6 ms·

European Union Debt by Country

74 points by kghamilton89 9y ago

marvel_boy 9y ago
It is impossible to pay this amount of money. For this simple reason the interest rate is zero, almost negative: European central bank is buying huge amounts of national debt. Setting an interest rate of zero is just a trick to lower debt interest payments. EU is doomed.
- zdkl 9y ago
  Wasn't the fed at zero/negative as well recently?
  - based2 9y ago
    https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ https://fred.stlouisfed.org/categories/22 https://fred.stlouisfed.org/categories/22 https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN http://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html http://www.ecb.europa.eu/stats/policy_and_exchange_rates/key... http://ec.europa.eu/eurostat/statistics-explained/index.php/Structure_of_government_debt http://ec.europa.eu/eurostat/statistics-explained/index.php/...
- JoiDegn 9y ago
  Can you please explain the reasoning behind your statements better? The way they stand it seems like you say it is impossible to repay the debt because the interest rate is zero. Why would that make it harder to repay? Finally, why do you follow that the EU is doomed?
  - smcl 9y ago
    They're saying its the other way round - it's impossible to repay, so the rate is set to effectively zero. I disagree with GP however, and don't think the EU is doomed
    - alkonaut 9y ago
      The issues are more EMU (Eurozone) than the EU?
- EliRivers 9y ago
  Is it necessary to pay this money?
  - tehabe 9y ago
    No it isn't. If all the debt is paid in full, the only effect this would have is that the income of the economy would be lower. The interests are low now because many states don't invest as much as they used to do. So the demand for money is low. And when the demand for something is low, the price for it goes down.
    - iagooar 9y ago
      Trying to wrap my head around "the demand for money is low, the price goes down". Genuinely curious.
      - lowpro 9y ago
        If an entity doesn't see a good way to invest money, they won't borrow money to make money. This is what they mean when 'the demand for money is low'. If the government borrowed money, they would not make as much on that money as the interest payment to who they borrowed from, so they never borrow the money. This has the overall effect of reducing money demand, reducing the premium to get that money (the interest rates continue to drop). Everyone though 0% interest was a hard line and you couldn't go lower, until negative interest rates were introduced to try and reverse this trend, which it largely hasn't.
      - thesumofall 9y ago
        What part of it? You are a bank and try to earn as much as possible with the money your customers gave you. However, states, consumers, and businesses don't invest as much as they used to / don't borrow as much money. What do you do as a bank? You lower your interest rates to try to attract at least some customers. Combine that with exceptional supply due to quantitative easing and you have what you have right now
      - tehabe 9y ago
- Brakenshire 9y ago
  EU debt is lower as a percentage of GDP than the US or Japan.
  - _0ffh 9y ago
    Also quite interesting is that total EU debt stayed ~constant 2008-2016, while in the same time frame US federal debt ~doubled.
    - adventured 9y ago
      The US made a huge fiscal mistake in going on a hyper government spending spree in response to the recession, whereas most European nations heavily locked down spending expansion. The US did however get new annual economic output the size of Germany's entire economy out of the 2008-2016 time frame. During that time, the EU's economy didn't hardly expand at all, with numerous nations suffering hardship (eg Spain, Italy, Greece, Portugal, Finland). France and Germany also saw essentially zero growth during that time (France lost $400 billion off its GDP due to the dollar, from 2008-2016). It's only just in the last 12 to 18 months that the EU economy is starting to pick up steam. Which approach is better? I prefer lower debt personally, I would have rather the US lock down spending to population growth in response to the recession; such that we might have closer to 60%-80% debt to GDP today.
      - _0ffh 9y ago
        Good point there. While I also think that lower debt is very desirable, the US example here seems to show that there is a positive effect to be had from spending as opposed to a strict austerity policy. It's probably a matter of degree and specific circumstances and goals how much spending exactly is most appropriate.
  - adventured 9y ago
