External Debt is the money owed by both public and private investors to foreign creditors. Many nations like Greece and the United States are facing a trillion/billion dollar crisis. Bailout plans have been issued by the President of the United States to his country and the European Union and IMF respectively to Greece. Let’s take a look at what the following top 10 Developed Countries racked up in external debt in 2010.
1. United States:
External Debt: 13,980,000,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: The United States has hit a deficit in its spending. On August 2nd, 2011, the United States was at a debt default and would have hit the debt ceiling of $14.3 trillion USD. Obama kept promise and hit a debt deal by August 2nd, 2011 by decreasing spending and by increasing some taxes.
2. European Union:
External Debt: 13,720,000,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: Under the stability and growth pact, European Union serves to make sure that the debt does not hit 60% of GDP. This means that the debt will not equal to 60% of the total income made by the populace both nationally and internationally.
3. United Kingdom
External Debt: 8,981,000,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: Just the government debt was between 37-43% of GDP in 2008. The external debt was 400% of GDP the same year. It has the second biggest external debt of all the countries in the G8. According to International Business Times the external debt in 2010 is 3 times the debt of the average American.
4. Germany
External Debt: 4,713,000,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: A country torn by war and stagnation has had resurgence in the post-cold war era. It rapidly emerged in the world market as a leader in exports. After an unexpected contraction in 2009, Germany is now growing and beginning to eliminate its debt with a 3.9% growth.
5. France:
External Debt: 4,698,000,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: Having the 5th largest debt, France decided to team up with Portugal in July of 2011. Since hitting a high in 2010, the external debt has gone down 6.43% in 2011. France is working hard to pay off its defaults.
6. Japan
External Debt: 2,441,000,000,000 USD
Source: World Factbook
Date: September 30, 2010
Description: With the earthquake and tsunami that hit Japan in 2011, things do not look any better than they were in 2010 for a country with the 3rd biggest economy. It has now reentered a recession after 2 contractions in growth.
7. Italy:
External Debt: 2,223,000,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: Growing debt caused Italy to take extreme measures in July 2011. They now have a 4 year plan where they will reduce the deficit by reducing spending and expenditures.
8. Australia:
External Debt: 1,169,000,000,000 USD
Source: World Factbook
Date: December 31, 2010
Description: The debt incurred has everything to do with stimulus packages proposed by the government. The government borrowed money from private investors which initially led to the increasing debt in 2010.
9. Canada:
External Debt: 1,009,000,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: Balancing the books has been a main concern for Canadians. Since Jean Chretien came into power it became a national policy. Many social and welfare policies were eliminated to help make way for debt reduction. In 2008, Canadian debt was the lowest of all the countries part of G8.
10. Greece:
External Debt: 532,900,000,000 USD
Source: World Factbook
Date: June 30, 2010
Description: Debt default has come and gone. Greece is unable to pay off its investors. The populace is suffering as jobs are cut and the cost of living is going up. IMF and European Union are providing relief and loans to Greece to help the country get back on its feet. The scene is looking grim at the moment.
References:
International Business Times. “Top 10 Countries Ranked by National External Debt – International Business Times.” International Business News, Financial News, Market News, Politics, Forex, Commodities – International Business Times – IBTimes.com. 5 May 2010. Web. 31 July 2011. http://www.ibtimes.com/articles/22380/20100505/top-10-countries-ranked-by-national-external-debt.htm.
