The document discusses the debt outlook and economic indicators of various European Union countries and other major economies. It finds that several EU countries have high government deficits as a percentage of GDP, including Greece, Ireland, Portugal and Spain. It also notes that structural issues like high unemployment rates pose ongoing threats in some EU nations. Finally, it shows that financial markets have become more sensitive to risk in the sovereign debt of other EU countries as the debt crisis has continued.

1. EU Debt Outlook
GDP Total Tax
As % of As % of Government Structural Current Account
Country (USD Revenues Rating S&P Last Review Notches
EU GDP World GDP Balance (% of GDP) (%of GDP)
Trillions) (% of GDP)
Austria 0.382 3.1% 0.5% -3.0% 1.4% 42.9% AAA Jul-75 --
Belgium 0.470 3.8% 0.6% -4.8% -0.3% 44.3% AA+ Dic-92 --
Cyprus 0.024 0.2% 0.0% -5.5% -9.3% 32.2% A+ Abr-08 +1.0
Finland 0.238 1.9% 0.3% -0.1% 1.4% 42.8% AAA Feb-02 +1.0
France 2.676 21.4% 3.0% -4.9% -1.5% 43.1% AAA Jun-89 --
Germany 3.353 26.8% 4.0% -1.1% 4.8% 36.4% AAA Ago-83 --
Greece 0.331 2.6% 0.5% -13.1% -11.2% 31.3% BB+ Abr-10 -3.0
Ireland 0.228 1.8% 0.3% -10.0% -2.9% 28.3% AA Jun-09 -1.0
Italy 2.118 16.9% 2.5% -3.9% -3.4% 43.2% A+ Oct-06 -1.0
Luxembourg 0.052 0.4% 0.1% 0.0% 5.7% 38.3% AAA Abr-94 --
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Malta 0.008 0.1% 0.0% -3.1% -3.9% 38.3% A Mar-99 -1.0
Netherlands 0.795 6.4% 0.9% -4.5% 5.2% 37.5% AAA Dic-92 --
Portugal 0.228 1.8% 0.3% -7.8% -10.1% 36.5% A- Abr-10 -2.0
Slovak Republic 0.088 0.7% 0.2% -4.9% -3.2% 29.3% A+ Nov-08 +1.0
Slovenia 0.049 0.4% 0.1% -4.9% -0.3% 29.3% AA May-10 +1.0
Spain 1.464 11.7% 2.0% -8.4% -5.1% 33.0% AA Abr-10 -1.0
EU-15 12.503 100% 15.2% -4.3% -0.4% 38.9%
Japan 5.068 40.5% 6.0% -7.4% 2.8% 28.3% AA Abr-07 +1.0
UK 2.184 17.5% 3.1% -7.8% -1.3% 35.7% AAA Abr-78 --
US 14.256 114.0% 20.5% -7.9% -2.9% 26.9% AAA Sep-91 --
Mexico 0.87 7.0% 2.10% -2.8% -0.6% 20.4% BBB Dic-09 -1.0
Source: IMF, Global Financial Stability Report, April 2010, OECD, GBM
Figures as of 2009
May 2010 1

2. EU Debt Outlook Faces Structural
Threats: High Unemployment
Total Tax Tax on As % of Total
Tax on Income
Country Revenue (% Consumption A+B Tax Unemployment
(B)
of GDP) (A) Revenues
Austria 42.9% 11.9% 12.0% 23.9% 55.7% 5.0%
Belgium 44.3% 11.4% 17.1% 28.4% 64.2% 8.0%
Cyprus 32.2% 8.4% 16.6% 25.0% 77.8% 6.3%
Finland 42.8% 13.7% 17.9% 31.6% 73.8% 9.0%
France 43.1% 13.7% 17.9% 31.6% 73.3% 10.1%
Germany 36.4% 10.2% 10.7% 20.9% 57.4% 7.5%
Greece 31.3% 11.4% 8.2% 19.6% 62.6% 10.2%
Ireland 28.3% 11.8% 12.6% 24.3% 86.1% 13.2%
Italy 43.2% 11.1% 13.6% 24.7% 57.3% 8.5%
Luxembourg 38.3% 10.5% 13.2% 23.7% 62.0% 5.5%
Malta 38.3% 10.5% 13.2% 23.7% 62.0% 7.1%
Netherlands 37.5% 12.0% 10.5% 22.5% 59.8% 4.0%
Portugal 36.5% 13.7% 7.7% 21.4% 58.7% 10.3%
Slovak Republic 29.3% 12.1% 6.1% 18.3% 62.3% 14.2%
Slovenia 29.3% 12.1% 6.1% 18.3% 62.3% 6.1%
Spain 33.0% 12.1% 6.1% 18.3% 55.3% 19.0%
EU-15 38.9% 11.1% 14.0% 25.1% 64.5% 10.0%
Research
Japan 28.3% 5.2% 9.5% 14.8% 52.1% 4.9%
UK 35.7% 11.3% 5.9% 17.3% 48.3% 8.0%
US 26.9% 11.0% 13.8% 24.8% 92.2% 9.9%
Mexico 20.4% 10.9% 5.0% 15.9% 77.9% 4.8%
Source: OECD, EUROSTAT, GBM
Source: EUROSTAT
May 2010 2

3. Potential spillover effects from EU
debt crisis
Sensitivity to EU corporate CDS
Research
Sensitivity to Sovereign CDS
Source: IMF, Global Financial Stability Report,changes between October 2009 and February 2010
Regression betas from daily spread abril 2010
Source: IMF, Global Financial Stability Report, April 2010
May 2010 3