All 27 European Union (EU) countries ran budgetary deficits last year as their public finances significantly worsened due to the financial crisis, official figures showed Friday.
In 2009, Ireland, a country struggling with a troubled banking sector, recorded the largest budgetary deficit, which amounted to 14.4 percent of its gross domestic product (GDP), EU statistics office Eurostat said.
It was recently forecast that the Celtic Tiger would run a record high deficit of 32 percent of GDP this year, due to exceptional costs from a 45-billion-euro (63-billion-U.S.-dollar) bailout of five Irish banks.
But Eurostat delayed the release of Greek figures till November, waiting for a quality assessment of the country's statistical data.
Athens was also deep in the red and became the first EU country to plunge into a sovereignty debt crisis at the end of last year, triggering fears of contagion throughout the eurozone.
It was revealed previous Greek governments had manipulated national statistics to conceal the country's debt problem, which contributed to the sovereignty debt crisis and prompted the EU to tighten its oversight over national data.
Greece's deficit had been estimated at 13.8 percent of the GDP in 2009, but a further upward revision is widely expected. The Greek media reproted the revised figure would be 15.5 percent, even higher than Ireland's.
Besides Ireland and Greece, Britain, Spain and Latvia all recorded a budgetary deficit above 10 percent of the GDP last year, while Portugal, another EU country in the debt spotlight, had a deficit of 9.3 percent.
The EU's Stability and Growth Pact requires member states to keep their budgetary deficits below 3 percent of the GDP. By the end of 2009, only five EU countries, Luxembourg, Sweden, Estonia, Finland, Denmark and Germany, managed to meet the requirement.
Luxembourg posted the best record, running a deficit of 0.7 percent of GDP. Germany had a deficit of exactly 3 percent.
Among the 26 EU member states whose data were available, 24 recorded a worsening in their government deficit relative to the GDP in 2009 compared with 2008, and two, namely Estonia and Malta, registered an improvement.
The financial crisis also pushed up the public debt level of EU governments.
At the end of 2009, 11 EU member states had government debt ratios higher than 60 percent of the GDP, the maximum level allowed by EU rules.
Italy recorded the highest debt ratio, with public debt accounting for 116 percent of the GDP. France, Germany and Britain all exceeded the EU ceiling, while Estonia and Luxembourg had the lowest ratios of 7.2 percent and 14.5 percent respectively among their EU peers.
Following the outbreak of the sovereignty debt crisis, EU goverments have carried out austerity measures to consolidate public finances, which analysts fear may undermine a fragile economic recovery in Europe.
The EU also pushed for reforms to strengthen its fiscal discipline and prevent member states from overspending.
A task force composed of EU finance ministers and led by EU President Herman Van Rompuy published its final report on a new architecture of European economic governance on Thursday, under which budgetary sinners would face tougher sanctions from Brussels.
EU leaders were expected to adopt the report at a summit next week, paving way for legislative moves. |
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