Greece’s 2010 deficit worse than expected

Greece's budget deficit for 2010 was significantly larger than its government had previously estimated, dealing another blow to its attempts to bring its crisis-hit economy under control. The figure for last year was 10.5% of gross domestic product (GDP), according to figures published by Eurostat, the Commission's statistical office, on 26th April.

‘Accounting exercise'

The latest figures, although showing an improvement on 2009's 15.4% level, heap further pressure on the Athens government's attempts to improve the country's finances following last May's €110 billion bail-out from the EU and the International Monetary Fund (IMF). Under the conditions of the bail-out, Greece vowed to get its deficit to 7.6% in 2011 and below 3% by 2014.

Public debt

The figures also showed that public debt in Greece had increased to 142.8% of GDP in 2010, from 127.1% in 2009. Eurostat released its figures as part of its twice-yearly publication covering member states with excessive deficits. Portugal has also revised its 2010 deficit level upwards, to 9.1% of GDP compared with 8.6% announced previously.

Tuesday's figures from Eurostat show that the largest government deficits as a percentage of GDP were recorded in Ireland (32.4%) followed by Greece (10.5%), the United Kingdom (10.4%), Spain (9.2%) and Portugal (9.1%).

Ireland's large deficit – more than double the 14.3% level of 2009 – was attributed mainly to huge losses in the country's banking sector, which is now, largely, under state control.

The lowest deficits were recorded in Luxembourg (1.7%), Finland (2.5%) and Denmark (2.7%). Estonia registered a slight government surplus in 2010 (of 0.1%) and Sweden was in balance (0%).

Across the eurozone as a whole, government deficits decreased to an average of 6% of GDP in 2010, compared with 6.3% the year before. But government debt levels as a percentage of GDP increased during 2010 to 85.1% from 79.3%,

The debt figures, which show the government's total borrowing over time rather than the latest annual shortfall, showed Greece is in the worst situation, followed by Italy at 119% of GDP, and Belgium at 96.8%.