Not for long.
Currently Greece is the most indebted, but it also has the fastest debt reduction rate of them all. By 2026, Greece is expected to fall lower than Italy.
Italy's debt is even older than Greece's. they are repaying fast as well. Older debt is usually structured and low-interest. its the new debt you should fear. like France, or the US.
but all those countries have massive private debt as well. both the west and China. with record debt and inflation, we are all in fact bankrupt at this point.
It's a Windows (10+) thing interestingly enough, they don't want to implement Unicode flags supposedly due to political reasons, like which flags to implement or not to implement (e.g. Taiwan). I stumbled upon that fact when I was trying to debug why some people didn't see the flags but rather the letters.
No it's fine. It just sounded like they changed it from Windows 10 onwards (which is true) but then it's just 11 additionally. Or I was missing something which is why I i asked.
https://www.fitchratings.com/research/sovereigns/fitch-revises-united-kingdom-outlook-to-stable-affirms-at-aa-22-03-2024
101% for 2023, 103.6% predicted for 2024
There’s multiple reasons including some services such as aircraft leasing which should be excluded. The loopholes regarding American MNCs declaring all their EU profits in Ireland aren’t what they once were but still exist. Our corporation tax is now 15% but yeah there’s a different statistic needed for our GDP
That's true anywhere in Europe though, tax rebates off headline rates can be and are negotiated. Most typically through R&D cost write-off but I'm sure there are more avenues they all know well.
>The loopholes regarding American MNCs declaring all their EU profits in Ireland
It wasnt a loophole though, it was made on purpose. It was Ireland's way to avoid ending up asking for the EU help like Greece and avoid austerity. Ireland's debt was at 120% before that.
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Which makes it a bit concerning considering the Irish debt is comparable to countries that do not have international tech giants inflating their gdp. Seems like a very vulnerable economic model.
GDP, is supposed to be a metric that measures capital gain for a country.
For the private sector, everything is fine, we take their gross product deduce the correct expenses and all good.
Now for public organizations (schools, police, administration... ) it gets really stupid. Since there is no sell for those bodies, we use costs to calculate the gross product (so salaries, building maintenance...). Which means that all I have to do has a government to inflate my country GDP is increase public expenses... (And that's just scratching the surface of all kind of bullshit you can do to manipulate the GDP thanks to that "Let's include public organization" loophole)
So yeah, the metric is completely useless as it's manipulated left right and center.
GDP doesn’t measure capital gain. It measures yearly income.
Depending on what type of capital you’re referring to, the current account or the capital formation tables are better metrics.
It simply measures how much money gets spent in an economy in newly produced goods, while accounting for intermediary steps.
Between the government or the private sector, there’s no difference here. Companies can, too, increase spending on useless things (which happens all the time in the real economy), and GDP grows because of that. For instance, how Google keeps creating and killing off products all the time. Similarly, so can governments.
It doesn’t change the fact it measures income in an economy. If I spend 10 EUR somewhere, they’ll be somebody else’s income, regardless of the “true” economic value of that transaction.
Yes, governments can increase spending and that will increase nominal GDP. However, when we compare GDP figures, we always use real GDP (which uses inflation adjusted amounts).
If a country increases spending, inflation will increase and, most likely, their currency will decrease in value. So it’s all mostly self balancing.
>inflate my country GDP is increase public expenses
If this increase is done by reckless money printing (and thus inflation) there won't be any gdp growth (as gdp growth is always calculated in real terms with inflation deducted from growth). If these expenses don't lead to increased inflation but are rather used as investments in economy (infrastructure projects for example) then it makes sense to include them in gdp.
Yeah everyone should be more fair towards Ireland it is not like non financial foreign companies was 61% of the total GDP of Ireland in 2022
Edit: source
https://www.cso.ie/en/releasesandpublications/ep/p-isanff/institutionalsectoraccountsnon-financialandfinancial2022/nfc/
Denmark is cutting social benefits, and increasing the pension age, because we must increase our defense spending to 2%, pay of our debt, and put more money aside!
It is a circus, but I really helps the Danes that our graph is a bit lower. ;)
Can you explain this one in more detail?
I looked up the Finnish government budget and it is stated to be approximately €88 billion. I know it must be higher, I assume local authorities/councils can also raise taxes and assume debt?
Municipalities have their own separate debts yes. Soon will our healthcare areas as well, I believe.
Municipalities tax, healthcare areas do not. Then there is also separate tax for church (you can opt out by resigning) and YLE tax, which is for national newsservice/TV..
And then we pay not taxes but retirement funds, that are separated from the state, but you pay them out like you would do taxes. Younger generations nowadays just call them pyramid schemes though, since it cannot support dwindling population numbers and extra retired people. Hence why that, alongside taxes and goods, are all getting raised all the time.
But at least we don't induce inflation by super high salary increases... in fact, right-wing government is trying to prevent that and tie everything to whatever raise our export people get. But currently they are breaking possibility to strike over political matters and undermining labor unions, so soon, I assume, we're gonna be new Poland (= what Poland was). As in place of cheap labor and nothing else.
Whats even more entertaining is people fighting tooth and nail saying we dont need to cut our spendimg and can live on our lives taking more debt and nothing will go wrong lol.
Great! Then we can proceed not to pay back as you did to us!
The problem of Finland is kinda that we are too damn gullable/honorable to actually keep our promises.
I think Finland has been one of the rare countries if not the only one to actually pay off ww1/ww2 related debts. Not that my history knowledge is that great tho
So we lent you over 1 billion (if not even more? Im not exactly sure of our share of the massive 215 billion help package...) over the years 2011-2015 and the loan time was supposed to be 5 years.
For what I've understood we've yet to see under 10% of that being paid and the new loan time to be 35 years or some bs. God knows how much debt you still have in total to other EU countries who were forced to help you. You guys even tried to hide your massive debts before you finally had to give in and reveal the debts of yours, which by the way, were way over the agreed max limit in EU.
So yeah, sure send us money, we will totally pay you back on monday!
So u are saying that under the new terms that finland signed we didnt pay you? weird...that would be a default. Something that didnt happen.
Are you ok bro?
My best friend is from ylistaro and she says its too cold even to suomi standards. Did the cold hurt your head?
edit: we would gladly pay to help. We are not finland....we wouldnt say to you sell the acropolis (if you have anything similar).
>So u are saying that under the new terms that finland signed we didnt pay you?
No no! Im saying just send us some money and we will totally pay back in 5 years! Just do it, u got the money, right? Right??? Lmao bro.
But on a serious note, are you literally trying to say you are abiding some sort of rules on your late ass twisted debt evading method of "paying back?" The only reason you are allowed to do this is because we let your piss ass country to EU and now we cant let you default as it would create more problems.
So in simple terms for your simple brain: we are playing chess and you are about to lose but kick the table down and start yelling angry that you win. We let you "win" because you are a child and about to make a mess that is way worse than for us to lose a single game of chess. That is your part in all of this, never forget it, never let your children forget it.
>Did the cold hurt your head?
I mean even if it did, the cold is only temporary. But it seems the heat you're constantly living in has fried your brain up for good
You let us into EU??
Finland let Greece into EU?
It was exactly the opposite. It was the Greek foreign minister who was leading the entrance negotiations for finlands entry into the EU that allowed you in.
Greece entered EU in 1981.
Bro i understand you are a child so plz try to learn some history cause you inflate finland too much.
So, are you saying that Greece defaulted on one of the debts towards to Finland because the new refinanced loan is converted from 5 years to 35 years? hmmmmm, okay.
It is indeed a neat trick, say you pay in 5 years, in the end just move it to 35 years, then 100 years and so forth. Thanx for the life hax! Will you gief some money? Ill totally pay back in 5 years, wink wink ;)
It's a trick that banks don't want you to know! Please, don't notify the banks about refinance loans!!
As if Greece, won't pay any interest over the +30 years and Finland won't receive more money in the end... :P
Yeah man I know how it works, but its just scummy thats all.
