Will any country go into default? What are the candidates? What are the countries least likely to go into default? Many alternative economists foresee that the US will default on its debt as a country. The US might do it on purpose to maintain its current power while reducing its staggering debt.
But let's leave the US aside for a moment. In the Euro zone, there are several countries that are in danger. There is even an acronym for them: PIIGS or PIGS. One might also add Austria to that list. Have a look a public debt as percentage of GDP. Italy has a debt-to-GDP ratio at over 105%. Greece is around the 91% mark. Portugal around 67%, Germany around 67%. Austria around 60%. Switzerland is around 45%. Spain around 40%. The US is expected to go from 61% to 108%. Source: GDPs, external (public+private) debt, public debt.
How come Spain is in the PIGS list? How come Austria is about to join the PIGS list? Is it because the data is from 2008 and there was a big shift in 2009? I understand that the real-estate bubble burst in Spain in 2009 and that Austria has high risk with its financial deals in Eastern European countries. Still I am not sure. Here I found that Spanish debt is climbing from 40% to 60% in just 2 years (2009 and 2010). That would partially explain Spain being part of PIGS, but why is Germany not part of the PIGS? It has a public debt similar to Spain or Portugal (as percentage of GDP).
Germany is bigger, but does that make it less risky? What am I missing?
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