Top 10 Countries in the Red

Private sector debt triggered Ireland's government bailout.
Private sector debt triggered Ireland's government bailout.
Peter Macdiarmid/Getty Images

Public debt as percentage of GDP: 96

Population: 4.6 million

Ireland is a somewhat surprising country to have succumbed so quickly to the financial crisis. It was, as mentioned on the previous page, part of the PIGS economic outcasts. However, Ireland's GDP far outpaced its public debt until 2008, when its market suddenly slipped into fiscal quicksand [source: Dumain and Rapp]. In 2007, government debt accounted for a mere 11 percent of the Irish GDP, and as of this writing, that percentage is projected to hit 107 in 2013 [source: The New York Times].

What explains the perilous jump into indebtedness? In 2007, Ireland's private sector debt had already exceeded 240 percent of the GDP, so when recession struck, the banks couldn't cover their expenses, triggering a government bailout [source: Norris]. This, in turn, resulted in a spike in public debt. For that reason, Ireland is a prime example of why judging a nation's financial solvency based solely on sovereign debt is more of a crapshoot than a calculation.