The following table on debt as a % of GDP comes from Eurostat. Please note that in accordance with EU code ESA95, Eurostat includes all PFI debt as part of consolidated government debt. Therefore the figures quoted for the UK will be higher than those produced by the UK Treasury. The figures also include all local government debt and state government debt as well as federal government debt, therefore the figures for the USA will be higher than those generally published by the US Treasury, which quote federal debt but not state debts. The aim behind these figures is to give a true picture of debt by including all possible sources of government debt. All figures are as at December 31st of the year in question.
As before, the comparison in the following table is with other mature economies with a similar sized population (to see the entire EU's data, click the link above).
Year UK USA France Germany Spain Italy Japan
1994 48.6% 74.6% 48.4% 49.3% 61.1% 124.8% 79.7%
1995 51.8% 74.2% 54.6% 57.0% 63.9% 124.3% 87.1%
1996 52.3% 73.4% 57.1% 59.8% 68.1% 123.1% 93.9%
1997 50.8% 70.9% 59.3% 61.0% 66.6% 120.5% 100.3%
1998 47.7% 67.7% 59.5% 60.9% 64.6% 116.7% 112.2%
1999 45.1% 64.1% 58.5% 61.2% 63.1% 115.5% 125.7%
2000 42.0% 58.2% 56.8% 60.2% 61.1% 111.2% 134.1%
2001 38.7% 57.9% 56.8% 59.6% 56.3% 110.9% 142.3%
2002 37.5% 60.2% 58.2% 60.3% 52.5% 105.6% 149.5%
2003 38.9% 62.5% 62.4% 63.9% 48.7% 104.3% 157.6%
2004 40.4% 63.4% 64.4% 65.7% 46.2% 103.9% 164.0%
2005 42.4% * 66.6% 67.9% 43.1% 106.6% *
* indicates data unavailable
Germany's position deteriorates as a direct result of unification, when they embark on massive construction projects in Eastern Germany. Debt starts to fall as Schroeder takes over in 1998. but the post 2002 recession scuppers progress. Miterrand hands over a pretty good position to Chirac in early 1995, but things immediately deteriorate, with the post 2001 recession worsening things. Italy however makes valiant efforts to reduce debt, regardless of recession. In the USA, in the Clinton years debt starts to fall, but post 2001-recession means that debt starts to rise again. Much US debt is hidden in the state finances, and their overall position is not much that different to France and Germany, ironical given how Americans like to criticize the French and Germans. Japan is a complete and utter horror story - like Italy they face an aging population with the overall population falling, but unlike Italy, they worsened the level of debt that their future smaller population will have to bear.
Spain achieves stonking success - but it's worth noting that they are net recipient of EU funds, whereas the UK taxpayer managed to reduce debt even while being net contributers to the EU. However if Spain manages to keep up their record when EU funds are withdrawn this year, they are surely contenders to become one of the most important EU countries in the next decade, especially as they have a substantial population (circa 40 million).
The UK makes solid progress in reducing debt as a % of GDP, even while spending a lot on new hospitals and schools. One could argue that if no new schools and hospitals were built the debt would be even lower - but can a civilised country continue with it's infrastructure crumbling? The rebuilding of the last decade rivals that of the public building done during the late Victorian period. I believe that people in future decades will benefit and be grateful for it in a similar way that mid-20th century people were grateful for the Victorian expenditure. Debt in the UK too has crept up in response to the global recession of 2001-3. But fiscal policy is being tightened over the next three years, and debt should start falling again. And it's worth pointing out that in 2005, debt as a % of GDP was a full 9.9% lower than at the end of 1996. Something the Tories would be crowing about if it was they who had achieved it. Overall New Labour has improved the position compared to the one they inherited, even while rebuilding the infrastructure, and they have also kept debt lower than all other major economies of a similar size, bar Spain. People across the planet would give their limbs for such a record.
Previous articles in this series:
10 years of New Labour - Labour Productivity
10 Years of New Labour - Financial Services Regulation
10 Years of New Labour - Economic Growth Since 1997
10 Years of New Labour - Employment