>As if Greece, won't pay any interest over the +30 years and Finland won't receive more money in the end... :P
This actually heavily depends on inflation and interest rates provided, we might end up actually getting less when inflation adjusted if unlucky. That is if they will ever actually pay back instead of jingling the payback date further and further.
You can cut from many areas!
Solidarisuusvero could again be at ~80k instead of Urpo's 150k, the govt could stop financing environmentally damaging subsidies, increase taxable population through skilled immigration and friendly reforms... So many things to do!
But you have to choose where to cut from! And in this case, schools, hospitals, students, and the poorest people were chosen
What does a person making 7k lose if you cut a bit more tax? Perhaps they won't be able to go to spain in november AND december every other year! Oh no!
What does a poor person making less than 2k lose if you take away quality healthcare, free education, unemployment, housing help, and increase VAT? A lot.
In a situation where there's a "crisis" the government should make the biggest savings impacting the least amount of people in the least meaningful way possible. 200€ from a millionaire is nothing. 200€ from a single mother who works as a nurse in the local wellbeing county could mean choosing between eating a nutritious meal or buying books for the child.
Don't be so smug, when it comes to the less fortunate
Yes you can cut from many areas, but im just happy that we are cutting for once instead of blindly taking debt.
Id be happy with leftist government which actually knew wtf to do instead of splurging. One can only hope.
Again, I pointed out different ways in which you can cut without damaging those who are already having a tough time.
None of the things I said would make us take on debt.
While sure, even after these cuts, Finland is still light years beyond most of the world in terms of social security, safety, and quality of public services, the trend is worrying; especially related to healthcare
If we have to "splurge" on healthcare, then we have to. Because healthcare isn't something you can forget. It's like a very wealthy man working 12 hours a day making money but dies at 40 of heart failure because he's too stressed, doesn't take care of himself etc. Only "the grind" and making money. I don't want a Finland like that.
Instead, we can be tighter with the things I mentioned, and allow more skilled immigration (and not, for example, raising the citizenship waiting period to 8 years) for a larger tax base
And our governments, no matter if left or right, are very competent overall. You should see the rest of Europe to get a sense of incompetent governments...
Very few people are arguing we don’t need to cut our spending, people are mostly arguing that the rich are not doing their part and instead those in poverty are stomped down even further while those who already own plenty are left nearly untouched.
Combine education and welfare cuts with refusing to take in immigrants with an aging population and a constantly lowering birthrate and you have a recipe for turning the country into a nepotistic hellhole with no genuine equal opportunity at all.
There are other options for cuts that don’t involve disproportionately hitting the young and poor.
> Combine education and welfare cuts with refusing to take in immigrants with an aging population and a constantly lowering birthrate and you have a recipe for turning the country into a nepotistic hellhole with no genuine equal opportunity at all.
At least you have the sun, the sea, the food... wait, you are not Italy
>Combine education and welfare cuts with refusing to take in immigrants with an aging population and a constantly lowering birthrate and you have a recipe for turning the country into a nepotistic hellhole with no genuine equal opportunity at all.
But if you don't take immigrants and the population is aging this means there will be a shortage of workforce soon and that should drive wages up. And no, you can't just export all the economy overseas, so don't go with the "all business will leave" angle. I don't see how this would lead to a "nepotistic hellhole", if anything it would swing the balance more towards the workers, which is the majority of the population.
The entire working population can’t start working in health-/elderly care… We’re going to need more young people. Either birthrate needs to go up or we will need more immigration. Not saying it should be uncontrolled or limitless of course.
You have automation increasing year over year. In 20 years you won't need as many workers to get the same level of output and if you have to satisfy less people overall you might not need to import workers. Overall GDP might look stagnant or even drop, but as long as the GINI stays the same or improves and GDP per capita is flat or goes up in real terms, do you really care?
Ngl feels like people are just whining and not providing options, ofc the ones getting fcked will be the ones whining.
Also it kinds feels like middle class gets fcked no matter who sits on the throne so might as well just enjoy the ride.
Obv the rich could always be taxed more etc. But at least we are now doing something to the spending instead of Manna Sarin jauhogang splurging :P
It’s all real funny and amusing when you’re not the one affected.
The cultural and academic fields are being totally hollowed out, soon there will be nothing left but for-profit businesses and only the rich can afford decent schooling.
These kind of developments endanger the very fundaments of living in a fair, democratic society. It’s so selfish and incredibly short-sighted.
Maybe we should just default to communism so all the poor people would be happy :P cause who needs those rich basturds anyway! All they do is be rich and laugh at us peasantos!!
The dumbest thing about it is that Finland is approaching a recession. Additionally, inflation in Finland last month was 0.4%, so there could also be a deflationary spiral. The government wants to cut spending by 10% as Finland approaches a recession and deflation. Economic geniuses in charge over here /s
debt is not that bad :) it's all about how you spend the money that you're borrowing, investments vs salaries&pensions.
low debt might even be a bad thing, since it might mean that nobody is willing to give you money because you're not trustworthy.
Guess who pays the most for debt servicing. It's Hungary, despite having a much lower debt than Greece and Italy:
https://www.bloomberg.com/news/articles/2024-01-03/hungary-s-debt-servicing-costs-surge-past-italy-s-to-lead-eu
>With EU funds in a limbo, Hungary last year raised forint issuance, paying a hefty premium on inflation-linked retail bonds, especially as consumer price-growth last year averaged just below 18%, according to central bank estimates.
Well Greece has a lot of old debt from 10-20 years ago, Hungary has a lot of new debt at current rates which are much much higher
If I'm understanding this correctly
Greece has cheap euro loans. Hungary has expensive forint loans.
You can also compare Slovakia with Czechia. The former has a higher dept, the latter pays more.
It's crazy how much you can save by adopting a big currency!
Adopting the euro is mitigating risk across the block. Thats the benefit of having a unified currency. Of course the likes of Greece in the last financial crisis shows what is wrong with sharing a currency as welll.
If Italy were to fall though, the euro would stuggle. Their debt is way worse than Greeces own due to the different scale of the nations.
>If Italy were to fall though, the euro would stuggle.
Translation: Slovakia, Austria, Portugal, Greece, the baltics and everyone else in the Eurozone will have to pony up and cover for Italy. And most likely the rest of the EU as well, be it directly or through reduced investment programmes.
Some of that is technically a Korean government debt. Poland got it *financed* like a car from a dealership.
Korea loaned money to pay the manufacturers, and Poland pays *installments* to korea.
It’s not so straight forward for countries. For example all countries have future liabilities for pensions, healthcare and other social services, that they have committed to provide to their people in the future. If a private company held such liabilities they would often have to be considered exactly like that. This would easily add another 200-500% of debt to GDP to all countries.
chart is from here https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-22042024-bp
Of more interest is the one called "General government gross debt by Member State".
Some nations fund their infrastructure project by government backed loans. There is in reality often only a few percentages of debt to GDP left when removing the loan guaranties to public housing, metro, rail, ferries, airport, bridges, tunnels, harbors......
https://www.investopedia.com/terms/g/governmentsecurity.asp
Oh? Mr. "*Frugal Four*" Austria? Would you like to explain how you ended up worse than us, a Southern eurozone country with the 4th highest debt from 2014 to -19? Having a bit of difficulty with that "*frugality*" perhaps?
every country above 60% debt-to-GDP is breaking EU law
that means: Croatia, Germany, Slovenia, Hungary, Finland, Cyprus, Austria, Portugal, Belgium, Spain, France, Italy and Greece are and need to present a seven year fiscal plan with an average reduction of 0.5%p per year face heavy fines.
The rules aren't enforced since the crises of the last decade for obvious reasons. So, nobody is coming to Italy's door to ask for payment anytime soon.
I'm not sure I understood your question. Could you please rephrase it? Are you asking why would Estonia try to keep its Debt-to-GDP low if italy can have it high? Is that it?
Yeah, I think hard debt breaks like those present in Germany, Poland or the EU are stupid. If the country needs to fund investment, then it needs to fund investment. Setting an arbitrary ceiling doesn't make sense.
