EMU deficit European Union falls 0.3 percent

The Dutch EMU deficit over 2004 amounts to 10.7 billion euro, equivalent to 2.3 percent of GDP. Thus the deficit complies again with the European deficit norm of 3 percent.

On 31 December 2004 the Dutch EMU debt was 55.2 percent of GDP. Hence the debt-to-GDP ratio also satisfied the EMU debt norm of 60 percent.

EMU deficit in European Union at 2.6 percent

The EMU deficit of the countries together forming the European Union amounts to 2.6 percent in 2004 and drops by 0.3 percentage points compared with 2003. Remarkably, the Eurozone deficit in 2004 exceeds the weighted average of the EU as a whole: -2.7 percent.

In Greece and Italy the EMU deficit deteriorated compared to 2003, in Italy only by one tenth percent but in Greece the deficit increased from 5.2 percent in 2003 to 6.1 percent in 2004. The other EU countries managed to keep the national deficit within acceptable boundaries in 2004. The Czech Republic in particular performed well. In this country, which only recently joined the EU, the deficit dropped from 11.7 percent in 2003 to 3.0 percent in 2004.

EMU debt and EMU deficit, 2004

EMU debt and EMU deficit, 2004

Various countries overstep the EMU norm

The EMU debt of the 25 EU member states increased by 0.5 percentage points of the GDP in 2004. The 2004 debt-to-GDP ratio reached 63.8 percent. The EMU debt of the former EU 15 is higher: 71.3 percent. Thus both the EU 15 and the EU 25 exceed the EU norm of 60 percent. Greece (110.5 percent), Italy (105.8 percent) and Belgium (95.6 percent) amply exceeded the EMU debt norm, but Malta (75.0 percent), Cyprus (71.9 percent), Austria (65.2 percent), Germany (66.0 percent), France (65.6 percent) and Portugal (61.9 percent) also overstepped the norm in 2004.

EMU debt and EMU deficit, 2003

EMU debt and EMU deficit, 2003

Eleven EU countries comply with both EMU norms

Only eleven out of the current 25 EU countries meet both EMU criteria, i.e. they meet the 3 percent budget deficit norm and the debt-to-GDP ratio does not exceed 60 percent. Four of the countries to meet both EMU criteria joined the EU on 1 May 2004, namely Estonia, Latvia, Lithuania and Slovenia. Six EU member states of the former EU 15, i.e. Denmark, Finland, Ireland, Luxembourg, Spain and Sweden also complied with both criteria. In 2004 the Netherlands rejoined the group which satisfied both EMU criteria.

Melanie Koymans