Reuters
February 22, 2012
Away from the markets' fixation with the debts of Greece and other governments, concern is growing at the painfully slow progress Europe is making in tackling a much bigger mountain of corporate and household debt.
With austerity pointing to weak growth if not outright recession, the risk is that the burden of servicing the debt can only increase, causing a rise in bad loans. The spotlight then would fall on the capacity of banks to take losses and whether they might have to turn to their governments for help.
And over indebtedness is not confined to the periphery of the bloc.
Denmark, Sweden and the Netherlands all have private-sector debt that far exceeds the safety threshold of 160 percent of GDP set by the European Commission as part of a new exercise to detect and correct risky macroeconomic imbalances.
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