Is Germany really the financial powerhouse people claim? The figures tell a different story to the usual narrative

You’d think from the way people describe Germany, that it’s the financial powerhouse of Europe. You regularly are given the impression of it’s masterful performance in industry, it’s intense work ethic and sensible fiscal policies. But is that the truth or merely a reality put out by the media.

From the Global Finance website, the top worst debts in the World. It might surprise you.

For simplicity of use, I’ve highlighted Germany in red. You’ll see that they are barely behind the United States in total debt not to mention that the AAA rated United Kingdom is in a worse off position then either A1 rated Spain of AA+ rated France or Italy.

A country’s “total debt” includes government debt as well as the debt of financial institutions, non-financial businesses and households. For the 10 developed economies (Canada, France, Germany, Italy, Japan, Spain, South Korea, Switzerland, UK and US), total debt increased from 200% of GDP in 1995 to more than 300% of GDP by 2008.

By Tina Aridas – Project Coordinator: Alessandro Magno

Countries Gov Nonfin bus House Fin Totals
1 Japan (2009) 197% 95% 69% 110% 471%
2 United Kingdom (2009) 59% 110% 103% 194% 466%
3 Spain (2009) 56% 141% 87% 82% 366%
4 South Korea (2009) 31% 116% 78% 107% 333%
5 France (2009) 80% 114% 44% 84% 323%
6 Italy (2009) 109% 83% 41% 82% 315%
7 Switzerland (2007) 37% 75% 118% 84% 313%
8 United States* (2009) 67% 79% 97% 53% 296%
9 Germany (2009) 73% 69% 64% 80% 285%
10 Canada (2009) 65% 56% 88% 50% 259%
11 China (2008) 32% 96% 12% 18% 159%
12 Brazil (2008) 66% 30% 13% 33% 1

What’s more abundantly clear from the figures is that Greece’s pillaring in Europe over it’s fiscal policies are wholly unsubstantiated.

Here are Greece public deficit figures against GDP.

2007 2008 2009 2010* 2011**
-3.7% -7.7% -13.6% -7.9% -7.3%

*Estimate    **Forecast

Here are Germany’s public deficit figures against GDP

2007 2008 2009 2010* 2011**
0.2% 0% -3.1% -4.5 -3.7%

*Estimate    **Forecast

Here are the United Kingdom’s public deficit figures against GDP

2007 2008 2009 2010* 2011**
-2.7% -4.9% -10.1% -10.2% -8.1%

And finally, here is France’s public deficit figures against GDP

2007 2008 2009 2010* 2011**
-2.7% -3.3% -7.6% -8% -6%

The only conclusion you can make from the cold hard figures is that Greece didn’t overspend it’s way into debt, no worse than a number of other “fiscally astute” countries. You can also conclude that the City of London must have pictures of the ratings agencies executives, naked. Because a country with such humongous debts and little if any growth simply doesn’t deserve the AAA rating it currently has… and I live here.


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