are a failure data released on Monday showed that just two Eurozone countries managed to reduce their public debt in the first quarter of 2013. Germany, the region’s biggest economy was one, and tiny Estonia was the other.
The official figures compiled by Eurostat show that the debt burden of the 17 members of the Eurozone have hit an all time high in the first quarter of 2013 despite the implementation of harsh austerity measures designed to bring public finances back to health. The overall government debt as a proportion of the total GDP increased to a record high 92.2% in the first quarter of 2013, up from 90.6% seen in the previous quarter.
Germany managed to cut its public debt to 81.2% of GDP in the three-months to March from the 81.9% seen in the final quarter of 2012. Estonia meanwhile managed to bring its debts down to 10% of GDP, the lowest debt ratio in Europe. Estonia only joined the Eurozone in 2011.
Austerity measures designed to cut debt have been a catastrophic failure. The misguided policies have inflicted untold misery and hardship upon the peoples of Europe and have failed dramatically in their aims. Nations like Portugal and Greece continue to be mired in economic crisis and yet both governments are being made to inflict further austerity at the bequest of their international lenders the troika.
There are currently five Euro zone members with debt to GDP ratios higher than 100% of the GDP, led by troubled Greece with 160.5% and followed by the bloc’s fourth biggest economy, Italy with a debt of 130.3%.
A further indictment against austerity is the fact that all of the countries suffering the biggest rise in debt, as a percentage of GDP, are all in bailout programmes or trying desperately to avoid one.
Over the past year the highest increases in the GDP/debt ratios were recorded in Greece (+24.1%), Ireland (+18.3%), Spain (+15.25%), Portugal (+14.9%) and Cyprus (+12.6%).
As a result of the data release the Euro has weakened against Sterling.
Euro (EUR) Exchange Rates
As of 12:00pm
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3185 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8599
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6627 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3625 >