Eurozone debt burden a record high

Europe's debt dynamics keep getting worse in spite of years of cost-cutting and tax rises designed to return public finances to health.

Official data this week showed that the debt burden of the 17 European Union countries that use the euro hit all-time highs in the first quarter, even after austerity measures were introduced.

Eurostat, the EU's statistics office, said government debt as a proportion of the gross domestic product in the eurozone rose to a record 92.2 per cent in the first quarter of this year, from 88.2 per cent in the same period a year ago.

Battered by a global recession, a banking crisis and in some cases lax financial management, a number of euro countries have been forced to take remedial action to deal with their debts, some in return for multibillion euro bailouts.

Some progress has been made. Greece, for example, is expected to start posting economic growth next year while recording a primary surplus - the annual budget excluding debt-related payments - after years of savage austerity that contributed to a near six-year recession and an unemployment rate of about 27 per cent.

One effect of the austerity measures has been to keep a lid on growth. Many countries are in recession and shrinking economies can make the debt-to-GDP ratio less favourable. Coupled with the fact that countries continue to add to their debt by continuing budget deficits, the overall debt burden of the eurozone has continued to rise.

The eurozone recession started at the end of 2011.

Greece has the highest debt burden in the eurozone of 160.5 per cent.