Of a state’s aggregate debt, private debt is that contracted by firms and households with financial intermediaries. In a nutshell, it represents the engine of international capitalism as it allows social actors to consume (or, at best, invest) even in the absence of previously accumulated economic resources. Mortgages, credit lines, consumer credit, business credit, short-term credit, etc. are all forms of private debt.
In the crisis that has hit the Eurozone (since 2009) the accumulation of private debts by households and businesses is one of the triggers. On the occasion of a conference held in Athens in 2013, the Vice-President of the ECB Vitor Constancio explicitly declared that the origin of the crisis (which many still attribute to the deterioration of public finances) was the disproportionate accumulation of private debts throughout the Eurozone (especially in the South).
