Wealthy Countries Continue to Struggle with High External Debt to GDP Ratio's

According to the World Bank, it appears that while some developing countries managed to balance their checkbooks despite the worldwide economic downturn, the struggle continues for wealthier countries to decrease their debt. In the United States, our external debt to GDP ratio has increased from 84.1% in 2006, to 100.2% in 2012. In comparison, Portugal's external debt to GDP ratio is the highest among all the countries measured. From 2006 to 2012, their debt ratio increased from 189.0% to 228.9%. Greece has the second highest ratio but endured the largest increase in the debt ratio. In 2006, the World Bank estimated that their debt ratio stood at 125.8%. By 2012, it exploded by more than 80% to 206.4%. France has the third highest debt ratio, 190.8%, followed by Germany at 170.4%, Spain at 169.7%, Italy at 118.9%, and then the United States at 100.2%.
     
Interestingly, despite the struggles of developed countries to stabilize their debt, developing countries continue to enjoy low levels of external debt to GDP ratios. China's ratio stood at 9.5%, followed by 17.2% for Brazil, 18% for India, 27% for Mexico, 29.3% for Russia, and 41.3% for Turkey.

Mixed GDP Prospects for the Eurozone

According to a recent interactive chart by The Economist, problems surrounding the euro have eased since restructuring took place.  Spearheaded by the president of the European Central Bank, the ECB has, under specific conditions, purchased short-term bonds from countries that were facing economic decline.  Countries that were facing severe economic decline have seen gains, notably in the area of current-account deficits turning to surpluses in Ireland.  Also quite positive, Spain and Portugal's current-account deficits have been lessened.

Government debt is still a subject for concern in the peripheral countries of the Eurozone, with Portugal, Ireland, and Italy having governmental debt at over 100% of their GDP.  Greece is in the deepest debt, with government debt at 175% of the Greece's GDP.  Another area for future progress is within the increased gap between the countries within the Eurozone that are doing the lending and those that are on the recipient end of those loans; Germany's GDP will grow this year, while Greece's will fall, adding another year to its six of recession.

One in Two Youth in Spain is Unemployed

Business Insider’s Chart of the Day for May 2^nd highlighted a graph from Scott Barber and Thomson Reuters depicting youth unemployment rates in Europe.  Greece and Spain both possessed the highest rate, with more than one in two youth being unemployed.  These two nations are followed by Portugal Italy, and Ireland, with youth unemployment rates of 36.1%, 35.9%, and 30.3% respectively.  Germany, on the other hand, has weathered the economic recession quite well, and its youth unemployment rate has actually decreased since the recession began.  In comparison to the United States’ 16.4% rate, Germany, Malta, Austria, and the Netherlands are the only nations in the EU27 with a lower youth unemployment rate.  Overall, the Euro area possesses a 22.1% youth unemployment rate.

Apple Worth as Much as All Public Companies in Spain, Greece, and Portugal

Bloomberg reports that Apple’s market value stands at $586 billion, which is nearly the same as the total market value of every single public company in Spain, Greece, and Portugal combined.  This comparison illustrates not simply Apple’s rapid growth, but also the serious consequences of Europe’s sovereign-debt crisis.  In November 2007, the value of these three nations’ public companies stood at 11 times that of Apple’s, but this peak vanished rapidly.  The debt crisis wiped $1 trillion off the total value of the nearly 500 publicly traded companies in Spain, Greece, and Portugal – a 62% plunge. 

This report comes on the heels of a recent article in The Atlantic highlighting Eurostat data on unemployment in Europe.  The data shows that Spain, Greece, and Portugal possess the unemployment rates of 23.6%, 21.0%, and 15.0% respectively, the three highest in Europe.