Good question! Let me just clear the decks first. I read material in the Economist, FT and John Mauldin’s newsletter over the weekend and wrongly credited TE with the “white flag” metaphor – it was Mauldin.
Calculating the number is way, way beyond me, so let me again credit Mauldin and as he is quite rightly protective of his IP, just say he credibly totals the guarantees and contingent liabilities at $600billion, equating to 130% debt/GDP.
However, that doesn’t allow for either the direct cost of any Spanish bank bail outs which may be necessary or the continuing fiscal deficit. So, 300% sounds high to me, but certainly it would be double the current figure and rising. The trend is said to be important to the bond markets.
Obviously the UK has absolutely no reason for complacency, but any any analysis that starts from the position our public debt position is twice as bad as Spain’s needs adjustment.