Government debt to GDP for the Eurozone stood at 85.9% at the end of Q1 2019 (as against 87.1% at the end of Q1 2018). For the European Union, the number was 80.7% (as against 81.6% at the end of Q1 2018).
Europe’s lost economic decade in charts
- Parts of the European Union have seen GDP per capita shrink between 2007 and 2017 and the overall compounded annual growth rate for the European Union was just 1.2%
- GDP growth for the European Union between 2007 and 2017 adjusted for inflation was negative
- Banks in Greece, Cyprus, Portugal and Italy have a non-performing loan ratio of over 10% a decade on from the financial crisis and have only provisioned around 50% of the losses
- The European Central Bank (ECB) is by far the biggest holder of European bonds and has a balance sheet of €4.5 trillion or some 45% of the GDP of the Eurozone
- 18 of the 28 countries that are part of the European Union have seen house prices fall between 2008 and 2017
- Greece has been the worst affected country, with its stock market down 85% since 2007, GDP per capita down 22% since 2007, house prices down 43% since 2008 and banks in Greece currently have a non-performing loan ratio of 42%
- Eurozone Debt as % of GDP is gradually falling but is still historically high
- Since the financial crisis of 2008, economic uncertainty has seen falling fertility rates for the European Union with population now set to fall over the coming decades
US 10-year bond yield over 3% as Greece 10-year bond yield falls below 4%; US 2-year bond yield hits 2.5%
US bond yields have soared recently with the 10-year bond yield hitting 3% today (up 0.66% over the past year), the highest since January 2014. The 2-year bond yield topped 2.5% (up a massive 1.18% over the past year), the highest since July 2008. Meanwhile, the Greece 10-year bond yield was lower than 4%, closing at 3.99% (down 2.45% over the past year), the lowest since 2005. Continue reading “US 10-year bond yield over 3% as Greece 10-year bond yield falls below 4%; US 2-year bond yield hits 2.5%”
The Athens Stock Exchange General Index has returned 19% over the last year (but lost 85% since 2007); Australian interest rates are lower than that of the US for the first time in 18 years
The Greek stock market has been one of the best performing markets in the world over the past year. The Athens Stock Exchange General Index has returned 19% over the last year. But it has lost 85% (5334.5 to today’s close at 781.14) in value since October 2007. Continue reading “The Athens Stock Exchange General Index has returned 19% over the last year (but lost 85% since 2007); Australian interest rates are lower than that of the US for the first time in 18 years”
US 10-year bond yield hits a 4-year high, is the US now an exception?
Greece (Moody’s Credit Rating: Caa2) is now paying 83 bps lower interest on 2-year bonds than the US (Moody’s Credit Rating: Aaa). Is the US now truly the exception? Continue reading “US 10-year bond yield hits a 4-year high, is the US now an exception?”
Impact of interest rates in the US and the UK heading higher
What a difference a year makes, these are the current 10 year government bond yields, Continue reading “Impact of interest rates in the US and the UK heading higher”
Can Governments really afford higher interest rates?
Governments around the world have close to $80 trillion in debt. As interest rates begin to rise globally we explore if governments around the world can really afford higher interest rates. We will write about the impact of rising interest rates on individuals/households and corporates/businesses later. Continue reading “Can Governments really afford higher interest rates?”