Fabian Demicoli

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%.

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