Ireland surges past Greece into first place for 2009 European fiscal deficits.
In 2009 the largest government deficits in percentage of GDP were recorded by Ireland (-14.3%), Greece (-13.6%) the United Kingdom (-11.5%), Spain (-11.2%), Portugal (-9.4%), Latvia (-9.0%), Lithuania (-8.9%), Romania (-8.3%), France (-7.5%) and Poland (-7.1%). No Member State registered a government surplus in 2009. The lowest deficits were recorded by Sweden (-0.5%), Luxembourg (-0.7%) and Estonia (-1.7%). In all, 25 Member States recorded a worsening in their government balance relative to GDP in 2009 compared with 2008, and two (Estonia and Malta) an improvement
This is an increase on the government’s original 11.7% estimate – primarily due to the reclassification of bank capitalisation measures.
Ireland had its budget deficit revised even more — to 14.3 percent from the initially reported 11.7 percent. Irish Finance Minister Brian Lenihan said this was a result of a technical reclassification associated with government support provided to the banking sector.
“It is important to note that the underlying 2009 general government deficit for Ireland is 11.8 percent of GDP, which is broadly similar to that projected in December’s budget,” he said.
“There is no additional borrowing associated with this technical reclassification. This is a once-off impact, and will not affect the government’s stated budgetary aim of reducing the deficit to below 3 percent of GDP by 2014,” Lenihan said.
In the markets the Greek 10 year bond spiked upwards to 8.64%, while the Irish 10 year note hit 4.75%. While we overtook Greece technically in terms of the fiscal deficit, Greece continues to hold the position of chief whipping boy in the international press and markets.
The European Union said Greece’s budget deficit last year was worse than previously forecast and may top 14 percent of gross domestic product, fueling investor concern about a default and sending its bond yields soaring.