Euro Area Debt at Four-Year Low

Consolidated debt in the Euro Area fell to the lowest level in four years, according to 3Q2016 figures released today.

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The overall average for the monetary union fell to 90.1% of GDP in the third quarter, with continued wide dispersion among its members. Greece remains closer to 180% of GDP– nearly three times the ECB’s mandated 60% limit. Denmark and Sweden (both with debt to GDP at ~40%) are the only two countries to have consistently maintained debt within the prescribed parameters.

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Ireland, for the 11th quarter in a row, was the largest contributor to the decline, followed by the Netherlands, Germany, Denmark, and Sweden. Debt levels rose in Greece and Portugal in the third quarter.

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Looking back over the last decade, we see that overall Euro Area debt levels (yellow triangles in the chart below) haven’t fallen this consistently– about 1%yoy each quarter from 2Q2015 until now– since 2007/2008.

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