Debt high but more sustainable than in Greece

The public debt ratio in Greece reached 177% of GDP in 2014, whereas, it was only about 130% in Portugal and around 98% in Spain. While it is rightly pointed out that Portuguese corporate and private debt levels are much higher so that total debt is actually somewhat higher than in Greece, the private sector in Portugal also has much higher financial assets. The Portuguese and Spanish position on the financial markets is improved by their lower publicdebt.

Consequently, the difference in the net financial asset position of the private sector (about 10% of GDP) vis-à-vis Greece is much smaller than the debt positions (about 80%). Furthermore, private debt in relation to GDP has fallen significantly in the last two years; the debt trend is therefore pointing in the right direction, which makes the current situation much more sustainable, says Commerzbank.