First, here is the OECD data and projections on the PIIGS with revised Greece levels:
Here is the same things with some other potentially troubled countries:
It is obvious that the problem children are Japan, Italy and Greece. Greece went from being the third highest debt/GDP country to the worst of the OECD. This move occurred not as a natural progression, but with the unveiling of their past lies/bad statistics/fraud. To look at their situation going forward, the government’s underlying primary balance, the amount of money it is spending or saving before interest payments, is quite informative.
Italy is fine; it is Greece and Japan who are in trouble. This is before including the effect of higher interest rates on the Greek budget. Every time Greece has to issue or roll over their debt at higher interest rates their actual budget deficit gets worse. Greece is planning on increasing their underlying government balance as a percent of GDP at a rate faster than any OECD country has since Denmark in 1982. Of course, when Denmark increased their underlying primary balance they had a much higher inflation rate which meant they didn’t need to make the nominal cuts that Greece is now making. Japan’s situation looks in many ways similar to Greece, but since they have control of their own monetary policy they are in a much better position.