Business | Economy
Euro zone deficit more than halves in 2007
Germany made the biggest cut of 1.6% but France's deficit increased to 2.7% despite government measures.
- Reuters
- Published: 00:33 April 19, 2008
Brussels: Euro zone government deficit more than halved last year and debt fell too, data showed on Friday, with all countries sharing the single currency below the European Union ceiling of three per cent of gross domestic product.
Government deficit in the 15 countries now using the euro fell to 0.6 per cent of GDP in 2007 from 1.3 per cent in 2006 and debt declined to 66.3 per cent from 68.4 per cent.
Germany, the euro zone's biggest economy, made the biggest deficit cut of 1.6 percentage points, bringing its public finances into balance well ahead of the 2010 deadline agreed by euro zone finance ministers.
Italy slashed its shortfall by 1.5 percentage points to 1.9 per cent of GDP in 2007 and Portugal reduced its deficit by 1.3 percentage points to 2.6 per cent.
European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said last week that as a result of these improvements, the European Commission would propose on May 7 an end to EU disciplinary budget action against Rome and Lisbon.
But the French deficit increased to 2.7 per cent from 2.4 per cent despite government plans to cut it to 2.3 per cent. Public debt in France, the euro zone's second-biggest economy, rose to 64.2 per cent from 63.6 per cent.
Greece saw its deficit widen to 2.8 per cent from 2.6 per cent and Belgium moved from a 0.3 per cent surplus to a 0.2 per cent deficit.
In the whole European Union of 27 countries, government deficit fell to 0.9 per cent of GDP from 1.4 per cent and debt dipped to 58.7 per cent from 61.2 per cent.
Hungary was the only EU member with a deficit higher than the bloc's 3 per cent ceiling and thus the only country likely to remain under the EU's disciplinary budget procedure.
Nevertheless, Hungary's deficit fell to 5.5 per cent of GDP last year from 9.2 per cent in 2006.
The data showed the Commission should also end the disciplinary procedure against Poland, the biggest of the 12 mostly ex-communist countries that joined the EU in 2004 and 2007, and Slovakia, which wants to adopt the euro next year.
Share this article
Popular in Business
-
Global Village
A world of fun
Revamped layout featuring four cultures to greet visitors this season
Business Editor's choice
-
India's economic growth rockets
Smashes expectations, adding pressure to raise interest rates
-
No regrets as shoppers cut holiday gift lists
Many Americans are not buying for co-workers and extended family this year
-
Emirates expects profits to cross $1b
Official confident Dubai World will tackle challenge
