Guess who has the riskiest debt


It is the postulate of the study “Public debt: new issues and ESG rating” (environment, social and governance) conducted by economists and analysts specialized ESG Oddo stockbroker, under the leadership of Jean-Philippe Desmartin, Nicolas Jacob, and Bruno Cavalier.

The study “Public debt: new challenges and ESG rating” by ESDO economists and specialized analysts of the stockbroking firm Oddo uses the qualitative criteria of the “extra-financial” rating, to determine the “sustainable” nature of the performances companies to inform the decisions of socially responsible investors (SRI). At this yardstick, some countries may have more trouble to make than we think.

In the eurozone and elsewhere, the global debt crisis is punctuated by the deterioration or – more rarely – the raising of the ratings of the States by private rating agencies: Standard & Poor’s, Moody’s & Fitch mainly. More accustomed to rating companies and financial products – their original mission, with the success that we know … – these agencies first use traditional economic and financial criteria.

But are these criteria enough to determine which State debts are the riskiest in the long run? And if this risk also depended on the sustainability of growth, and therefore the sustainable capacity – rather than immediate or medium term – to repay creditors?

The study uses the qualitative criteria of the “extra-financial” rating, which has developed in recent years to determine the “sustainable” nature of corporate performance, in order to inform the decisions of socially responsible investors (SRI). At this juncture, some countries may have more problems than they think – the United States, the United Kingdom and Luxembourg in particular – while the Scandinavian countries are well armed.

The study of Oddo Securities covers 45 states, ie the 34 developed or intermediate countries belonging to the Organization for Economic Co-operation and Development (OECD), as well as other members of the European Union and candidates for entry : a sample of countries that together issued two-thirds of the $ 50.5 trillion (38.843 billion euros) in global public debt identified at the end of 2011.


To note these countries, a lot of data exist, provided by the United Nations agencies, the World Bank, the OECD, the foundations and academic institutes … It only remained to collect them and to treat them according to the methodology of the twenty-five years of sustainable development by the United Nations.

At the top of the list, the best payday loan consolidation surprises little. There are Scandinavian and Oceanian democracies, whose openness, transparency and social and democratic balance – combined with economic dynamism – are often touted. Sweden (72 points out of 100) is at the top of the list of the seven countries ranked in “strong” opportunity, ahead of Denmark (67.5), New Zealand and Norway (66), Finland (64.5 ), Australia (62.3) and Austria (60).

The rest of the list is more surprising, since the countries classified in the category “opportunities” – above the average of 52.3 points out of 100 – have levels of development still very different, from Canada (58,5) from the Netherlands (57.5) or from France (57) to Poland (56.5) or Croatia (56) … ahead of Germany and Switzerland (56), and even more so Japan (52).

But the result is frankly surprising under the average.

The multi-criteria analysis places Belgium and Luxembourg at the level of Estonia (52), ahead of Ireland (51.5) and the United Kingdom (51), itself at the level of Romania.


Above all, the United States scores very poorly (44), like Italy (43.5), tied with Montenegro to close the ban in the “moderate opportunity” category.

While in the last division (“low opportunity”) are three members of the eurozone: Cyprus (43), Greece (42) and Malta (39.5), alongside Mexico (40.5), Albania (42) or Macedonia (37), good last.

The model that comes to these conclusions is a complementary aid for investors: these notes have the merit of pointing out risks that are not necessarily highlighted elsewhere. Thus, three countries – Luxembourg, the United States and the United Kingdom – have an ESG rating called ” perfectible ” (moderate opportunity), while their financial rating measured by S & P is considered solid (AA + or AAA).

The environmental, social and governance characteristics ” could weigh negatively on the sustainability of the financial debt of these three countries”, considers Oddo Securities, which places them “under negative watch ESG”. Croatia, Latvia, and Iceland are in the opposite situation: rated BBB -, their good ESG performance improves “the sustainability of their debt”!