Global Economy World Economy
18 Nov, 2010
One of the primary reasons responsible for the crisis in the eurozone is that virtually all the countries involved have breached their own self-imposed rules.
Government debt must not exceed 60% of GDP at the end of the fiscal year, according to the convergence criteria adopted as part of economic and monetary union. Likewise, the annual government deficit must not exceed 3% of the GDP. However, as indicated in the maps, only two of the 16 countries in the eurozone area - Luxembourg and Finland - have managed to stick to both rules.
Overall, Greece is the worst offender, with debt at 115.1% of GDP and a deficit of 13.6% of GDP. But among the bigger economies, Italy's debt is even higher than Greece's as a percentage of GDP, while Spain's deficit is 11.2% of GDP. If the UK were in the eurozone, it would also fall foul of the criteria, with its debt now standing at 68.1% of GDP and its deficit at 11.5% of GDP.