Weak Economy Raises Risk

Posted November 7th, 2011 at 2:55 pm (UTC-5)
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Greece's debt is equivalent to 165% of the nation's Gross Domestic Product. George Mason University finance professor Gerald Hanweck says the Greek debt to GDP ratio is a problem because the economy is shrinking. The Greek economy is dependent on tourism and agriculture and has little capacity to generate the income needed to pay off these large debts.

Italy has significant debt, but less than Greece. Professor Hanweck says Italy's economy is more resilient than Greece because it has more manufacturing and stronger exports.