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Eurozone debt at ‘danger zone’ level

DEBT in the Eurozone is at dangerous levels, the head of Germany’s central bank has warned.

Jens Weidmann, who is also on the governing council of the European Central Bank (ECB), called for banks’ exposure to the debt of individual countries to be capped.

“In the euro area we are already in the danger zone – at least with regard to public debt standing at 91pc and corporate debt at 105pc,” Mr Weidmann said yesterday in a speech in Frankfurt.

“Sovereign debt needs to be backed by capital, and exposure to a single sovereign must be capped, just as is the case for any private debtor.”

Ireland’s debt as a percentage of the size of the economy, while falling, remains one of the highest in the Eurozone at about 110pc of gross domestic product (GDP) last year.

The Department of Finance predicts gross debt will continue to fall over the coming years to 95.4pc in 2018. Updated forecasts are expected next month.

Between July and September last year, government debt hit 92.1pc, down fractionally from the 92.7pc in the previous quarter. Ireland had the fourth highest debt level, with Greece topping the table, followed by Italy and Portugal.

Mr Weidmann also said he is opposed to further emergency funding for Greece.

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