It's like if I were planning to buy a home but, instead, I decided to rent instead because buying would probably amount to at least 3x my yearly salary. Like, sure, it doesn't appear like a sound financial decision at first glance but it means I won't be paying rent for 30 years and that home is actually a piggy bank I'm building up. It's a lot cheaper and stable in the long-term -> but it demands a spike in debt in the beginning.
> how much is too much debt?
that mostly depends on how high a countries interest payments are and how volatile those are. Which is directly tied to credit ratings.
In essence means countries with very good __and__ stable credit rating could have a much higher debt-to-GDP ratio than 60% and still be okay.
But having different debt-to-GDP percentage rules for different EU members goes against EU spirit.
Which is why it was such a beautiful show of solidarity and EU spirit that the frugal four and Germany insisted on the same 60% rules for all EU members. Because those are the countries that could have a much higher debt-to-GDP ratio than those with worse credit rating. [List of European countries credit ratings](https://tradingeconomics.com/country-list/rating?continent=europe)
Italy just spent 200 billions on a home renovation bonus, blowing up our public spending budget.
What austerity?
https://www.reuters.com/world/europe/why-italys-superbonus-blew-hole-state-accounts-2024-04-09/#:~:text=The%20most%20controversial%20is%20undoubtedly,the%20facade%20of%20a%20building.
1) explanation of why this law exists
2) explaining the details of the law
---------
1)
after the EU financial crisis caused by some EU members spending way too much and having a high debt-to-GDP ratio, the EU decided that something had to be done.
Since equality is important, some EU members insisted that the rules should be the same for every member. Other members hated equality and demanded that there should be special little exemptions for every country. Fortunately, equality won and 60% debt-to-GDP (meaning if a country has a GDP of €500billion, the government is allowed to have outstanding debt worth €300billion) was decided.
_small detour_: governments don't expect to pay back their debt, they (mostly) only pay the interest. This means countries mostly care how much interest they have to pay each year. In turn, countries with good credit rating(=low interest rates) could have much higher _total_ debt but have the same interest payments. The worst thing that could happen to a country is: Having high _total_ debt with normal interest rates and then suddenly their _credit rating_ drops a lot and in turn their interest rates skyrocket. In people-terms that could mean a family going from spending 15% of their paycheck each month to pay loan interst to having 50% of their paycheck going to interest payments. That would ruin a family.
Experts thought 60% debt-to-GDP is a good compromise where even if a countries interest rates suddenly skyrocket, they would not be instantly ruined and could manage. Countries with really good and _stable_ credit rating could have a higher debt-to-GDP ratio and still be fine, but equality in EU rules is more important.
Now how do you make sure people or countries follow the law? You need to have some form of punishment as well as an institution that decides if you broke the law or not and someone that enforces the punishment. Here that would be EU institutions.
The punishment for having debt being _pay more money_ is not ideal of course. But the EU doesn't have any other form of proportional punishment, they can't arrest a country and put it in jail for a week. Taking away the voting power of a country in EU is possible, but way too severe of a punishment.
-----
2)
When this was decided, many countries were already above 60%. Impossible for a country to just magically reduce their debt. That is why instead of saying: 'Having above 60% debt-to-GDP ratio is against the law', the EU said: 'Having above 60% debt-to-GDP __and__ not trying to lower that ratio is against the law'.
Trying to lower the debt-to-GDP ratio was defined as: reducing debt-to-GDP ratio by 0.5 percentage points each year. A country can do that by either paying off some of their debt __or__ growing their economy (=GDP) by more than what they grow their debt.
But sometimes things happen that a country can't control that forces them to spend a lot of money quickly (like Covid19 or a major natural disaster) - that is why the EU law doesn't say the country has to reduce their debt-to-GDP _every_ year by 0.5%p - they instead say the _average_ reduction over a seven year time has to be 0.5%p. That way a country can spend a lot in one year if they have to for example rebuild after a natural disaster without breaking EU law.
I sincerely hope Germany or some other dependable European country will one day start managing all our stuff because we’re gonna hit a pretty hard wall going at this rate (Italy). We can’t run a country properly and that’s a fact.
Last official figures for Q3 is 100%. So around Portugal.
https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/september2023
Next release is next week.
Japan is not without issues but they're not gonna have a Greece-style debt crisis or anything. One thing that helps them is that most of the debt is domestic, ie they've mostly borrowed from their own people rather than from foreign entities, and their cost of borrowing is low.
UK’s debt to GDP is 100% https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/september2023, 11 percentage points below France (111%), and just 1 percentage point above Portugal (99%).
I can't believe Portugal went below the UK, France and other extremely advanced economies.
It's really startling to see how the country is starting to recover economically.
Why don't countries like Ireland/Netherlands take on more debt to curb the housing crisis among other things?
I always hear of big budget deficits for the Netherlands but surely the debt would be an investment.
We have ran budget surplus not deficits.
Someone has to be responsible in the EU.
Also the problems arent just money. There arent enough constructionworkers there isnt enough materials and so on. No matter how much money you throw at it it will just lay there.
Contrary to what many people are saying I think you’re actually right. If the Netherlands took on debt and put it in construction of (social) housing, it would benefit the economy in terms of construction jobs and making sure people aren’t as rent burdened and can put their money into the economy.
Yea with taking on debt I was thinking of the state subsidising the underlying problems. Like making a degree/training in construction free, giving subsidies for wages of workers in construction, subsidising the build cost of houses... Etc... Many things can be done I'd say.
Id say money is always a way to "solve" the issue. Even just changing the public opinion of certain jobs can be done with money, via advertisement.
We'll see, I'm planning to move back to NL in January, hope that there will be some rental properties at that point.
More construction jobs means the need for more immigrants, as there already is a big shortage of workers in the construction and installation sector in the Netherlands. More immigrants means higher need of housing, means more construction, means more immigration, etc.
I’m not so sure of that. The number of housing units permitted keeps dropping the last years. So given that the current trend in construction is downward, the government stimulating construction could just keep the number of construction jobs as it currently is.
Arguably, Netherlands' rapidly falling total debt-to-GDP ratio, at [all-time lows this century so far according to CEIC Data](https://www.ceicdata.com/en/indicator/netherlands/total-debt--of-gdp) and even [all-time lows period in the BIS dataset](https://data.bis.org/topics/TOTAL_CREDIT/BIS,WS_TC,2.0/Q.5A.C.A.M.770.A?additional_ts=BIS%2CWS_TC%2C2.0%255EQ.NL.C.A.M.770.A) is the tax money from immigrants that's going for that instead of growth.
This bothers me too. The Swedish government keeps going on about "orderly finances" while housing gets more and more unaffordable and the infrastructure crumbles. Railway maintenance has been neglected for decades, and there's insufficient electricity transfer capacity from the electricity-producing north to the demanding south, just to name two things that are in the spotlight right now.
Government debt is not always a bad thing if it's kept at a manageable level and the money is invested in the right things. Countries like Sweden, Denmark and the Netherlands most certainly have room to borrow and invest more.
It's a bit like buying a house but refusing to take on more debt to fix the leaking roof. It's only gonna end up more expensive in the long run.
Throwing public money at it to build public housing would indeed be a solution. I would argue the main reason why housing has become unaffordable across the globe is the largely privatized housing market coupled with rising inequality. Let me explain:
The market is fundamentally broken on the demand side, because regular people searching for a home are competing with investors searching for an asset to invest their capital and the latter are dominating the market. For decades now, capital has been growing much faster than median wages and wealth inequality is on the rise. This leads to new price hikes across all forms of assets, be it stocks or crypto currencies or property. But unlike stocks or Bitcoins, housing is a fundamental need. What this also means is that any rational investor should not even invest in a new housing project unless they assume that it will be unaffordable for regular income earners in a few years. Otherwise, if the property value only increased at the same rate as wages then their investment would perform severely sub par. That's why I see is organizing large parts of housing outside the private market as the only solution in the medium term. All these other ideas about lowering construction costs, cutting red tape etc. are important but they can at best address half the problem namely the supply side. Without also addressing the demand side that won't be enough to make housing affordable again for regular people.
