Auf Wiedersehn

10 Jul

Germany’s President Joachim Gauck has called for Angela Merkel to provide a reason to the German public why they should continue to bailout the nations of the Euro-zone. German president tells Angela Merkel to come clean on EU debt deal

With the news seeming to always pit Germany against the rest of Europe, it should not be too surprising the the Germans are getting a little bit tired of having to be the responsible party in the room.

Spain, Portugal, Italy, Ireland and of course Greece. These are the nations that, almost by default(no pun intended), come to mind in any euro-debt discussion. However, it is important to realize that even the strong nations of Europe still have their own debt burdens to worry about.

This handy interactive chart over at the BBC shows who owes what debts to whom. Exploring the chart shows the staggering amount of both foreign and government held debt to GDP ratios for the various nations. The most astonishing figures coming from those nations with are regularly in the news.

However one notices that when looking at Germany, the foreign debt to GDP is 176% and government debt to GDP is 83%. Not exactly prime territory to be in.

Germany finds itself in quite a precarious position. Part of their strength and success comes from their manufacturing and industry. But while they may have strength there, they depend on being able to export those products around the world. Without stable economies worldwide, the German economy would slow down(and may be so doing already).

However, in funding the continual bailouts of Europe, Germany is putting itself in the same position as the nations it is bailing out. Putting yourself in debt to rescue another(several other) nations from debt seems counter intuitive.

 

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