REUTERS

BRUSSELS EUROPE’S debt in late 2011 stood well above the EU’s limits for a healthy economy, with even powerhouse Germany bearing a debt load that could take decades to pay down, although borrowing as a proportion of output was smaller than for the United States.

The 27-nation European Union’s total government debt rose slightly to 82.2 percent of economic output in the third quarter of 2011, statistics agency Eurostat said on Monday, while debt in the 17-nation eurozone declined to 87.4 percent of output.

Europe’s debts soared from levels nearer EU limits of 60 percent of gross domestic product following the introduction of the euro in 1999, as some countries indulged in massive borrowing at very low rates of interest.

Borrowing costs for sovereigns such as Italy and Spain were pushed to unaffordable levels late last year as the scale of their vulnerability became apparent to investors.

But with economic growth stalling as spending across the bloc is cut to bring down fiscal deficits, EU states face very slow progress in lowering their debt burdens.

“It’s nice for EU policymakers to say that things aren’t as bad as the United States, but Washington still has market confidence and that cannot be said for all of Europe,” said Carsten Brzeski, a senior economist at ING.

US debt-to-GDP hit 100 percent in 2011 and under its current trajectory would exceed 115 percent of GDP by 2016, according to International Monetary Fund figures. Japan’s debt burden also exceeds the EU’s, with the IMF forecasting Tokyo’s gross debt to reach 250 percent of GDP in 2015.

But Europe is not a single entity and even the eurozone’s monetary union is seen by many as an incomplete project, lacking the fiscal cohesion economists say it needs.

Debt levels vary hugely across the continent, from 6 percent of GDP in Estonia to 159 percent in Greece.

Of the eurozone’s 8.2 trillion euro total government debt, some 70 percent is owed by Germany, France and Italy. While Berlin can still bank on strong investor backing, France lost its topnotch rating last month when Standard & Poor’s downgraded its sovereign debt from triple-A.