The euro zone's aggregate budget deficit more than tripled last year because of the global economic crisis, wiping out some of the combined debt reduction achieved in the previous two years, data showed today.
European Union statistics office Eurostat revised up the deficit figure for the 16-country euro area to 2 per cent of gross domestic product from 1.9 per cent reported in April. The deficit in 2007 totalled 0.6 per cent of GDP.
Government debt in the euro zone rose to 69.3 per cent of GDP from 2007's 66 per cent.
For the entire European Union of 27 member states, the deficit last year totalled 2.3 per cent of GDP, up from 0.8 per cent in 2007 and debt rose to 61.5 per cent from 58.7 per cent.
Eurostat said the impact of government measures to support financial institutions hit by the crisis in 2008 had virtually no effect on deficits.
But it boosted debt, both in the euro zone and the EU, by 1.9 percentage points of GDP.
Contingent liabilities of governments in relation to supporting financial institutions last year amounted to €814.2 billion in the EU, or 6.5 per cent of GDP.
For the euro zone the figure came to €501 billion, or 5.4 per cent of GDP.
Reuters