Within the euro area, Greece has the highest net debt ratio, at about 130 per cent, with Italy next, at about 100 per cent. Concerns in financial markets about the sustainability of government debt levels in Europe first emerged in late 2009, when the Greek Government revealed that its fiscal position was significantly worse than it had previously led the markets to believe.
Increasingly however, as credit ratings become more widespread, central banks will be positioned to place their reserves in issues of highly rated developing country issues. This should lead to a situation where developing countries use their reserves to help each other without exposing their assets to too much risk.