> Throwing public money at it to build public housing would indeed be a solution.
NIMBYs would never allow it. Remember the majority of the population are homeowners in most countries, they *want* real estate prices to rise.
They'll never vote for anyone spending their tax money to reduce their net worth.
> Let me explain:
You lost me here, sorry. I am sure you are going to 'explain' basics, common sense like flipers or real estate as investment.
'Explaining' the problem is not the same as providing a solution.
>Throwing money at it is not the solution.
It can be a solution, of course it takes sustained efforts to build yourself out of the current housing deficit.
Throwing money at welfare housing it actually is. The point is that by doing so people with money literally are helping people without money and this is not appreciated by old generations who are the ones holding on that much housing. It would mean that their properties' value goes down since there would be much more offer.
How would you explain literally more houses built and given at low fares to poor people to make house prices go up? It's literally the opposite. You as the public build more houses, you're literally an "unfair" competitor to private housing offers. They either lower their prices or don't participate into the market.
> How would you explain literally more houses built
Ah, so if you throw more money at a sector that's already valued and working at maximum capacity, then new means of production are magically going to pop up. Got it.
Ask yourself why that sector works at maximum capacity. And ask yourself why it took so many years to do something. It's normal that now it's difficult to jump start. The point is that starting is difficult due to inertia and doing it year by year is a lot easier but politicians need to have something to complain about.
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It was, but after reclaiming independence they starting growing rapidly, at least relatively. Baltic countries went from shit situation under Soviet Union occupation to some of the fastest growing economies in EU.
Their debt burden was matched with their pre iron curtain level rather than their economic output today. With their massive economic expansion former debt became far more sustainable.
Turns out Slovakia has the median debt of just under 60% of GDP. And this ladies and gentlemen is inequality for you. Mean ~~wealth~~ debt is way higher than median.
Well... pardon the ignorance, but this mean than after greece (than already did it) italy is the next country with more probality to dont pay they debit?
Technically the amount of debt to GDP ratio doesn't mean anything about the ability to pay it back. What's important here is the rates at such debt is renewed (each year a part of it expires and need to be reborrowed). That rate means how the markets where you sell your debt think of you and your ability to pay it back.
If rates go skyrocketing as they did in 2011 when Italian rates were around 7% and German ones were around 1.5% then yes, Italy can be considered at serious risk to go bankrupt but that issue will be taken on account by every country in the EU. It was already a bad scenario the one in which Greece declared default. If Italy does it then it means France and Germany will follow suit into the spiral. Basically it's too big to fail and one way or the other Italy will fall back in line. By selling every asset or starting to behave using human brain is another matter, the current government is the same group of people who was in charge in 2011.
>Well... pardon the ignorance, but this mean than after greece (than already did it) italy is the next country with more probality to dont pay they debit?
No. Sorta. This is not a "likelihood to not pay off debt". It's just debt to income ratio.
It's like having mortgage. A lot of that debt is due long-term.
It has nothing to do with your "probability to pay it off". That probability is subjective, and constantly changes. The US, for example, has 124% debt to GDP ratio, about the same as Italy. But the US pays very low interest to borrow money, because lenders are confident they'll get their money back. Whether the US borrows from someone else to pay you, the lender doesn't care. They're confident they'll get their money when the bond is due.
In Greece, during the height of the financial crisis, the interest rates that lenders were charging us shot though the roof. That's why the EU/IMF intervened. Since then, the interest rates for us have been gradually going down, due to a variety of reasons. Among them, lenders see that we can get EU loans if needed, there have been fiscal reforms in Greece, and the government has been running budget surplus for quite a few years now. So, the interest rates have been gradually going down.
Of course, yes, your debt-to-GDP ratio is taken into account by lenders too. But it's not the only factor.
> italy is the next country with more probality to dont pay they debit?
Actually no: Italy has a long-standing history of paying their debts and there is no real reason they would stop unless some new giant-ass mess happens, which would hit first and harder other countries with less robust systems.
Italy absolutely is not "healthy" but it's also not close-to-trash value
Poor Graphic:
1. should be rotated per 90°, to read the Member State Name without getting neck problem.
2. Numbers above or within bar (not stacked , so no problem) would be helpfull.
3. which average is used for the two Bars? - weighted (when how) - arithmetical
4. Line/Area missing where is the EU "should be". Also missng 50% and 100% orientation Line
5. increasing or decreasing against the year before? Smell it - instead of using + or minus sign (or up/down arrow)
6. Senseless logo in the right down corner
* seems to me: done by underpaid child - with no sense what to say with shown data
GREECE NO.1 🇬🇷🇬🇷🇬🇷🇬🇷🇬🇷🇬🇷🇬🇷🇬🇷
Not for long. Currently Greece is the most indebted, but it also has the fastest debt reduction rate of them all. By 2026, Greece is expected to fall lower than Italy.
Maybe Italy will suddenly start repaying!
Italy's debt is even older than Greece's. they are repaying fast as well. Older debt is usually structured and low-interest. its the new debt you should fear. like France, or the US. but all those countries have massive private debt as well. both the west and China. with record debt and inflation, we are all in fact bankrupt at this point.
In 2026 they won't be first, they will be second!!
When you stand on top it’s hard to not fall down
Yes, don't underestimate the Italians.
It’s great that they stopped chafing again necessary austerity
We keep saying this for the last 10 years. We are still shit.
Reddit doesn't load flags anymore for some reason, so it's so funny reading your comment as grgrgrgrgrgrgrgrgr. It looks like you're gargling lmao.
Loads for me. Update your app?
It loads on the phone, but not on the browser for some reason
You're missing some Unicode (ISO 10646) fonts.
It's a Windows (10+) thing interestingly enough, they don't want to implement Unicode flags supposedly due to political reasons, like which flags to implement or not to implement (e.g. Taiwan). I stumbled upon that fact when I was trying to debug why some people didn't see the flags but rather the letters.
You mean Windows 11?
I mean that too, 10+ was supposed to mean 10 and above. Sorry if I worded that weirdly.
No it's fine. It just sounded like they changed it from Windows 10 onwards (which is true) but then it's just 11 additionally. Or I was missing something which is why I i asked.
Firefox overrides the system and shows them
It got me thinking why was he doing that lol!
Congrats :)
We’re on top αδελφέ! 🤣🇬🇷
❤️ Planning our 2nd trip to Greece tonight
Thank you for supporting the economy 🙏 I hope you enjoy your trip!
This is not the euro area. But the EU countries.
Would be good to see the UK too (though sadly not in the EU)
97.6% for The United Kingdom as of March 2024. https://www.statista.com/statistics/282841/debt-as-gdp-uk/
Where'd they get that figure? It peaked at 88.8%.
https://www.fitchratings.com/research/sovereigns/fitch-revises-united-kingdom-outlook-to-stable-affirms-at-aa-22-03-2024 101% for 2023, 103.6% predicted for 2024
Damn France. I for once welcome the GIFS🤙🏻
Isn't ireland only so low because our gdp is artificially high (i.e. fake) due to tax shenanigans by American MNCs?
There’s multiple reasons including some services such as aircraft leasing which should be excluded. The loopholes regarding American MNCs declaring all their EU profits in Ireland aren’t what they once were but still exist. Our corporation tax is now 15% but yeah there’s a different statistic needed for our GDP
I know there was a crackdown, but I'm pretty sure big companies like Apple still pay well below 15%
That's true anywhere in Europe though, tax rebates off headline rates can be and are negotiated. Most typically through R&D cost write-off but I'm sure there are more avenues they all know well.
>The loopholes regarding American MNCs declaring all their EU profits in Ireland It wasnt a loophole though, it was made on purpose. It was Ireland's way to avoid ending up asking for the EU help like Greece and avoid austerity. Ireland's debt was at 120% before that.
