France, Spain remain eurozone deficit sinners | Business| Economy and finance news from a German perspective | DW | 22.04.2013
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France, Spain remain eurozone deficit sinners

The 17-member eurozone has increased efforts to rein in public debt, but many member countries have failed to meet deficit targets. European statisticians said France and Spain posted alarming figures for last year.

France and Spain amassed more debt than they were supposed to in 2012, the EU statistics agency, Eurostat, reported Monday.

Eurostat reported that France's deficit last year amounted to 4.8 percent of gross domestic product (GDP) instead of the 4.5 percent envisaged by the EU executive. Spain for its part logged a 10.6 percent deficit, failing to meet the European Commission's 10.2 percent target.

Analysts expect Brussels to now give the two eurozone economies more time to bring down their debt levels. EU member states are mandated to keep their deficits below 3 percent of GDP and potentially face sanctions if they do not comply.

Model pupil Germany

The EU executive realized, however, that previous and current austerity measures in the crisis-stricken nations in southern Europe have had a devastating impact on their growth prospects. Additional cost-cutting measures, it said, would further cripple economic expansion.

Eurostat reported that Greece was also among the eurozone nations with the highest deficits. Debt levels increased to 10 percent in 2012, much more than the European Commission had penciled in for the bailout recipient in its last forecast in February.

Despite negative developments in many eurozone countries, the 17-member bloc as a whole managed to reduce its deficit to 3.7 percent, down from 6.4 percent at the height of the global financial crisis back in 2009. Germany played a decisive role in that, with the European powerhouse logging a 0.2 percent surplus last year.

hg/mkg (Reuters, dpa)