The 11 Nations With Higher Sovereign Debt Ratios Than Greece

posted on 06-07-2019

There's no two ways about it, sovereign debt is a serious problem worldwide. And as we've seen, most countries have thus far lacked the political will to deal with the problem. 

But at some point, economics takes over and forces governments, politicians and citizens to bring debt ratios back into line. Unfortunately, that often only happens via recession, default and occasional civil unrest.

See: Greece, the U.S. & 8 More Countries Drowning In Government Debt

The worrisome expansion of sovereign debt in the United States and the recent sovereign debt crisis in some European countries raises the question, what countries have the most debt relative to their gross domestic product (GDP)."

What may surprise you is the 11 countries with the highest debt-to-GDP ratio are in Europe, but the U.S. barely cracks the top 15. While it seems that the European sovereign debt crisis has passed for now, the size of the debt for these countries warns that it will return unless there are significant growth and debt payment actions.

For a number of years Ireland was one of the fastest growing countries in Europe. Then along came the bust in housing, and the growth bubble burst. With a debt-to-GDP ratio of 997%, Ireland will most likely spend many years struggling to reduce their debt and generate real growth.

Seeing Switzerland so high on the list may be a bit of a surprise. After all, Switzerland is known around the globe as a bastion of financial conservatism. Yet the Swiss have accumulated a debt-to-GDP ratio of over 400%. 

The United States finds itself in middle ground here. While we have the world's largest debt load, we also still have the world's largest economy. If we can slow the debt explosion, we may still have room to maneuver and grow. On the other hand should we continue to expand debt at its current and projected rate, we could face years of slower growth as our overwhelming debt consumes capital and earnings.

To learn more about the possible devastating side-effects of sovereign debt overload, see our popular article Crisis In Greece: Why This Is Your Problem, Too.