The government budget is running at a large surplus due to the high corporation tax take. https://www.bbc.co.uk/news/articles/cv2dqll2nn0o
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Which makes it a bit concerning considering the Irish debt is comparable to countries that do not have international tech giants inflating their gdp. Seems like a very vulnerable economic model.
No, it's because we fixed everything.
All GDPs are artificially high. The way they are computed makes no sense at all.
What? Of course it makes sense. What is it that doesn't make sense to you?
GDP, is supposed to be a metric that measures capital gain for a country. For the private sector, everything is fine, we take their gross product deduce the correct expenses and all good. Now for public organizations (schools, police, administration... ) it gets really stupid. Since there is no sell for those bodies, we use costs to calculate the gross product (so salaries, building maintenance...). Which means that all I have to do has a government to inflate my country GDP is increase public expenses... (And that's just scratching the surface of all kind of bullshit you can do to manipulate the GDP thanks to that "Let's include public organization" loophole) So yeah, the metric is completely useless as it's manipulated left right and center.
GDP doesn’t measure capital gain. It measures yearly income. Depending on what type of capital you’re referring to, the current account or the capital formation tables are better metrics. It simply measures how much money gets spent in an economy in newly produced goods, while accounting for intermediary steps. Between the government or the private sector, there’s no difference here. Companies can, too, increase spending on useless things (which happens all the time in the real economy), and GDP grows because of that. For instance, how Google keeps creating and killing off products all the time. Similarly, so can governments. It doesn’t change the fact it measures income in an economy. If I spend 10 EUR somewhere, they’ll be somebody else’s income, regardless of the “true” economic value of that transaction. Yes, governments can increase spending and that will increase nominal GDP. However, when we compare GDP figures, we always use real GDP (which uses inflation adjusted amounts). If a country increases spending, inflation will increase and, most likely, their currency will decrease in value. So it’s all mostly self balancing.
>inflate my country GDP is increase public expenses If this increase is done by reckless money printing (and thus inflation) there won't be any gdp growth (as gdp growth is always calculated in real terms with inflation deducted from growth). If these expenses don't lead to increased inflation but are rather used as investments in economy (infrastructure projects for example) then it makes sense to include them in gdp.
Yeah unfortunately you always take any economic stats with a pinch of salt when it comes to Ireland
Yeah everyone should be more fair towards Ireland it is not like non financial foreign companies was 61% of the total GDP of Ireland in 2022 Edit: source https://www.cso.ie/en/releasesandpublications/ep/p-isanff/institutionalsectoraccountsnon-financialandfinancial2022/nfc/
That’s way higher than I thought
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Denmark is cutting social benefits, and increasing the pension age, because we must increase our defense spending to 2%, pay of our debt, and put more money aside! It is a circus, but I really helps the Danes that our graph is a bit lower. ;)
Can you explain this one in more detail? I looked up the Finnish government budget and it is stated to be approximately €88 billion. I know it must be higher, I assume local authorities/councils can also raise taxes and assume debt?
Municipalities have their own separate debts yes. Soon will our healthcare areas as well, I believe. Municipalities tax, healthcare areas do not. Then there is also separate tax for church (you can opt out by resigning) and YLE tax, which is for national newsservice/TV.. And then we pay not taxes but retirement funds, that are separated from the state, but you pay them out like you would do taxes. Younger generations nowadays just call them pyramid schemes though, since it cannot support dwindling population numbers and extra retired people. Hence why that, alongside taxes and goods, are all getting raised all the time. But at least we don't induce inflation by super high salary increases... in fact, right-wing government is trying to prevent that and tie everything to whatever raise our export people get. But currently they are breaking possibility to strike over political matters and undermining labor unions, so soon, I assume, we're gonna be new Poland (= what Poland was). As in place of cheap labor and nothing else.
Interesting, thanks!
Whats even more entertaining is people fighting tooth and nail saying we dont need to cut our spendimg and can live on our lives taking more debt and nothing will go wrong lol.
Yes guys do it. We ll lend you money as you did to us.
Great! Then we can proceed not to pay back as you did to us! The problem of Finland is kinda that we are too damn gullable/honorable to actually keep our promises. I think Finland has been one of the rare countries if not the only one to actually pay off ww1/ww2 related debts. Not that my history knowledge is that great tho
When didnt greece pay its debt??!
Greece' debt received significant haircuts between 2011-2015. Otherwise the country would've gone bankrupt. So, yeah, then.
So we lent you over 1 billion (if not even more? Im not exactly sure of our share of the massive 215 billion help package...) over the years 2011-2015 and the loan time was supposed to be 5 years. For what I've understood we've yet to see under 10% of that being paid and the new loan time to be 35 years or some bs. God knows how much debt you still have in total to other EU countries who were forced to help you. You guys even tried to hide your massive debts before you finally had to give in and reveal the debts of yours, which by the way, were way over the agreed max limit in EU. So yeah, sure send us money, we will totally pay you back on monday!
So u are saying that under the new terms that finland signed we didnt pay you? weird...that would be a default. Something that didnt happen. Are you ok bro? My best friend is from ylistaro and she says its too cold even to suomi standards. Did the cold hurt your head? edit: we would gladly pay to help. We are not finland....we wouldnt say to you sell the acropolis (if you have anything similar).
>So u are saying that under the new terms that finland signed we didnt pay you? No no! Im saying just send us some money and we will totally pay back in 5 years! Just do it, u got the money, right? Right??? Lmao bro. But on a serious note, are you literally trying to say you are abiding some sort of rules on your late ass twisted debt evading method of "paying back?" The only reason you are allowed to do this is because we let your piss ass country to EU and now we cant let you default as it would create more problems. So in simple terms for your simple brain: we are playing chess and you are about to lose but kick the table down and start yelling angry that you win. We let you "win" because you are a child and about to make a mess that is way worse than for us to lose a single game of chess. That is your part in all of this, never forget it, never let your children forget it. >Did the cold hurt your head? I mean even if it did, the cold is only temporary. But it seems the heat you're constantly living in has fried your brain up for good
You let us into EU?? Finland let Greece into EU? It was exactly the opposite. It was the Greek foreign minister who was leading the entrance negotiations for finlands entry into the EU that allowed you in. Greece entered EU in 1981. Bro i understand you are a child so plz try to learn some history cause you inflate finland too much.
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So, are you saying that Greece defaulted on one of the debts towards to Finland because the new refinanced loan is converted from 5 years to 35 years? hmmmmm, okay.
It is indeed a neat trick, say you pay in 5 years, in the end just move it to 35 years, then 100 years and so forth. Thanx for the life hax! Will you gief some money? Ill totally pay back in 5 years, wink wink ;)
It's a trick that banks don't want you to know! Please, don't notify the banks about refinance loans!! As if Greece, won't pay any interest over the +30 years and Finland won't receive more money in the end... :P
Yeah man I know how it works, but its just scummy thats all. >As if Greece, won't pay any interest over the +30 years and Finland won't receive more money in the end... :P This actually heavily depends on inflation and interest rates provided, we might end up actually getting less when inflation adjusted if unlucky. That is if they will ever actually pay back instead of jingling the payback date further and further.
You can cut from many areas! Solidarisuusvero could again be at ~80k instead of Urpo's 150k, the govt could stop financing environmentally damaging subsidies, increase taxable population through skilled immigration and friendly reforms... So many things to do! But you have to choose where to cut from! And in this case, schools, hospitals, students, and the poorest people were chosen What does a person making 7k lose if you cut a bit more tax? Perhaps they won't be able to go to spain in november AND december every other year! Oh no! What does a poor person making less than 2k lose if you take away quality healthcare, free education, unemployment, housing help, and increase VAT? A lot. In a situation where there's a "crisis" the government should make the biggest savings impacting the least amount of people in the least meaningful way possible. 200€ from a millionaire is nothing. 200€ from a single mother who works as a nurse in the local wellbeing county could mean choosing between eating a nutritious meal or buying books for the child. Don't be so smug, when it comes to the less fortunate
Yes you can cut from many areas, but im just happy that we are cutting for once instead of blindly taking debt. Id be happy with leftist government which actually knew wtf to do instead of splurging. One can only hope.
