Brussels, 26/04/2011 (Agence Europe) - The drive to reduce public deficits is starting to pay off in both the eurozone and the EU as a whole, with deficits falling in 2010, despite an increase in debt levels, although the situation varies widely from one country to the next. The situation remains problematic in the three eurozone countries that have requested international aid (Greece, Ireland and Portugal), according to national public finance figures certified by the European Union's statistics office Eurostat and published on Tuesday 26 April 2011. A spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn commented that it is crucial to have totally reliable figures, given the difficult situation at the moment, adding that nothing very out of the ordinary had emerged during Eurostat's latest six-monthly round-up of debt and deficit figures. The way toxic assets are to be dealt with has been clarified, for example.
From 2009 to 2010, the average public deficit fell as a percentage of GDP from 6.3% to 6% in the eurozone and from 6.8% to 6.4% in the EU27. In 2010, the highest deficits were recorded in Ireland (32.4%), Greece (10.5%), the United Kingdom (10.4%), Spain (9.2%), Portugal (9.1%) and Poland and Slovakia (both 7.9%). Germany's deficit was 3.3% and France's 7%. Sweden's budget was in balance and Estonia had a slight budget surplus (0.1%).
The situation in greets was worse that forecast because in November 2010, Eurostat forecast a public deficit of 9.6% (see EUROPE 10266). Pointing out that from 2009 to 2010, Greece reduced its deficit more than any other eurozone country (by nearly 5%), the Greek government says the 2010 deficit was higher than expected because of a fall in tax income as a result of a worsening recession, worse local public finance and higher welfare and hospital spending. The government repeated its budget pledges set out in the austerity programme introduced in return for financial aid. A spokesperson for Olli Rehn said that not dealing with budget and economic adjustments would be far worse and although concerning, the figures marked an improvement. The spokesperson pointed out the benefits in terms of competitiveness, and the fact the privatisation round was due to net some é50 billion. Portugal's public deficit, 7.3%, is much higher than forecast by Eurostat in the autumn because motorway agreements had now been entered onto the books and this would be 'taken into account' in the aid negotiations with Portugal, explains Rehn's spokesperson. Public finance in Ireland has plummeted due to the latest bailout of the banks, but this hits the public accounts at a one-off.
Public debt. From 2009 to 2010, public debt by percentage of GDP rose in the EU27 and the eurozone from 74.4% to 80% and from 79.3% to 85.1% respectively. The most indebted countries are Greece (142.8%), Italy (119%), Belgium (96%), Ireland (96.2%), Portugal (93%), Germany (83.2%) and France (81.7%). The least indebted are Estonia (6.6%), Bulgaria (16.2%) and Luxembourg (18.4%). (M.B./transl.fl)