An interesting graphic from NYTimes shows the risind debt levels in Euro zone. India currently has a debt-to-GDP ratio 80%. Luckily, close to 85% of the debt is domestic and hence has less exposure to currency risk or recall risk.

It turns out that Euro zone is doing equally bad. The debt-to-GDP ratio, is more than 100% for Italy and Greece, more than 75% for France and Portual and more than 60% for Britan and Germany. Some countries like Spain and Greece are running budget deficits that crossed 12% of their GDP. The situation is alarming as the soverign risk ratings may be downgraded if the situation persists. Spreads on soverign bonds are already widening.

It will be interesting to see how Euro Zone deals with rising debt levels in the coming months.