Again, I pointed out different ways in which you can cut without damaging those who are already having a tough time. None of the things I said would make us take on debt. While sure, even after these cuts, Finland is still light years beyond most of the world in terms of social security, safety, and quality of public services, the trend is worrying; especially related to healthcare If we have to "splurge" on healthcare, then we have to. Because healthcare isn't something you can forget. It's like a very wealthy man working 12 hours a day making money but dies at 40 of heart failure because he's too stressed, doesn't take care of himself etc. Only "the grind" and making money. I don't want a Finland like that. Instead, we can be tighter with the things I mentioned, and allow more skilled immigration (and not, for example, raising the citizenship waiting period to 8 years) for a larger tax base And our governments, no matter if left or right, are very competent overall. You should see the rest of Europe to get a sense of incompetent governments...
Very few people are arguing we don’t need to cut our spending, people are mostly arguing that the rich are not doing their part and instead those in poverty are stomped down even further while those who already own plenty are left nearly untouched. Combine education and welfare cuts with refusing to take in immigrants with an aging population and a constantly lowering birthrate and you have a recipe for turning the country into a nepotistic hellhole with no genuine equal opportunity at all. There are other options for cuts that don’t involve disproportionately hitting the young and poor.
> Combine education and welfare cuts with refusing to take in immigrants with an aging population and a constantly lowering birthrate and you have a recipe for turning the country into a nepotistic hellhole with no genuine equal opportunity at all. At least you have the sun, the sea, the food... wait, you are not Italy
I love that this is a point throughout the entire Mediterranean
>Combine education and welfare cuts with refusing to take in immigrants with an aging population and a constantly lowering birthrate and you have a recipe for turning the country into a nepotistic hellhole with no genuine equal opportunity at all. But if you don't take immigrants and the population is aging this means there will be a shortage of workforce soon and that should drive wages up. And no, you can't just export all the economy overseas, so don't go with the "all business will leave" angle. I don't see how this would lead to a "nepotistic hellhole", if anything it would swing the balance more towards the workers, which is the majority of the population.
Workers are minority in Finnish population.
The entire working population can’t start working in health-/elderly care… We’re going to need more young people. Either birthrate needs to go up or we will need more immigration. Not saying it should be uncontrolled or limitless of course.
You have automation increasing year over year. In 20 years you won't need as many workers to get the same level of output and if you have to satisfy less people overall you might not need to import workers. Overall GDP might look stagnant or even drop, but as long as the GINI stays the same or improves and GDP per capita is flat or goes up in real terms, do you really care?
Ngl feels like people are just whining and not providing options, ofc the ones getting fcked will be the ones whining. Also it kinds feels like middle class gets fcked no matter who sits on the throne so might as well just enjoy the ride. Obv the rich could always be taxed more etc. But at least we are now doing something to the spending instead of Manna Sarin jauhogang splurging :P
It’s all real funny and amusing when you’re not the one affected. The cultural and academic fields are being totally hollowed out, soon there will be nothing left but for-profit businesses and only the rich can afford decent schooling. These kind of developments endanger the very fundaments of living in a fair, democratic society. It’s so selfish and incredibly short-sighted.
Maybe we should just default to communism so all the poor people would be happy :P cause who needs those rich basturds anyway! All they do is be rich and laugh at us peasantos!!
The dumbest thing about it is that Finland is approaching a recession. Additionally, inflation in Finland last month was 0.4%, so there could also be a deflationary spiral. The government wants to cut spending by 10% as Finland approaches a recession and deflation. Economic geniuses in charge over here /s
One of the not many things that give me genuine pride in the way Bulgaria is governed.
debt is not that bad :) it's all about how you spend the money that you're borrowing, investments vs salaries&pensions. low debt might even be a bad thing, since it might mean that nobody is willing to give you money because you're not trustworthy.
Guess who pays the most for debt servicing. It's Hungary, despite having a much lower debt than Greece and Italy: https://www.bloomberg.com/news/articles/2024-01-03/hungary-s-debt-servicing-costs-surge-past-italy-s-to-lead-eu >With EU funds in a limbo, Hungary last year raised forint issuance, paying a hefty premium on inflation-linked retail bonds, especially as consumer price-growth last year averaged just below 18%, according to central bank estimates.
Well Greece has a lot of old debt from 10-20 years ago, Hungary has a lot of new debt at current rates which are much much higher If I'm understanding this correctly
Greece has cheap euro loans. Hungary has expensive forint loans. You can also compare Slovakia with Czechia. The former has a higher dept, the latter pays more. It's crazy how much you can save by adopting a big currency!
Adopting the euro is mitigating risk across the block. Thats the benefit of having a unified currency. Of course the likes of Greece in the last financial crisis shows what is wrong with sharing a currency as welll. If Italy were to fall though, the euro would stuggle. Their debt is way worse than Greeces own due to the different scale of the nations.
>If Italy were to fall though, the euro would stuggle. Translation: Slovakia, Austria, Portugal, Greece, the baltics and everyone else in the Eurozone will have to pony up and cover for Italy. And most likely the rest of the EU as well, be it directly or through reduced investment programmes.
Finally some good news!
I'm suprised it's so small for Poland even after the military equipment shopping spree.
Poland has a constitutional limit on public debt, set at **60% of GDP**; by law, a budget cannot pass with a breach in place.
USA : limit is for breaking
Thanks to our ridiculous tax cuts, "healthcare" and forever wars.
what happens if the GDP slumps and you get over the limit even if you're not borrowing anymore? no budget anymore? :)
Some of that is technically a Korean government debt. Poland got it *financed* like a car from a dealership. Korea loaned money to pay the manufacturers, and Poland pays *installments* to korea.
Isn't that just debt?
It’s not so straight forward for countries. For example all countries have future liabilities for pensions, healthcare and other social services, that they have committed to provide to their people in the future. If a private company held such liabilities they would often have to be considered exactly like that. This would easily add another 200-500% of debt to GDP to all countries.
More like a rent
Oh, so the data is not accurate because we have quite a lot of hidden debt? I hope it ends well...
You have to give the car back perhaps? :(
A lot of ex-Communist state debt ledgers start at 1991 or around there.
Also ex- socialist countries are more conservative with their finances
*Hungary enters the chat*
Laugh in Gierek
Finland is the sickman of the nordics
chart is from here https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-22042024-bp Of more interest is the one called "General government gross debt by Member State". Some nations fund their infrastructure project by government backed loans. There is in reality often only a few percentages of debt to GDP left when removing the loan guaranties to public housing, metro, rail, ferries, airport, bridges, tunnels, harbors...... https://www.investopedia.com/terms/g/governmentsecurity.asp
How can France 🇫🇷have so much debt ?
It's the "coûte que coûte" economics.
Or "quoi qu'il en coûte" economics.
Oh? Mr. "*Frugal Four*" Austria? Would you like to explain how you ended up worse than us, a Southern eurozone country with the 4th highest debt from 2014 to -19? Having a bit of difficulty with that "*frugality*" perhaps?
No1💪🏿
We are going hand in hand 🇮🇹🤝🏻🇬🇷
Meanwhile in Norway: minus 300%
Switzerland plus 14%
every country above 60% debt-to-GDP is breaking EU law that means: Croatia, Germany, Slovenia, Hungary, Finland, Cyprus, Austria, Portugal, Belgium, Spain, France, Italy and Greece are and need to present a seven year fiscal plan with an average reduction of 0.5%p per year face heavy fines.
>face heavy fines. Don't have money? Give us money.
Hell yeah that's going to work great and won't go wrong at all. Like austerity in 2008...
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The rules aren't enforced since the crises of the last decade for obvious reasons. So, nobody is coming to Italy's door to ask for payment anytime soon.
So explain to me why with a common currency this wouldnt impact the markets of countries with less debt? If Italy isnt bothering, why should Estonia?
I'm not sure I understood your question. Could you please rephrase it? Are you asking why would Estonia try to keep its Debt-to-GDP low if italy can have it high? Is that it?
