Selling off the silver.....it's started already

[Benjamin]

Christine Lagarde, French Economy Minister, has announced that the French Government are selling at least 5% of their shareholding in France Telecom to raise 2.7 billion euros.

The proceeds will be used to reduce the French public debt which stood at 1.142 billion euros at the end of 2006.

[Gluestick]

How worrying!

Consider this:

The UK national debt as at the end of 2003 - the last date for accurate(ish) figures was...

£437.4 billion

23 Oct 1996 : Column 33

 

Since 1979, the Government have passed 757 laws, yet they have completely failed to solve Britain's deep-rooted and endemic problems. Despite £130 billion from North sea oil and £80 billion from privatisation, since 1979 the British national debt--going back 300 years--has trebled under the Conservatives. It has doubled since the Prime Minister took office.

That £170 billion debt--the John Major debt--was accumulated in six years. The national debt has doubled since 1990, and now amounts to £7,500 of extra debt for every family in Britain. That debt is still increasing under his premiership, by £1,000 a second. We spend more paying the interest on the John Major debt than we spend annually on our police, our prisons and our universities all put together--just to pay the interest on the Prime Minister's debt. But the money from that extra borrowing has not been spent on preparing Britain for the future or improving the lot of ordinary people.

Despite that extraordinary level of borrowing, our national health service is facing a financial crisis. I use the word "crisis" advisedly, and it has been used by many who know the situation in the NHS well. It faces a financial crisis this winter. Beds are closing and waiting lists are lengthening again.

Source: Hansard

[woolybanana (ex tag)]

Ok, so it is too big to worry about. Lets just get on with ignoring it.

[TreizeVents]

And then of course if you add in the colossal debt of individuals as Brits spend loads of money they don't have on buying stuff they don't need, we have an additional problem.  I must look it up, but I think the Brits are the most indebted folk in Europe.  Buy buy buy.  In France this is not yet possible, but it is growing by the minute.  So if you added the personal debt to the national debt, it might even be a draw between the two countries.. 

But as tag says, just spend spend spend.  Why worry?  I think that's what they think in the USA, where their national debt and private debts is ... nope, doesn't even bear thinking about.

[Gluestick]

Latest numbers tend to demonstrate that the UK is responsible for one third of ALL unsecured debt in Western Europe.

Good stats here.

http://www.creditaction.org.uk/debtstats.htm

 

[SC]

The juxtaposition of the quoted figures in the first two posts could lead to very incorrect conclusions - 1.142 billion euros was the French public debt for the year (state expenditure - income) - the billion£437 quoted was the total UK debt. They are not the same thing.

On 2006 figures, France and the US have the same debt as a percentage of GDP (surely important?) of 64.7%.
The UK stands at 42.2%.
Source: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

This is why serious French commentators and responsible French politicians are concerned.

Steve

[Gluestick]

US Budgetary Deficit, which of course means Debt (i.e. internal government receipts less expenditure) is probably hovering around 5% of GDP. (US Sources including the Whitehouse).

French Budgetary Deficit is around 2.5% of GDP.

UK is about 3.5% however could reach 4% for the 2007 fiscal year.

Now, expressing National Debt (Total) as a direct percentage of GDP:

France: (Depends who you believe!) probably media 65.6% of GDP:

USA: 60%:

UK: 45%:

However, Italy is now 105%! Belgium 96%! Greece 106%: Portugal 62%; Austria 65%; Germany 66%: Malta 75%: Hungary 56%: Spain is 50%:

Overall, the EU states demonstrate an average of 65%

What one must consider is what France has (in terms of its health service, roads railways and general infrastructure), and whether or not one would be happier living in the UK, for example. Or Greece; or Italy?

As I have always said, the best costs money: real money. At least France has spent it where it counts!

On that point, UK's National Debt has now raced away to the point where in reality, for fiscal 2007, it is highly probable (bearing in mind how Brown missed so many forecast targets on PSBR - Public Sector Borrowing Requirement), that Britain's core National Debt to GDP Ratio will exceed 50% by the year's end.

Thus like Thatcher, one has to ask the question, does le petit Nicolas  desire earnestly to slash French core National Debt, or is he using this as political window dressing, in order to serve his right wing backers and asset strip France as Thatcher asset stripped the UK?

On that point, is is worth noting that during Thatcher's tenure, UK National Debt accelerated at an exponential rate, despite the much vaunted receipts from privatisation sales.

 

[allanb]

Absolute levels of debt don't mean much without a lot more analysis.

For instance: most personal debt in the UK, by far, consists of mortgage loans.  If debt is higher in the UK than in some other country, it may only mean that more people own houses in the UK.  If I borrowed money to buy my house, and you simply pay rent for yours, I may have ten or twenty times as much debt as you; but am I necessarily worse off?

On the other side of the coin: the UK has huge public sector pension liabilities, which are unfunded and therefore ought to be counted as debt (in a company's balance sheet they would have to be, but governments conveniently follow different rules).  

Debt is not bad.  Unmanageable debt is bad.

[Gluestick]

I do agree with much of this, particularly the unfunded pension elements which hike the actual UK Debt to over £1 trillion!

Which rather changes the Debt to GDP ratios! It would express the UK's true position as between 95-110%.

One point of dissention: UK's unsecured personal debt obligations are far higher than any where else and now probably unsustainable. And probably far worse, circa 70% of the UK's Total Capital Value is now represented by residential property!

Generally, however, my earlier point about what France has created in exchange for the debt, supports your point about good debt and bad debt, AllanB.

Yes, the whole subject matter does need much more in-depth analysis: and I would normally present a much deeper economic extract; not here, however!