- Al Sharpton, Trayvon Martin’s parents rally against Fla. ‘stand your ground’ law
- Hillary Clinton campaign got illicit funds from D.C. scandal figure
- Obama administration backs off plan to cut prescription-drug program
- Tickets linked to stolen passports purchased by Iranian middleman
- More than 3,500 police planned for Boston Marathon
- Ottawa day care suspends 2-year-old for ‘outside’ cheese sandwich
- Liam Neeson tells NYC mayor to ‘man up’ in horse carriage fight
- Real-life Dr. Doolittle to reveal how to talk to animals
- Climate change could bring back smallpox, researchers say
- Shoe-bomb witness to speak from London at N.Y. trial
Eurozone debt hits 90% of economy
Five countries in recession; business activity drops
LONDON — In spite of years of harsh spending cuts and tax increases, Europe’s debt problems are getting worse.
The European Union’s statistics office, Eurostat, reported Wednesday that, at the end of the second quarter, the total government debt of the 17 countries that use the euro was worth 90 percent of the group’s total economic output for the year. That is the highest level since the euro was launched in 1999.
The rise from the previous quarter’s debt-to-GDP ratio of 88.2 percent, and the previous year’s equivalent of 87.1 percent, is a result of the eurozone’s economic problems – which are making it harder for countries to handle their debts.
Many analysts expect the eurozone to slip back into recession in the third quarter of the year, when official figures are published next month. A recession is technically defined as two quarters of negative growth in a row.
Other figures Wednesday pointed to a deepening economic crisis in the eurozone.
The purchasing managers’ index – a gauge of business activity – from financial information company Markit fell from the previous month’s 46.1 to 45.8 in October – its lowest level in more than three years. Any figure below 50 indicates a contraction in activity.
Meanwhile, a closely watched survey from the economic research group Ifo Institute found that business confidence in Germany, Europe’s biggest economy, dropped for the sixth month in a row, confounding expectations of a modest increase.
Ifo’s key figure for October dropped to 100, from 101.4 in September.
Germany has been the main reason why the eurozone has not fallen into recession.
The country’s powerhouse exporters, such as Volkswagen and BMW, have taken a slice of rising trade volumes around the world while its consumers have shown an increasing appetite to spend.
But Germany’s economy recently has lost its momentum as the debt troubles on its doorstep have weighed on economic confidence.
A shrinking economy makes the value of a country’s debt as a proportion of the size of its economy worse.
For example, Italy’s debt burden has risen from 123.7 percent in the first quarter to 126.1 percent in the second quarter, while its economy has shrunk for four straight quarters.
TWT Video Picks
By David Keene
Conference showed that the values Reagan cherished still endure
- FCC targets black conservative in TV station fight
- Hillary Clinton campaign received funds from Jeffrey Thompson
- Kim Jong-un calls for execution of 33 Christians
- Senate Democrats, Republicans spar over restoring unemployment benefits
- Unanimous Senate passes bill on military sex assault to give victims more say in prosecution
- 80 people publicly executed across North Korea for films, Bibles
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- Sharyl Attkisson resigns from CBS after months of talks
- Liam Neeson tells NYC mayor to 'man up' in horse carriage fight
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again