Spain's public debt surged in the second quarter of 2011 to a 14-year high, the Bank of Spain said on Friday, even as the government battled to mop up red ink in its annual budgets. Big shortfalls on the government's books are pushing up the overall debt each year.
By the second quarter of 2011, the public debt had climbed to the equivalent of 65.2 percent of gross domestic product from 57.2 percent of GDP a year earlier, the central bank said. Spain's public debt - a major source of concern for financial markets fretting over the sustainability of eurozone sovereign debts - is now at the highest level since 1997.
Debts piling up Spain's 17 semi-autonomous regions are a major worry for the central government and for investors who fear they could prevent the government meeting its deficit-cutting targets. In the second quarter, the regions' total accumulated debts amounted to 12.4 percent of the country's GDP - a record high. The country's overall debt now lies above the European Union-agreed ceiling of 60 percent of GDP. But it is still well below the European Union average debt of 85.1 percent of GDP in 2010. Spain has scrambled to stay ahead of the markets by taking sweeping measures to ensure it can keep its promises to lower annual deficits and avoid the fates of Greece, Ireland and Portugal.
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