HowMuch.net | The countries with the highest debt-to-GDP ratios are Japan (230%), Greece (177%), Lebanon (134%), Jamaica (133%), Italy (132%), and Portugal (130%). This isn’t necessarily a huge problem. As long as countries are using borrowed funds to successfully stimulate their economies, they will be able to pay back their debts on time.
After recently raising Spain’s sovereign ratings to ‘BBB+’ from ‘BBB’, S&P has also improved its stance on some of the country’s top banks. S&P’s upgrades comes in the same week as the Madrid local authorities said they could not renew the contracts with that agency.
Yiannis Mouzakis via Macropolis | The head of the European Stability Mechanism (ESM) Klaus Regling leads an organisation that in its previous form as the European Financial Stability Fund (EFSF), issued loans of 17.7 billion euros to Ireland, 26 billion euros to Portugal and just under 131 billion to Greece.
By Manos Giakoumis at MacroPolis | Following the European Central Bank’s governing council meeting on Thursday, Mario Draghi provided more detail about issues relating to the eligibility of Greek government bonds (GGBs) for the Quantitative Easing (QE) programme and reinstating the waiver on Greek government securities for ECB funding.
By Alicia García-Herrero at Bruegel | Sitting on a pile of debt, China’s only way out is to deleverage: more pain now for sustainable growth later. [Figure: China’s augmented fiscal deficit as % of GDP.]
Conn M. Hallinan | On one level, the recent financial agreement between the European Union (EU) and Greece makes no sense. Not a single major economist thinks the $96 billion loan will allow Athens to repay its debts or get the economy moving anywhere but downward.
If it is true that we are in a “Secular Stagnation,” we may need alternative (Keynesian) policies.
What is the meaning of all this dynamic of successive bankruptcies and bailouts?
Germany’s central bank calls for more supervision of the adjustments and reforms in Greece, while the IMF casts doubts over the sustainability of Greek debt.
