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Spanish public debt tops €1 trillion-mark

AFP · 14 Aug 2014, 16:07

Published: 14 Aug 2014 16:07 GMT+02:00

The nation's accumulated public debt mushroomed to €1.007 trillion at the end of June from €996 billion a month earlier, the Bank of Spain said in a report.

Prime Minister Mariano Rajoy's government has struggled to contain annual deficits by raising taxes, freezing public salaries and curbing spending on services such as education and health care despite angry street protests.

Though the annual deficits are on the decline, they continue to push up the sovereign debt of the eurozone's fourth-largest economy. The public debt figure includes the cost of a €41 billion banking rescue in 2012 financed by Spain's eurozone partners.

The trillion-euro public debt figure is equal to 98.5 percent of Spain's 2013 gross domestic product, a calculation by the news agency AFP showed. The Bank of Spain has yet to release final GDP figures for the second quarter of 2014.

Spain enjoyed a relatively low debt ratio, equal to 36.3 per cent of GDP, in 2007. But the public debt soared after the implosion of a decade-long property bubble, which tipped the economy into a double-dip recession.

Spain's economy emerged from the latest two-year downturn in mid-2013 and grew in the second quarter of 2014 at a faster-than-expected quarterly rate of 0.6 per cent.

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The unemployment rate dipped below 25.0 per cent in the April-June period but still remains painfully high at 24.47 per cent.

Spain's public debt is expected to top 100 per cent of GDP next year – far above the 60 percent ceiling agreed among European Union members.

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