    The US solidly off-sets the difference with its ownership of the global reserve currency. Japan, which also has drastically more debt as a % than the US (and without the consistent growth or assets), doesn't quite have that benefit. When the US debases the dollar, a big part of that inflation is absorbed by the global economy (such as via commodity prices going up, or external dollar instrument holders taking some of the punch). When Japan debases the Yen, the hit is almost entirely absorbed by the people of Japan and its economy.
tyingq 9y ago
Per capita would be interesting to show as well.
- rodionos 9y ago
  Here's the gross gov't debt per capita: https://apps.axibase.com/chartlab/e92a4f6c/2/#fullscreen https://apps.axibase.com/chartlab/e92a4f6c/2/#fullscreen
  - tyingq 9y ago
    That is more interesting, thank you. I wonder what happened in Ireland.
    - barking 9y ago
      Bank guarantee and then arm-twisting by EU not to do and Iceland because of possible contagion. Also welfare and pensions were maintained as the economy shrunk, possibly to prevent unrest.
    - the_why_of_y 9y ago
      Deregulation and low tax rates created an outsized financial services industry that fueled a housing bubble which then burst and had to be bailed out by the state, quadrupling the public debt. http://crookedtimber.org/2010/11/09/cultures-of-impunity/ http://crookedtimber.org/2010/11/09/cultures-of-impunity/
plaidfuji 9y ago
This post seems like it was meant more as a demonstration of the data viz, but to me this is just adding an overly complicated interface to a dataset that doesn't need interactivity. It's easy to show debt vs time for all countries as well as the aggregate in a single plot without drop-down menus: it's called a stacked bar plot.
- rodionos 9y ago
  Here's the stack chart in 23 lines. https://apps.axibase.com/chartlab/e92a4f6c https://apps.axibase.com/chartlab/e92a4f6c It is in fact a demo of declarative graphics at work.
  - Camillo 9y ago
    Could you do the stack chart by percentage of the total?
akvadrako 9y ago
This is the wrong number to look at. It's the face value of the debt, which has no practical value; consider debt at 0% interest with a long repayment plan vs payday loans due today. International Public Sector Accounting Standards (IPSAS) is the new international standard and makes much more sense; it considers only the market value of your debt, i.e. how much you could find someone to buy it for. Here is a sample of public debt/GDP ratios from 2013. Clearly, proper accounting drastically affects the results: http://english.capital.gr/News.asp?id=2321087 http://english.capital.gr/News.asp?id=2321087
- sandstrom 9y ago
  I agree there is a difference between long-term and short-term debt. Obviously if you don't have money and your payday loan matures (has to be paid) tomorrow that's different from a loan maturing in 30 years -- when you may or may not have money, and when inflation/deflation may have increased or decreased the absolute value of that debt. But the graph in your link makes it look like Greece is less indebted than the Netherlands. As the article states, that's because the market value of Greek debt is low (lower than nominal value). That's because few want to buy it, since many think Greece won't repay its debt. Yes, if Greece defaults on its loans they will go away. But it will have consequences. For example, lending money in the future may be more difficult. More generally, if a country borrows linearly at some point no one will believe in their ability to repay, so market value will trend towards zero. With your measure the indebtedness of a country will go towards zero (along with the market value of its debt) the more it borrows. It doesn't make sense. The debt is still there and defaulting on it will have consequences.
  - akvadrako 9y ago
    > That's because few want to buy it, since many think Greece won't repay its debt. You don't understand - what it means is I would be willing to take on Greece's debt obligations for an immediate financial compensation much less than the face value. It has nothing to do with their creditworthiness. Also, because Greece's debt is actually lower than the Netherlands, or at least it was in 2013, I personally think lending them money would be a great investment and I'm not the only one[1]. It's just not an option for political reasons. [1] http://www.reuters.com/article/eurozone-greece-debt-japonica-idUSL6N0VC3DO20150205 http://www.reuters.com/article/eurozone-greece-debt-japonica...
trevyn 9y ago
Google does this quite well: https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&ctype=l&strail=false&bcs=d&nselm=h&met_y=gd_mio_eur&scale_y=lin&ind_y=false&rdim=country_group&idim=country:at:bg:hr:cy:cz:ee:dk:be:fi:fr:de:el:hu:ie:it:lv:lt:lu:mt:nl:pl:pt:ro:sk:si:es:uk:se&ifdim=country_group&hl=en_US&dl=en_US&ind=false&icfg&iconSize=0.5 https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&...

