Private debt in Europe – Debtors’ prison | The Economist

High household debt helps explain why the Netherlands, along with Italy and Spain, remained in recession in the second quarter of 2013 even as the euro area in general embarked on recovery. Dutch GDP this year will be 2% lower than in 2011 and more than 3% below its previous peak, in 2008. Though this loss of output is dwarfed by that suffered in southern Europe, it illustrates the malign effect of high debt when house prices fall—recent declines have been close to those in Spain. That has pushed a quarter of Dutch homeowners into “negative equity”: their houses are worth less than their mortgages.

via Debtors’ prison | The Economist.

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