The debt of the euro region rose to the highest since the start of the single currency last year as governments increased borrowing to plug budget deficits and fund bailouts of fellow nations crippled by the fiscal crisis. The debt of the 17 euro nations rose to 87.2 percent of gross domestic product in 2011 from 85.3 percent the previous year, official European Union figures showed today. That’s the highest since the euro was introduced in 1999. Greece topped the list with debt at 165.3 percent of GDP, while Estonia had the least at 6 percent of GDP. Euro-region nations are on the hook for the bulk of the 386 billion euros ($508 billion) in bailouts for Greece, Ireland and Portugal after those nations were forced to seek rescues when their borrowing costs become unsustainable. Concern that Spain and Italy may follow has led their bonds to decline for six weeks, pushing yields toward the 7 percent level that triggered the other bailouts. “The different debt trajectories of the euro-area countries crystallize the process of great divergence between the periphery and the core of the euro area and even more markedly between Germany and the rest of the region,� Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London, said by phone. To contact the reporter on this story: Andrew Davis in Rome at abdavis@bloomberg.net To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net

Source