Tensions were fuelled not only by the deteriorating outlook for the global economy but also by the worsening of Greece’s financial situation and the fears of contagion triggered by the announcement of the private sector involvement in the reduction of the country’s public debt. 2. If the euro area were viewed as a single country, it would appear as a sound and balanced economy.
The external accounts are in balance. The public sector deficit and debt this year are forecast to be just over 3 and 90 percent of GDP, respectively. Households’ gross financial wealth is three times their annual disposable income, while their debt is equal to that income; aggregate corporate financial debt is equal to one year’s output.