74 points by kghamilton89 9y ago

It is impossible to pay this amount of money. For this simple reason the interest rate is zero, almost negative: European central bank is buying huge amounts of national debt. Setting an interest rate of zero is just a trick to lower debt interest payments. EU is doomed.

zdkl 9y ago
Wasn't the fed at zero/negative as well recently?
- based2 9y ago
  https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ https://fred.stlouisfed.org/categories/22 https://fred.stlouisfed.org/categories/22 https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN http://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html http://www.ecb.europa.eu/stats/policy_and_exchange_rates/key... http://ec.europa.eu/eurostat/statistics-explained/index.php/Structure_of_government_debt http://ec.europa.eu/eurostat/statistics-explained/index.php/...
JoiDegn 9y ago
Can you please explain the reasoning behind your statements better? The way they stand it seems like you say it is impossible to repay the debt because the interest rate is zero. Why would that make it harder to repay? Finally, why do you follow that the EU is doomed?
- smcl 9y ago
  They're saying its the other way round - it's impossible to repay, so the rate is set to effectively zero. I disagree with GP however, and don't think the EU is doomed
  - alkonaut 9y ago
    The issues are more EMU (Eurozone) than the EU?
EliRivers 9y ago
Is it necessary to pay this money?
- tehabe 9y ago
  No it isn't. If all the debt is paid in full, the only effect this would have is that the income of the economy would be lower. The interests are low now because many states don't invest as much as they used to do. So the demand for money is low. And when the demand for something is low, the price for it goes down.
  - iagooar 9y ago
    Trying to wrap my head around "the demand for money is low, the price goes down". Genuinely curious.
    - lowpro 9y ago
      If an entity doesn't see a good way to invest money, they won't borrow money to make money. This is what they mean when 'the demand for money is low'. If the government borrowed money, they would not make as much on that money as the interest payment to who they borrowed from, so they never borrow the money. This has the overall effect of reducing money demand, reducing the premium to get that money (the interest rates continue to drop). Everyone though 0% interest was a hard line and you couldn't go lower, until negative interest rates were introduced to try and reverse this trend, which it largely hasn't.
    - thesumofall 9y ago
      What part of it? You are a bank and try to earn as much as possible with the money your customers gave you. However, states, consumers, and businesses don't invest as much as they used to / don't borrow as much money. What do you do as a bank? You lower your interest rates to try to attract at least some customers. Combine that with exceptional supply due to quantitative easing and you have what you have right now
    - tehabe 9y ago
Brakenshire 9y ago
EU debt is lower as a percentage of GDP than the US or Japan.
- _0ffh 9y ago
  Also quite interesting is that total EU debt stayed ~constant 2008-2016, while in the same time frame US federal debt ~doubled.
  - adventured 9y ago
    The US made a huge fiscal mistake in going on a hyper government spending spree in response to the recession, whereas most European nations heavily locked down spending expansion. The US did however get new annual economic output the size of Germany's entire economy out of the 2008-2016 time frame. During that time, the EU's economy didn't hardly expand at all, with numerous nations suffering hardship (eg Spain, Italy, Greece, Portugal, Finland). France and Germany also saw essentially zero growth during that time (France lost $400 billion off its GDP due to the dollar, from 2008-2016). It's only just in the last 12 to 18 months that the EU economy is starting to pick up steam. Which approach is better? I prefer lower debt personally, I would have rather the US lock down spending to population growth in response to the recession; such that we might have closer to 60%-80% debt to GDP today.
    - _0ffh 9y ago
      Good point there. While I also think that lower debt is very desirable, the US example here seems to show that there is a positive effect to be had from spending as opposed to a strict austerity policy. It's probably a matter of degree and specific circumstances and goals how much spending exactly is most appropriate.
- adventured 9y ago
  The US solidly off-sets the difference with its ownership of the global reserve currency. Japan, which also has drastically more debt as a % than the US (and without the consistent growth or assets), doesn't quite have that benefit. When the US debases the dollar, a big part of that inflation is absorbed by the global economy (such as via commodity prices going up, or external dollar instrument holders taking some of the punch). When Japan debases the Yen, the hit is almost entirely absorbed by the people of Japan and its economy.

