EU Governments Gradually Tame Financial Problems

{{New figures from the European Commission show that EU governments are gradually making progress with their financial problems.}}

The budget deficit – the amount of new borrowing they undertake – came down last year.

For the whole EU, it fell from 3.9% of GDP in 2012 to 3.3%. For the eurozone, the decline was from 3.7% to 3%.

But they are still borrowing substantial amounts, so the total accumulated debt continued to rise.

That pattern affected both the eurozone and the European Union as a whole.

The eurozone figure is in line – just – with the upper limit that the EU expects member countries to meet.

Of course, there was a wide variation within the eurozone, with some countries borrowing a lot less than maximum.

Germany’s government finances were close to being balanced: no new borrowing. Luxembourg managed a small surplus, which means it reduced its government debt slightly.

Others still couldn’t comply with the 3% of GDP limit. France and Spain were the two big economies that went over that level, while Italy was just in line with it.

The figures for Greece tell an interesting story. A casual look suggests they got worse. But going beneath the surface, that was due to the costs of propping up the banks, a cost that isn’t repeated year after year. Take that out of the picture and the figures look a good deal better.

{BBC}