By Nick Mann | 22 October 2012
The combined deficit of the European Union’s 27 member states totalled 4.4% of their gross domestic product last year, according to data published today by Eurostat.
This represents a downward revision from the 4.5% of GDP provisionally reported by the EU’s statistical service in April. In 2010, the EU member states’ combined deficit totalled 6.5% of GDP.
Its deficit data for the eurozone remains unchanged, with the 4.1% of GDP reported by the 17 members of the single currency bloc marking an improvement on the 6.2% recorded in 2010.
However, government debt levels for the eurozone were higher than previously reported, totalling 87.3% of GDP and not 87.2%. This compares to 85.4% in 2011. For the EU as a whole, debt increased from 80% in 2010 to 82.5% last year.
Only three EU member states registered budget surpluses in 2011 – Hungary (4.3%), Estonia (1.1%) and Sweden (0.4%), while low deficits were recorded in Luxembourg (0.3% of GDP), Finland (0.6%) and Germany (0.8%).
In total, 17 member states had deficits higher than the 3% of GDP formally considered ‘excessive’ under EU rules. Ireland’s deficit of 13.4% was the highest in Europe, followed by Greece and Spain which both ran a deficit of 9.4% of GDP.
The figure for Spain is considerably higher than the 8.5% originally reported by Eurostat. This is due to the reclassification of bailout funds injected by the Spanish government into the country’s banking sector and previously unrecorded bills that remained unpaid at the state and local government level.
Spain’s debt remains relatively low, however, totalling 69.3% of GDP in 2011. This compares favourably with other ‘periphery’ EU nations such as Greece (debt-to-GDP ratio of 170.6%), Italy (120.7%), Portugal (108.1%) and Ireland (106.4%). In total, 14 member states had government debt ratios at the end of 2011 that were higher than 60% of their GDP.
Estonia’s debt-to-GDP ratio of 6.1% was the lowest recorded in the EU, with Bulgaria (16.3%) and Luxembourg (18.3%) the only other EU nations whose debt levels were below 30% of GDP.