tyingq 9y ago

Per capita would be interesting to show as well.

rodionos 9y ago
Here's the gross gov't debt per capita: https://apps.axibase.com/chartlab/e92a4f6c/2/#fullscreen https://apps.axibase.com/chartlab/e92a4f6c/2/#fullscreen
- tyingq 9y ago
  That is more interesting, thank you. I wonder what happened in Ireland.
  - barking 9y ago
    Bank guarantee and then arm-twisting by EU not to do and Iceland because of possible contagion. Also welfare and pensions were maintained as the economy shrunk, possibly to prevent unrest.
  - the_why_of_y 9y ago
    Deregulation and low tax rates created an outsized financial services industry that fueled a housing bubble which then burst and had to be bailed out by the state, quadrupling the public debt. http://crookedtimber.org/2010/11/09/cultures-of-impunity/ http://crookedtimber.org/2010/11/09/cultures-of-impunity/

plaidfuji 9y ago

This post seems like it was meant more as a demonstration of the data viz, but to me this is just adding an overly complicated interface to a dataset that doesn't need interactivity. It's easy to show debt vs time for all countries as well as the aggregate in a single plot without drop-down menus: it's called a stacked bar plot.

rodionos 9y ago
Here's the stack chart in 23 lines. https://apps.axibase.com/chartlab/e92a4f6c https://apps.axibase.com/chartlab/e92a4f6c It is in fact a demo of declarative graphics at work.
- Camillo 9y ago
  Could you do the stack chart by percentage of the total?

akvadrako 9y ago

This is the wrong number to look at. It's the face value of the debt, which has no practical value; consider debt at 0% interest with a long repayment plan vs payday loans due today. International Public Sector Accounting Standards (IPSAS) is the new international standard and makes much more sense; it considers only the market value of your debt, i.e. how much you could find someone to buy it for. Here is a sample of public debt/GDP ratios from 2013. Clearly, proper accounting drastically affects the results: http://english.capital.gr/News.asp?id=2321087 http://english.capital.gr/News.asp?id=2321087

sandstrom 9y ago
I agree there is a difference between long-term and short-term debt. Obviously if you don't have money and your payday loan matures (has to be paid) tomorrow that's different from a loan maturing in 30 years -- when you may or may not have money, and when inflation/deflation may have increased or decreased the absolute value of that debt. But the graph in your link makes it look like Greece is less indebted than the Netherlands. As the article states, that's because the market value of Greek debt is low (lower than nominal value). That's because few want to buy it, since many think Greece won't repay its debt. Yes, if Greece defaults on its loans they will go away. But it will have consequences. For example, lending money in the future may be more difficult. More generally, if a country borrows linearly at some point no one will believe in their ability to repay, so market value will trend towards zero. With your measure the indebtedness of a country will go towards zero (along with the market value of its debt) the more it borrows. It doesn't make sense. The debt is still there and defaulting on it will have consequences.
- akvadrako 9y ago
  > That's because few want to buy it, since many think Greece won't repay its debt. You don't understand - what it means is I would be willing to take on Greece's debt obligations for an immediate financial compensation much less than the face value. It has nothing to do with their creditworthiness. Also, because Greece's debt is actually lower than the Netherlands, or at least it was in 2013, I personally think lending them money would be a great investment and I'm not the only one[1]. It's just not an option for political reasons. [1] http://www.reuters.com/article/eurozone-greece-debt-japonica-idUSL6N0VC3DO20150205 http://www.reuters.com/article/eurozone-greece-debt-japonica...

trevyn 9y ago

Google does this quite well: https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&ctype=l&strail=false&bcs=d&nselm=h&met_y=gd_mio_eur&scale_y=lin&ind_y=false&rdim=country_group&idim=country:at:bg:hr:cy:cz:ee:dk:be:fi:fr:de:el:hu:ie:it:lv:lt:lu:mt:nl:pl:pt:ro:sk:si:es:uk:se&ifdim=country_group&hl=en_US&dl=en_US&ind=false&icfg&iconSize=0.5 https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&...