Greek deficit, debt better than expected in 2015, new data shows

Greece's public deficit and debt were lower than expected in 2015, new data released Thursday showed, as the crisis-battered country is locked in bailout negotiations with its international creditors.

The two sides are trying to agree on reforms and cost-cutting measures that will allow aid to keep flowing from Greece's third, 86-billion-euro (97-billion-dollar) bailout. Eurozone finance ministers are due to review progress at talks in Amsterdam on Friday.

Considerable differences remain between Athens and its creditors over issues such as tax reforms and pension cuts, Greek sources said Thursday. The measures being considered reportedly amount to 5.4 billion euros in cost savings.

Greece's public deficit shot up to 7.2 per cent of gross domestic product (GDP) in 2015, from 3.6 per cent the year before, according to the EU statistics agency Eurostat. But the increase was smaller than the European Commission had feared.

The European Union's executive, which is also one of Greece's creditors, had predicted in February that the 2015 deficit would reach 7.6 per cent. The country had initially been supposed to bring its deficit down to the EU-mandated level of 3 per cent this year.

Greece's primary surplus - the difference between revenues and expenditures, excluding interest payments - is now expected to have reached 0.7 per cent in 2015, which is "substantially better" than its bailout target, commission spokeswoman Annika Breidthardt said.

Greece's 2015 debt level also came in lower than expected at 176.9 per cent of GDP, down from 180.1 per cent in 2014. The commission had expected it to reach 179 per cent last year.

Greece still has, however, the highest debt in the EU. Next in line are Italy at 132.7 per cent and Portugal at 129 per cent, according to Eurostat, which published its 2015 debt and deficit figures for the EU's 28 member states on Thursday.

Under EU rules, countries are not supposed to accrue more than 60 per cent of GDP in debt.

France, Portugal and Spain have also been under close EU scrutiny because of their public finances.

Spain has the eurozone's fourth-largest economy, which it managed to rev up after having benefited from a 41-billion-euro bailout for its troubled banking sector. But Madrid has long struggled to stick to deficit targets.

Its shortfall came in at 5.1 per cent last year, Eurostat said - above the 4.8 per cent expected by the commission. The country, which has been struggling to form a new government, was originally supposed to whittle its deficit down to 3 per cent this year.

Spain's neighbour, Portugal, has also faced EU pressure. The Portuguese economy returned to growth in 2014, three years after receiving a 78-billion-euro international bailout. There have since been some calls in the country for less austerity.

But its deficit last year exceeded commission expectations, coming in at 4.4 per cent instead of 4.2 per cent.

The French economy, meanwhile, has been weighed down by sluggish growth and poor competitiveness. But its deficit dropped more than expected in 2015, coming in at 3.5 per cent, Eurostat said. France has the second-largest economy in the eurozone.

Last update: Fri, 24/06/2016 - 08:49
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