Bubbles keep a burstin!

The Dutch this time.

Which is only surprising if you aren't paying close attention.  The Danish citizenry are also deeply in debt, and have a robust economy masking a lot of debt.

Underwater: The Netherlands Falls Prey to Economic Crisis
Cristoph Shult and Anne Seith, Spiegel, 2 April 2013 (hat tip: NC)

Underwater" is a good description of the crisis in a country where large parts of the territory are below sea level. Ironically, the Netherlands, once a model economy, now faces the kind of real estate crisis that has only affected the United States and Spain until now. Banks in the Netherlands have also pumped billions upon billions in loans into the private and commercial real estate market since the 1990s, without ensuring that borrowers had sufficient collateral.

Private homebuyers, for example, could easily find banks to finance more than 100 percent of a property's price. "You could readily obtain a loan for five times your annual salary," says Scheepens, "and all that without a cent of equity." This was only possible because property owners were able to fully deduct mortgage interest from their taxes....

The Netherlands is still one of the most competitive countries in the European Union, but now that the real estate bubble has burst, it threatens to take down the entire economy with it. Unemployment is on the rise, consumption is down and growth has come to a standstill. Despite tough austerity measures, this year the government in The Hague will violate the EU deficit criterion, which forbid new borrowing of more than 3 percent of gross domestic product (GDP).

... The prices of commercial and private real estate, which were absurdly high for a time, are sinking dramatically. The once-booming economy is stalling.

"A vicious cycle develops in such situations," says Jörg Rocholl, president of the European School of Management and Technology in Berlin and a member of the council of academic advisors to the German Finance Ministry. "Customers have too much debt and cannot service their loans. This causes problems for the banks, which are no longer supplying enough money to the economy. This leads to an economic downturn and high unemployment, which makes loan repayment even more difficult."

The official unemployment rate has already climbed to 7.7 percent. In reality, it is probably much higher...

Note that these little collapses are going on all over Europe.   The focus is mostly on sovereign debt, but households, compared to their payment capabilities, and banks are in equally hot water


from here

The lower green line (triangles for the color blind) is households: but it is well over 50% of GDP.  This chart is from 2008 but the situation has not gotten better.