Eurozone crisis states post worse-than-estimated deficits

Eurozone states hardest hit by the debt crisis posted worse deficits in 2011 than previously estimated, according to European Union statistics released Monday. Spain's deficit stood at 9.4 per cent of gross domestic product (GDP) in 2011, according to Eurostat, 0.9 percentage points higher than estimates published in April.
Spain, which is in line to receive aid for its banking sector, is struggling to meet this year's deficit target of 6.3 per cent. Madrid will find out where it stands on November 7, when the European Commission will publish its growth estimates for 2012.
Simon O'Connor, a spokesman for EU Economy Commissioner Olli Rehn, said Spain's 2012 estimates would likely be bloated by losses incurred by banks, which had already been factored in to this year's targets.
"The commission recognises the essentially unavoidable and one-off nature of these expenses, and so of course we will fully take into account those ... factors when it comes to assessing whether or not Spain has taken effective action to correct its deficit," O'Connor said.
Meanwhile, Greece's 2011 deficit stood at 9.4 per cent of GDP, compared to an earlier estimate of 9.1 per cent. The country's overall debt was 170.6 per cent, compared to a previously estimated 165.3 per cent. Athens is under pressure to cut its debt to 120 per cent of GDP by 2020.
Portugal's 2011 deficit stood at 4.4 per cent, 0.2 percentage points higher than the previous estimate. Ireland's deficit was also 0.3 percentage points worse than estimated in April, at 13.4 per cent, while Italy's deficit remained at 3.9 per cent of GDP. The eurozone's average 2011 budget deficit fell to 4.1 per cent of GDP in 2011, down from 6.2 per cent in 2010, while the 27-member EU saw its average deficit fall to 4.4 per cent, down from 6.5 per cent.
Only 10 EU member states had managed to bring their deficits below an ultimate EU-set target of 3 per cent of GDP, according to Eurostat. Eurozone debt rose, meanwhile, to 87.3 per cent of GDP, up from 85.4 per cent a year earlier, while overall EU debt rose to 82.5 per cent of GDP, up from 80 per cent in 2010. Hungary, Estonia and Sweden registered surpluses of 4.3 per cent, 1.1 per cent and 0.4 per cent of GDP respectively, while the lowest deficits were recorded in Luxembourg (0.3 per cent), Finland (0.6 per cent) and Germany (0.8 per cent). Monday's figures were based on revised data released by member states and took into account bank restructuring and nationalisation programmes in Ireland and Britain.