See tables below:
- Britain’s total debt as a percentage pf GDP is actually 5% higher than Cyprus,
- our annual budget deficits are the same as a percentage of GDP, and
- the UK banking sector is only 4 or 5 times the size of our economy, compared to Cyprus’ 7 times.
The whole of the EU doesn’t look terribly different and the US is in a not dissimilar position. The point is that this model of using debt to replace tax revenues is unsustainable, and we need to move to a sustainable economic model now. Post-2015 will likely be too late.
From Guardian http://www.guardian.co.uk/business/2013/apr/22/eurozone-crisis-markets-rally-italian-president :
And here’s the key details of today’s government debt figures from Eurostat ” onwards).
Government debt, as a percentage of GDP, 2012
Euro area: 90.6%
Germany outshone the rest of Europe by posting a budget surplus, of 0.2%.
Annual surpluses/deficits for 2012, via Eurostat
Euro area: -3.7%
European Union: -4.0%
You can download the full details here.
From http://blogs.independent.co.uk/2013/03/18/cyprus-there-but-for-the-grace-of-god-goes-britain/ :
“There’s been a lot of head shaking in recent days about the size of Cyprus’ banking sector relative to its economy.
And it is indeed grossly inflated with assets and liabilities at around €126bn, or 700% of the island’s GDP.
If you have a banking sector that size you’re asking for trouble – for how can a state guarantee for depositors be credible? If the banks go under the state wouldn’t be able to rescue the savers.
Yet we’ve nothing to be smug about here in Britain.
This chart (below) from Albert Gallo, an analyst at RBS, shows that we’re not that far behind. Despite all the deleveraging of recent years our banking sector still has assets and liabilities equal to 450% of our GDP.
Remember this next time you hear from one of the banking industry lobbyists how vital it is for the UK’s economic future to have a massive banking sector. Remember Cyprus.