Eurozone debt soars, but fresh borrowing decreases | Business| Economy and finance news from a German perspective | DW | 23.04.2012
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Eurozone debt soars, but fresh borrowing decreases

Fresh borrowing in the 17-strong euro area has eased. The EU statistics office views this as a sign that austerity measures across the zone are starting to have an impact. But the overall debt load remains alarming.

Fresh borrowing in the bloc of 17 nations using the euro currency dipped to 4.1 percent of gross domestic product (GDP) in 2011, the EU statistics office, Eurostat, reported on Monday.

The Luxembourg-based authority said it was a marked improvement from 2010 levels when the figure was still 6.1 percent of GDP. However, the overall debt load in the euro area rose to 87.2 percent in 2011, up from 85.3 percent in the previous year. The data provided by Eurostat reveal a very heterogeneous picture of the bloc's recent developments.

Topping the table of borrowers last year was Ireland which reported a public deficit of a staggering 13.1 percent. That's more than four times the EU limit. Under the Maastricht Treaty, eurozone countries are supposed to run public deficits of no more than 3.0 percent of GDP.

Greece another problem child

Runner-up was Greece, which logged a deficit of 9.1 percent in 2011, down from 10.3 percent the year before. The national debt grew to 355.6 billion euros ($468.7), the Greek Statistics Authority confirmed on Monday. That's the equivalent to 165.3 percent of GDP, with the EU's limit being 60 percent of output.

Greek conservative leader Antonis Samaras once again criticized the terms of the bailout for his country, saying he would cut taxes and increase social spending, should he win the May 6 national election.

"Our economic plan's priorities are growth and recovery," Samaras said in a statement in Athens. "The bailout terms underestimate the severity of the recession in Greece, and without growth the economy will collapse."

Taking third position in Eurostat's list of big 2011 borrowers is Spain with a budget deficit of 8.5 percent. Germany, Europe's economic powerhouse, only posted a deficit of 1.0 percent last year and aims to come up with a next-to-balanced budget by 2014.

hg/gb (dpa, dapd, AFP)