Here’s the kernel of Fitch Ratings’ report on European government borrowing:
The thing to focus on here is really the green bit — the short-term debt — a lot of which rather exposes governments to things like interest rate shocks. It’s also what’s responsible for pushing this year’s overall funding requirement, of €2,200bn, higher than 2009’s level of €2,120bn.
There’s a bit more detail on the short-term debt issue in the below table:
Remember that the short-term debt will need to be rolled over sometime this year, so immediate funding requirements for 2010 look heaviest in places like France, Germany and Italy.
Scariest of all — the Fitch estimates don’t take into account anything unexpected.
Things like, err, bank failures:
Note that for 2010, Fitch has assumed no below‐the‐line operations (eg bank recapitalisation) and no change in governments’ cash balances (eg no pre‐funding of future expenditure).
Full report in the Long Room.