Europe’s Debt Hole (Numerical Assessment)


Kristi Rohtsalu

Finlighter OÜ


20 Aug, 12


10.00 €

Add to cart


Report 186 KB

Debt Hole of Europe.pdf

Europe’s Debt Hole - Research Report in PDF (9 pages)


This analysis based on the 2012 data suggests that the current debt hole of the eurozone’s non-financial sector amounts to at least €5.16 trillion. Furthermore, there is a one plus trillion hole in EU countries outside the eurozone.

Broken down by individual countries and presented on the level of government, non-financial corporate and household debt, it reveals some interesting facts that are generally being overlooked or kept “under the cover”. Among others, these data accompanied with some further discussion provide alpha-opportunities for investors who bother to take a closer look.

Recommended for

Private Investor / Professional Investor / Asset Manager / Other

Product Classification in FRX


Europe - European Union 

Product Group

Researches and Analyses 

Product Category

Macro and Markets 


European Debt Crisis 

Detailed description

For anyone who has followed the recent economic developments closely enough and has at least some theoretical background in finance, the huge debt hole of the so-called advanced economies hardly comes as a surprise. Right now, the “debt bomb” has the same as exploded in the eurozone and threatens to “blow up” the entire single currency area.

The problem derives from the fact that over the past 30 years we have created immense amounts of debt backed by illusory assets. It has been aggravated by things like inequalities in the income, imbalances between countries, assets accumulating into a few hands.

Smart men have observed that debt is a two-edged sword. (Citing BIS Working Paper no. 352) Used wisely and in moderation, it is said to clearly improve welfare. But, when it is used imprudently and in excess, the result can be disaster.

I have applied their conclusions in order to estimate the size of the debt hole for the eurozone as a whole, and for each single country in the euro area. To add some context, I have also included certain other EU countries (United Kingdom, Sweden, Denmark, Latvia and Lithuania) as well as approximate calculations for the US and Japan.

The report is structured as follows:
* Notes on data and methodology
* Results and interpretations
* Conclusions, (policy) implications and suggestions for investors 

Author's disclosure

I have no positions in any stocks mentioned in the work, and no plans to initiate any positions within next 72 hours. I receive no compensation to write about any specific stock, sector or theme.



FRX Identity

Product ID:



For Sale


For Sale

Upload date:

20 Aug, 12 

Last updated:

20 Aug, 12 

Status change date:

20 Aug, 12