EMU: EURO-ZONE BUDGET DEFICITS DOWN 0.3% IN 2004 BUT DEBT RATIOS UP 0.4%.

Deficits.

On the Eurostat league table, the largest budget deficits were recorded by Greece (-6.6%), Hungary (-5.4%), Malta (-5.1%), and Cyprus (-4.1%). Another eight member states recorded a government deficit over or equal to the 3%-of-GDP reference value set in the Maastricht Treaty: Poland (-3.9%), Germany ( -3.7%), France ( -3.6%), Italy ( -3.2%), Slovakia ( -3.1%), the United Kingdom (-3.1%), the Czech Republic (-3.0%) and Portugal (-3.0%).

Surpluses.

At the other end of the scale, six member states continued to register a government surplus in 2004: Denmark (+2.3%), Finland (+2.1%), Estonia (+1.7%), Sweden (+1.6%), Ireland (+1.4%) and Belgium (+0.0%). Eurostat notes that over the 2003/2004 accounting period, sixteen member states recorded an improved public balance, while eight Member States registered a worsening.

Debt.

Eurostat notes that government expenditure in the euro-zone in 2004 was equivalent to 48.1% of GDP, and government revenue to 45.4% (47.6% and 45.0% respectively for the EU25). Between 2003 and 2004, both public expenditure and government revenue declined relative to GDP in the euro-zone and EU25. Notwithstanding, several member states stand out. The lowest ratios of government debt to GDP (reference value of 60%) were recorded in Estonia (5.5%), Luxembourg (6.6%), Latvia (14.7%) and Lithuania (19.6%). At the other extreme, eight member states exceeded the reference value, sometimes by a considerable margin: Greece (109.3%), Italy (10 6.5%), Belgium (95.7%), Malta (75.9%), Cyprus (72.0%), Germany (66.4%), France (65.1%) and Austria (64.3%).

Three reservations.

Once again, Eurostat expresses reservations regarding the quality of some of the data sent in by several member states. In the Czech Republic, the deficit calculated for 2003 may be lower than the figure published thus far owing to the recording as a capital transfer in 2003...