Government debt in France and Italy expanded to euro-era highs in the second quarter, as nations in the currency bloc grappled with weak growth while pushing through budget cuts and economic reforms.
France, the second-largest economy in the euro area, saw its debt swell to 97.7 percent of gross domestic product in the second quarter of 2015, the European Union’s statistics agency said in a report on Friday. Debt in Italy, the bloc’s third-biggest economy, rose to 136 percent of GDP. The figures are the highest for both countries since the euro debuted in 1999.
The figures underscore the fragilities of the euro-area recovery as the European Central Bank signals it is preparing for more stimulus. The inflation rate dropped below zero last month, hit by a rising currency as an emerging-market slowdown drags on global trade.
This post was published at David Stockmans Contra Corner on October 24, 2015.
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