Portugal's public debt reached 131.3% of GDP in the second quarter of this year, the third largest in Europe, according to data released today by Eurostat.
This is a quarterly rise of 3.8% compared to the first quarter of this year and 13.1% higher than at the same time last year, so much for austerity measures, this is concerning on an internal and international level and Portugal may be lucky to maintain its already poor but seemingly stable credit ratings.
Greece, the basket case of Europe, heads the list at a monumental 169.1% at the end of the second quarter, up 8.6%, then Italy at 133.3%. Among the eurozone countries the average public debt was 93.4% of GDP.
If Portugal is intent on going it alone in the international markets to support its spendning, this type of economic indicator will help drive interest rates on government bonds to unpayable heights, certainly there is a risk of bonds interest rates ending up over the magic 7% mark above which the country will be seen to be borrowing largely just to pay its interest bills.
Comments
In short Germany must now make its move to save Europe (or bits of it) for its own ends or the Latin states need cast aside burdening future generations to years of poverty. Many countries have done it before worldwide. Even the US refused to repay it $ debts in gold in 1973. Now its Europe's turn.