European Countries Don’t Care Much for Debt Limits Either

The US obviously has major issues with debt ceilings. But can any country in Europe brag?

While the EU has a Stability Pact of 60% — meaning countries in the European Union are supposed to keep debt below 60% of their GDP — most countries are failing to comply, including France (NYSE:EWQ) and Germany (NYSE:EWG), the two countries most involved in putting together Greece’s aid package.

In May, the U.S. government ran a $57.6 billion budget deficit, a vast improvement over February’s record high budget and 42% lower than May 2010. Clearly some improvement, though nothing to give us bragging rights either. The U.S. has been hovering this year just below the 100% mark, with GDP and debt almost equaling each other, making our European counterpart likely to be Belgium.

And despite any small gains made this year, they may be more than offset by losses to GDP, with latest White House estimates $219 billion lower than a year ago, and December’s Republican tax cuts adding $858 billion to the deficit over the next decade, with $410 billion of that burden falling on the 2011 budget. So instead of the previously estimated 96.4% debt to GDP ratio, we could be looking at a ratio closer to 103%. That’s Portugal territory.