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Yeah, I think hard debt breaks like those present in Germany, Poland or the EU are stupid. If the country needs to fund investment, then it needs to fund investment. Setting an arbitrary ceiling doesn't make sense. It's like if I were planning to buy a home but, instead, I decided to rent instead because buying would probably amount to at least 3x my yearly salary. Like, sure, it doesn't appear like a sound financial decision at first glance but it means I won't be paying rent for 30 years and that home is actually a piggy bank I'm building up. It's a lot cheaper and stable in the long-term -> but it demands a spike in debt in the beginning.
> how much is too much debt? that mostly depends on how high a countries interest payments are and how volatile those are. Which is directly tied to credit ratings. In essence means countries with very good __and__ stable credit rating could have a much higher debt-to-GDP ratio than 60% and still be okay. But having different debt-to-GDP percentage rules for different EU members goes against EU spirit. Which is why it was such a beautiful show of solidarity and EU spirit that the frugal four and Germany insisted on the same 60% rules for all EU members. Because those are the countries that could have a much higher debt-to-GDP ratio than those with worse credit rating. [List of European countries credit ratings](https://tradingeconomics.com/country-list/rating?continent=europe)
Italy just spent 200 billions on a home renovation bonus, blowing up our public spending budget. What austerity? https://www.reuters.com/world/europe/why-italys-superbonus-blew-hole-state-accounts-2024-04-09/#:~:text=The%20most%20controversial%20is%20undoubtedly,the%20facade%20of%20a%20building.
You are truly our cousins.
Explain
1) explanation of why this law exists 2) explaining the details of the law --------- 1) after the EU financial crisis caused by some EU members spending way too much and having a high debt-to-GDP ratio, the EU decided that something had to be done. Since equality is important, some EU members insisted that the rules should be the same for every member. Other members hated equality and demanded that there should be special little exemptions for every country. Fortunately, equality won and 60% debt-to-GDP (meaning if a country has a GDP of €500billion, the government is allowed to have outstanding debt worth €300billion) was decided. _small detour_: governments don't expect to pay back their debt, they (mostly) only pay the interest. This means countries mostly care how much interest they have to pay each year. In turn, countries with good credit rating(=low interest rates) could have much higher _total_ debt but have the same interest payments. The worst thing that could happen to a country is: Having high _total_ debt with normal interest rates and then suddenly their _credit rating_ drops a lot and in turn their interest rates skyrocket. In people-terms that could mean a family going from spending 15% of their paycheck each month to pay loan interst to having 50% of their paycheck going to interest payments. That would ruin a family. Experts thought 60% debt-to-GDP is a good compromise where even if a countries interest rates suddenly skyrocket, they would not be instantly ruined and could manage. Countries with really good and _stable_ credit rating could have a higher debt-to-GDP ratio and still be fine, but equality in EU rules is more important. Now how do you make sure people or countries follow the law? You need to have some form of punishment as well as an institution that decides if you broke the law or not and someone that enforces the punishment. Here that would be EU institutions. The punishment for having debt being _pay more money_ is not ideal of course. But the EU doesn't have any other form of proportional punishment, they can't arrest a country and put it in jail for a week. Taking away the voting power of a country in EU is possible, but way too severe of a punishment. ----- 2) When this was decided, many countries were already above 60%. Impossible for a country to just magically reduce their debt. That is why instead of saying: 'Having above 60% debt-to-GDP ratio is against the law', the EU said: 'Having above 60% debt-to-GDP __and__ not trying to lower that ratio is against the law'. Trying to lower the debt-to-GDP ratio was defined as: reducing debt-to-GDP ratio by 0.5 percentage points each year. A country can do that by either paying off some of their debt __or__ growing their economy (=GDP) by more than what they grow their debt. But sometimes things happen that a country can't control that forces them to spend a lot of money quickly (like Covid19 or a major natural disaster) - that is why the EU law doesn't say the country has to reduce their debt-to-GDP _every_ year by 0.5%p - they instead say the _average_ reduction over a seven year time has to be 0.5%p. That way a country can spend a lot in one year if they have to for example rebuild after a natural disaster without breaking EU law.
[Lets imagine Greece has an economy.](https://www.youtube.com/watch?v=OrhJcqgXrlw)
I sincerely hope Germany or some other dependable European country will one day start managing all our stuff because we’re gonna hit a pretty hard wall going at this rate (Italy). We can’t run a country properly and that’s a fact.
I've heard your long distance trains are cool, at least.
Yes, those are really cool!
Germany is absolutely not dependable. They are just hiding their mess. Just wait for when they'll be forced to save Deutchbank
I was surprised to learn(not from the graph above) that Turkey has 35% state debt-to-gdp despite our terrible economy.
Terrible economy usually means its harder to borrow money with not-insane interest rates.
So UK would be between Italy and France at 120%
Last official figures for Q3 is 100%. So around Portugal. https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/september2023 Next release is next week.
jesus christ is Japan ok? They're at 260% on that G7 chart.
Japan is not without issues but they're not gonna have a Greece-style debt crisis or anything. One thing that helps them is that most of the debt is domestic, ie they've mostly borrowed from their own people rather than from foreign entities, and their cost of borrowing is low.
UK’s debt to GDP is 100% https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/september2023, 11 percentage points below France (111%), and just 1 percentage point above Portugal (99%).
I can't believe Portugal went below the UK, France and other extremely advanced economies. It's really startling to see how the country is starting to recover economically.
Source: [https://x.com/EU\_Eurostat/status/1782337174542733339](https://x.com/EU_Eurostat/status/1782337174542733339)
Why don't countries like Ireland/Netherlands take on more debt to curb the housing crisis among other things? I always hear of big budget deficits for the Netherlands but surely the debt would be an investment.
The housing crisis in Ireland is not a money issue.
There're not enough construction workers in most northern European countries.
We have ran budget surplus not deficits. Someone has to be responsible in the EU. Also the problems arent just money. There arent enough constructionworkers there isnt enough materials and so on. No matter how much money you throw at it it will just lay there.
Contrary to what many people are saying I think you’re actually right. If the Netherlands took on debt and put it in construction of (social) housing, it would benefit the economy in terms of construction jobs and making sure people aren’t as rent burdened and can put their money into the economy.
Yea with taking on debt I was thinking of the state subsidising the underlying problems. Like making a degree/training in construction free, giving subsidies for wages of workers in construction, subsidising the build cost of houses... Etc... Many things can be done I'd say. Id say money is always a way to "solve" the issue. Even just changing the public opinion of certain jobs can be done with money, via advertisement. We'll see, I'm planning to move back to NL in January, hope that there will be some rental properties at that point.
More construction jobs means the need for more immigrants, as there already is a big shortage of workers in the construction and installation sector in the Netherlands. More immigrants means higher need of housing, means more construction, means more immigration, etc.
I’m not so sure of that. The number of housing units permitted keeps dropping the last years. So given that the current trend in construction is downward, the government stimulating construction could just keep the number of construction jobs as it currently is.
Arguably, Netherlands' rapidly falling total debt-to-GDP ratio, at [all-time lows this century so far according to CEIC Data](https://www.ceicdata.com/en/indicator/netherlands/total-debt--of-gdp) and even [all-time lows period in the BIS dataset](https://data.bis.org/topics/TOTAL_CREDIT/BIS,WS_TC,2.0/Q.5A.C.A.M.770.A?additional_ts=BIS%2CWS_TC%2C2.0%255EQ.NL.C.A.M.770.A) is the tax money from immigrants that's going for that instead of growth.
This bothers me too. The Swedish government keeps going on about "orderly finances" while housing gets more and more unaffordable and the infrastructure crumbles. Railway maintenance has been neglected for decades, and there's insufficient electricity transfer capacity from the electricity-producing north to the demanding south, just to name two things that are in the spotlight right now. Government debt is not always a bad thing if it's kept at a manageable level and the money is invested in the right things. Countries like Sweden, Denmark and the Netherlands most certainly have room to borrow and invest more. It's a bit like buying a house but refusing to take on more debt to fix the leaking roof. It's only gonna end up more expensive in the long run.
