Eurozone debt levels rise

Brussels - The eurozone's mountain of debt expanded in the first three months of the year following gains in nations at the centre of the region's financial crisis, data released on Tuesday showed.

Total public debt in the 18-member currency bloc climbed from 92.7% of gross national product (GDP) in the final quarter of last year to 93.9% in the first three months of this year as a result bringing to an end two consecutive quarterly gains, the European Union statistics office Eurostat said.

Leading the rise was a pickup up in national debt levels in Italy, Spain and Portugal.

The release of the data coincided with a new call from Italian Economy Minister Pier Carlo Padoan for the introduction of more flexibility in pursuing structural reform goals.

"Structural reforms take time to bear fruit, so when there is an assessment [of a country's economic policies] one should take into account that a country needs time, not one year, but two or three to judge whether its reforms are working," Padoan told the EU parliament in Brussels on behalf of the Italian presidency of the EU.

"We need flexibility ... to make the most out of growth strategies which combine a sound fiscal position and measures addressed at bringing your debt down with structural reforms that boost growth," he said.

He also said some flexibility was warranted when "the macroeconomic environment is very unfavourable." "I am a strong believer of the idea that the way out of debt is growth, and there is no shortcut to that," said Padoan, describing the current economic picture in eurozone as "disappointing."

At 174.1% of GDP, Greece had Europe's biggest chunk of debt, although this was down 1% compared with the final quarter of 2013.

First-quarter debt in Europe's second biggest economy, France, also rose, creeping up by 1.9% to 96.6% when compared with the three months to December 2013.

Italy's quarterly debt rose by 3% to 135.6% and Spain's rose by 2.9% to 96.8%, while Portugal's national debt was also up 3%. Total national debt in the 28-member EU stood at 88% in the first quarter, up from 87.2% in the final three months of 2013.

At 10% of GDP, Estonia, which joined the eurozone in January 2011, had Europe's lowest debt level. The first-quarter national debt of Europe's biggest economy, Germany edged down 1.1% to 77.3%.

However, the release of the latest German debt data came amid signs that the nation's growth machine has lost momentum, with its central bank the Bundesbank warning on Monday that the country's economy stagnated in the second quarter amid global economic uncertainties.

This "sounded the alarm because it indicates that the weakness [of the euro economy] is more persistent" than was forecast up to six months ago, said Padoan.