All euro nations bring budget deficits under EU limit in 2007.
All 15 nations that use the euro brought their yearly budget deficits under an EU limit last year, the bloc's statistical agency Eurostat said Friday, as European governments reaped tax windfalls from the recent economic boom.
That puts the euro area -- with a joint deficit of 0.6 percent -- in good shape as growth winds down this year on the U.S. slowdown and a banking crisis that limits investments and makes it harder for businesses and home buyers to get credit.
EU spokeswoman Amelia Torres said the provisional figures showing lower government debt were the best in living memory and offered "a certain degree of reassurance" as the global economy hits stormy weather.
Italy and Portugal -- the two euro nations that had run deficit above the EU limit of 3 percent of gross domestic product -- fell under the EU maximum in 2007, Eurostat said. Italy reported a budget deficit of 1.9 percent -- down from 3.4 percent in 2006, thanks to a vigorous debt-cutting effort by the government of outgoing Prime Minister Romano Prodi.
The country's overall debt is still the highest in the European Union at 104 percent of GDP. EU officials have urged Rome to tackle this, warning that it is spending large sums of public money to service this borrowing. Portugal also has drafted tight spending curbs to bring its deficit down to 2.6 percent from 3.9 percent the previous year.
All euro nations are asked to keep to European Union budget rules to try and keep their shared currency stable. Last year, they struck an informal deal to eliminate budget deficits by 2010 -- a goal Italy and France have warned they may have to delay. France is still close to the EU limit, running a deficit of 2.7 percent in 2007, higher than the 2.4 percent it reported a year earlier, as it tries cutting taxes to trigger growth and create more jobs.
Greece, too, is sailing close to the limit at 2.8 percent, with statistical checks still continuing on how Athens should count EU grants, spending outside the central government's control and the country's vast black market. Overall debt remains high. The largest euro economy, Germany, eliminated its budget deficit, reporting 0 percent from 1.6 percent in 2006.
There was good news for euro-wannabe Slovakia, where the deficit also came under the limit at 2.2 percent from 3.6 percent a year earlier. This was an essential precondition for its bid to adopt the euro next year. EU officials also will take inflation into account when they decide next month if Slovakia can become the 16th euro nation.
Outside the core group of euro countries, EU nations are asked to keep to the 3 percent ceiling, but face few sanctions if they fail to. Hungary is running the largest budget deficit in the European Union at 5.5 percent -- but a massive reduction from 9.2 percent in 2006. Overall debt, however, increased slightly.
Britain's deficit for the calendar year 2007 is the next highest at 2.9 percent, up from 2.6 percent a year earlier. However, the British Treasury reports its accounts for the fiscal year ending April 2007 -- when the deficit was 2.6 percent -- so it will likely escape any EU criticism.
All 15 nations that use the euro brought their yearly budget deficits under an EU limit last year, the bloc's statistical agency Eurostat said Friday, as European governments reaped tax windfalls from the recent economic boom.
That puts the euro area -- with a joint deficit of 0.6 percent -- in good shape as growth winds down this year on the U.S. slowdown and a banking crisis that limits investments and makes it harder for businesses and home buyers to get credit.
EU spokeswoman Amelia Torres said the provisional figures showing lower government debt were the best in living memory and offered "a certain degree of reassurance" as the global economy hits stormy weather.
Italy and Portugal -- the two euro nations that had run deficit above the EU limit of 3 percent of gross domestic product -- fell under the EU maximum in 2007, Eurostat said. Italy reported a budget deficit of 1.9 percent -- down from 3.4 percent in 2006, thanks to a vigorous debt-cutting effort by the government of outgoing Prime Minister Romano Prodi.
The country's overall debt is still the highest in the European Union at 104 percent of GDP. EU officials have urged Rome to tackle this, warning that it is spending large sums of public money to service this borrowing. Portugal also has drafted tight spending curbs to bring its deficit down to 2.6 percent from 3.9 percent the previous year.
All euro nations are asked to keep to European Union budget rules to try and keep their shared currency stable. Last year, they struck an informal deal to eliminate budget deficits by 2010 -- a goal Italy and France have warned they may have to delay. France is still close to the EU limit, running a deficit of 2.7 percent in 2007, higher than the 2.4 percent it reported a year earlier, as it tries cutting taxes to trigger growth and create more jobs.
Greece, too, is sailing close to the limit at 2.8 percent, with statistical checks still continuing on how Athens should count EU grants, spending outside the central government's control and the country's vast black market. Overall debt remains high. The largest euro economy, Germany, eliminated its budget deficit, reporting 0 percent from 1.6 percent in 2006.
There was good news for euro-wannabe Slovakia, where the deficit also came under the limit at 2.2 percent from 3.6 percent a year earlier. This was an essential precondition for its bid to adopt the euro next year. EU officials also will take inflation into account when they decide next month if Slovakia can become the 16th euro nation.
Outside the core group of euro countries, EU nations are asked to keep to the 3 percent ceiling, but face few sanctions if they fail to. Hungary is running the largest budget deficit in the European Union at 5.5 percent -- but a massive reduction from 9.2 percent in 2006. Overall debt, however, increased slightly.
Britain's deficit for the calendar year 2007 is the next highest at 2.9 percent, up from 2.6 percent a year earlier. However, the British Treasury reports its accounts for the fiscal year ending April 2007 -- when the deficit was 2.6 percent -- so it will likely escape any EU criticism.
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