Technically Greece is bankrupt, Macedonia among the lowest indebted countries in Europe

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While Greece formally belongs to the infamous group of countries that cannot afford to pay off debts to creditors, Macedonia has been listed as low-indebted countries in Europe, taking the fourth place.


As of yesterday Greece technically is bankrupt because the government debt of the country amounted to 177.1 percents and is even 141.1 percentage points higher than government debt of Macedonia. Greece also became the first country in Europe, which failed timely to repay its debt to the IMF and joined countries like Zimbabwe, Haiti, Sudan, Somalia and Afghanistan.

On the other hand, Macedonia is country that regularly services the obligations, and in February prematurely settles with the monetarists. With early payment of 174 million dollars to the IMF, reduced the level of state and public debt by 1.7 percentage points. Macedonia that has government debt of 36 percents and public debt of 43.6 percents remains the least indebted country in Europe and the region.

“We are thousands of years away from what is the situation in Greece, which borrowed hugely in the last 10-12 years and suffers the repercussions in this moment. What is a ground level for a country on a long term, for another may be relatively tolerable. The fact that the Republic of Macedonia with just over 40 percents of public debt and lower than 40 percents level of government debt is country that regularly settle their obligations and there are not, at least on the horizon, any risks that it will not continue in the future,” says university professor and former Finance Minister Trajko Slaveski.

He believes that there is no room for panic, no danger of overflow of the Greek crisis in the country.

What will bring the eventual exit of Greece from the EU zone?

According to Professor Tome Nenovski it depends how will continue the Greek crisis. If continues with this intensity, the situation will have impact on foreign trade relations of Macedonian companies with companies from Greece, especially in the contracts or plans for future conclusion of contracts for export of our products in Greece. Nenovski said that the volume of exports would be reduced, so our entrepreneurs can face this problem, and then will have to look for alternative markets.

For analysts, the key factor is whether Greece will remain in the EU zone or will decide to return to the drachma, issue that will get answer after the referendum on June 5.

“If the return to the drachma, then the value will devalue, and that will mean more expensive imports, and it will have negative impact on our export sectors. Exporters working with Greece should prepare for such future scenarios,” said Professor Nenovski.

If you compare the debts of Greece and Macedonia, our government debt is about four and a half times lower than that of its neighbors. Nenovski stresses that few months ago, before the whole world we proved that we deserve the ratings that we have, by prematurely paid off debt to the IMF 174 million dollars, which confirms the fact that we are the fourth least indebted country in Europe.

Proof that Macedonia is the fourth least indebted country and the latest Eurostat data on the level of the average government debt of the EU zone countries. According to these data, the average government debt in EU zone countries is 91.9 percents and is 55.9 percentage points higher than government debt to Macedonia.

Can we compare the Macedonian with Greek debt?

-No, Greece is currently most indebt country in Europe and other countries that are in debt far behind. Let us say we will see great debt in France, Italy, Spain, which have 110-120% government debt of their GDP, while Greece’s debt is about 177% of their GDP. On average, the debt of European countries is somewhere 91% of their GDP, and our government debt is 36% of our GDP, while public debt is around 45%, which means that our government debt is 4 times less than Greek. Therefore, he suggests that the comparison is inappropriate. The other rating agencies suggest that Greek bonds fell to their lowest level; in the economy we call it “nature of junk bonds.” On the other hand a few months ago, we have showed the world that we deserved rating by paying 174 million dollars to the IMF and suggests that Macedonia gradually discharge and reduce its public debt, which basically is proved by the fact that we are 4th least indebted country in Europe, adds Nenovski.