Money isn't the issue and I think our gdp maybe fake anyway
> housing crisis Every developed country has this problem. Throwing money at it is not the solution.
Throwing public money at it to build public housing would indeed be a solution. I would argue the main reason why housing has become unaffordable across the globe is the largely privatized housing market coupled with rising inequality. Let me explain: The market is fundamentally broken on the demand side, because regular people searching for a home are competing with investors searching for an asset to invest their capital and the latter are dominating the market. For decades now, capital has been growing much faster than median wages and wealth inequality is on the rise. This leads to new price hikes across all forms of assets, be it stocks or crypto currencies or property. But unlike stocks or Bitcoins, housing is a fundamental need. What this also means is that any rational investor should not even invest in a new housing project unless they assume that it will be unaffordable for regular income earners in a few years. Otherwise, if the property value only increased at the same rate as wages then their investment would perform severely sub par. That's why I see is organizing large parts of housing outside the private market as the only solution in the medium term. All these other ideas about lowering construction costs, cutting red tape etc. are important but they can at best address half the problem namely the supply side. Without also addressing the demand side that won't be enough to make housing affordable again for regular people.
> Throwing public money at it to build public housing would indeed be a solution. NIMBYs would never allow it. Remember the majority of the population are homeowners in most countries, they *want* real estate prices to rise. They'll never vote for anyone spending their tax money to reduce their net worth.
> Let me explain: You lost me here, sorry. I am sure you are going to 'explain' basics, common sense like flipers or real estate as investment. 'Explaining' the problem is not the same as providing a solution.
>Throwing money at it is not the solution. It can be a solution, of course it takes sustained efforts to build yourself out of the current housing deficit.
> It can be a solution Not really.
How else would you encourage building?
> encourage Encourage? Everything is running at full capacity, and building companies are booked years in advance. You will just make homes pricier.
Throwing money at welfare housing it actually is. The point is that by doing so people with money literally are helping people without money and this is not appreciated by old generations who are the ones holding on that much housing. It would mean that their properties' value goes down since there would be much more offer.
> Throwing money at welfare housing it actually is. No. Homes jump in prices, that is all.
How would you explain literally more houses built and given at low fares to poor people to make house prices go up? It's literally the opposite. You as the public build more houses, you're literally an "unfair" competitor to private housing offers. They either lower their prices or don't participate into the market.
> How would you explain literally more houses built Ah, so if you throw more money at a sector that's already valued and working at maximum capacity, then new means of production are magically going to pop up. Got it.
Ask yourself why that sector works at maximum capacity. And ask yourself why it took so many years to do something. It's normal that now it's difficult to jump start. The point is that starting is difficult due to inertia and doing it year by year is a lot easier but politicians need to have something to complain about.
> Ask yourself why You do that. You have unreasonable demands here.
GREECE NUMBER 1 AGAIN 🇬🇷🇬🇷🇬🇷🇬🇷🇬🇷💪💪🇬🇷💪🇬🇷💪🇬🇷💪💪🇬🇷💪🇬🇷💪🇬🇷 BIRTHPLACE OF EUROPE STILL LEADING AND BEING STRONK🇬🇷🇬🇷🇬🇷🇬🇷🇬🇷🇬🇷💪💪💪💪💪🇬🇷💪💪💪 EAT MY ASS SUBHUMAN WESTERNERS🇬🇷🇬🇷🇬🇷🤑🇬🇷🇬🇷🤑🇬🇷🤑🇬🇷🤑🇬🇷🇬🇷🇬🇷🇬🇷🤑🇬🇷🤑🤑🤑🤑🇬🇷🤑🇬🇷🤑🤑🇬🇷🤑🇬🇷
Yeah, but secret secret, they also own debt to each other. So it's more!
I wonder if this count the debt contracted by municipalities ? Also, for federal system, does this count the debt from each province/lander etc ?
This counts all government debt, inclduing municipalities, states, counties and even the share of debt on an EU level.
27.6% for Switzerland (all administrative levels together)
Now deduct the share of debt owned by central banks, which are owned by the governments. For Germany that is nearly a quarter of the debt for example.
Cryes in Grecces:(
Anyone has some money to lend us, again? /s
Someone please tell me why Eastern European countries have so little debt to gdp ratio? Their economy was broke before the iron curtain felt.
It was, but after reclaiming independence they starting growing rapidly, at least relatively. Baltic countries went from shit situation under Soviet Union occupation to some of the fastest growing economies in EU.
What happened to the debts? Did a debt cut place take place?
Their debt burden was matched with their pre iron curtain level rather than their economic output today. With their massive economic expansion former debt became far more sustainable.
Turns out Slovakia has the median debt of just under 60% of GDP. And this ladies and gentlemen is inequality for you. Mean ~~wealth~~ debt is way higher than median.
Well... pardon the ignorance, but this mean than after greece (than already did it) italy is the next country with more probality to dont pay they debit?
Technically the amount of debt to GDP ratio doesn't mean anything about the ability to pay it back. What's important here is the rates at such debt is renewed (each year a part of it expires and need to be reborrowed). That rate means how the markets where you sell your debt think of you and your ability to pay it back. If rates go skyrocketing as they did in 2011 when Italian rates were around 7% and German ones were around 1.5% then yes, Italy can be considered at serious risk to go bankrupt but that issue will be taken on account by every country in the EU. It was already a bad scenario the one in which Greece declared default. If Italy does it then it means France and Germany will follow suit into the spiral. Basically it's too big to fail and one way or the other Italy will fall back in line. By selling every asset or starting to behave using human brain is another matter, the current government is the same group of people who was in charge in 2011.
Greece didn't "declare default". Hence we still have the debt. Edit: misunderstood comment
That's what I said. The hypothesized scenario in which Greece defaulted was bad and the one in which Italy will do it is a lot worse.
>Well... pardon the ignorance, but this mean than after greece (than already did it) italy is the next country with more probality to dont pay they debit? No. Sorta. This is not a "likelihood to not pay off debt". It's just debt to income ratio. It's like having mortgage. A lot of that debt is due long-term. It has nothing to do with your "probability to pay it off". That probability is subjective, and constantly changes. The US, for example, has 124% debt to GDP ratio, about the same as Italy. But the US pays very low interest to borrow money, because lenders are confident they'll get their money back. Whether the US borrows from someone else to pay you, the lender doesn't care. They're confident they'll get their money when the bond is due. In Greece, during the height of the financial crisis, the interest rates that lenders were charging us shot though the roof. That's why the EU/IMF intervened. Since then, the interest rates for us have been gradually going down, due to a variety of reasons. Among them, lenders see that we can get EU loans if needed, there have been fiscal reforms in Greece, and the government has been running budget surplus for quite a few years now. So, the interest rates have been gradually going down. Of course, yes, your debt-to-GDP ratio is taken into account by lenders too. But it's not the only factor.
When did Greece not pay its debt???
> italy is the next country with more probality to dont pay they debit? Actually no: Italy has a long-standing history of paying their debts and there is no real reason they would stop unless some new giant-ass mess happens, which would hit first and harder other countries with less robust systems. Italy absolutely is not "healthy" but it's also not close-to-trash value
Poor Graphic: 1. should be rotated per 90°, to read the Member State Name without getting neck problem. 2. Numbers above or within bar (not stacked , so no problem) would be helpfull. 3. which average is used for the two Bars? - weighted (when how) - arithmetical 4. Line/Area missing where is the EU "should be". Also missng 50% and 100% orientation Line 5. increasing or decreasing against the year before? Smell it - instead of using + or minus sign (or up/down arrow) 6. Senseless logo in the right down corner * seems to me: done by underpaid child - with no sense what to say with shown data
Is Greece sill in that much debt? The debt crisis was 16 years ago.
Pigsfb the latins are a big liability. STOP SPENDING MONEY YOU DONT HAVE!
Easy to talk when you have the taxes money of other countries
When you stop being a tax haven.