The USA has to prove that its large external debt is justified by its growth, innovative power and efficiency. In Europe it is important to enhance competitiveness and to reduce unemployment by implementing structural reforms. Japan has to rebuild confidence in its financial sector and has to create the conditions for a selfpropelling upswing.
If we take a forward looking view, it will be easily apparent that EMDCs will need to raise public debt to finance their development and in relative terms their public debt as a proportion of GDP will need to be higher than that of advanced countries.