By Nick Mann | 24 January 2013

Debt levels in the European Union increased in the third quarter of 2012, according to Eurostat.

Yesterday’s data from the EU’s statistical service revealed that the government debt to gross domestic product ratio for the eurozone was 90% at the end of September, compared with 89.9% three months earlier. For the EU as a whole, the debt-to-GDP ratio also crept up, from 85% to 85.1%.  

Despite the efforts of many EU countries to reduce their debt through austerity measures such as spending cuts and tax increases, debt levels were also higher at the end of September than a year earlier. For the eurozone, debt increased from 86.8% of GDP to 90% and for the EU, from 81.5% to 85.1%.

The UK’s National Institute of Economic and Social Research claimed last year that the co-ordinated approach being taken to austerity in Europe was adding to debt levels rather than reducing them.

Yesterday’s figures show debt-to-GDP ratios increased in 15 member states over the third quarter. The largest rises were in Ireland (5.9 percentage points), Greece (3.4 percentage points) and Portugal (2.9 percentage points). Conversely, 11 countries reduced their debt levels, most significantly Latvia (down 2.6 percentage points), Malta (2.5 percentage points) and Austria (1.3 percentage points).

Greece had reduced its debt-to-GDP ratio to 149.2% in the second quarter of the year but it crept up again in the third quarter to 152.6%. Other countries whose debt exceeded their GDP were: Italy  (127.2%); Portugal (120.3%); Ireland (117%) and Belgium (101.6%).

In comparison, the lowest ratios were recorded by Estonia (9.6%), Bulgaria (18.7%) and Luxembourg (20.9%).