Twelve EU Members Breached Stability Pact Terms Last Year

by Ulrika Lomas, for LawAndTax-News.com, Brussels

28 September 2005

Figures released this week by Eurostat, the European Union's statistical office, have revealed that twelve EU member states last year breached the 3% of GDP ceiling imposed for budget deficits by the Stability and Growth Pact.

Eurostat announced that in 2004, the largest government deficits in terms of GDP percentages were recorded by Greece (-6.6%), Hungary (-5.4%), Malta (-5.1%), and Cyprus (-4.1%).

It further revealed that another eight Member States had recorded a government deficit over or equal to 3% of GDP: 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%).

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%).

The Eurostat figures went on to explain that overall, government deficits in the EU decreased from 3.0% in 2003 to 2.6% last year.

An attempt by the German government to massage its economic performance by including the sale of outstanding accounts to Germany's formerly state owned telecom and postal operations was rejected by the statistical office, meaning that the country's deficit is predicted to hit 4% of GDP this year.

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