Eurostat reported on July 23 that government debt in the eurozone rose 4.5% year over year to a record €8.3 trillion during Q1 2012. Economic activity did not increase as fast as government debt, which rose to 88.2% of the eurozone's GDP from 86.2% a year ago. Greece's ratio was one of the few that fell (to 132.4% from 152.4%), but remained the highest in the area. Rising were Italy (to 123.3% from 119.5%), Spain (to 72.1% from 64.7%) and France (to 89.2% from 84.3%). Europeans seem to be struggling to resolve their debt crisis by trying to lower their borrowing cost so they can borrow more!
Source: Ed Yardeni — Ed Yardeni is the president and chief investment strategist of Yardeni Research Inc., a provider of independent investment strategy and economics research for institutional investors.