All 12 euro zone countries posted a decline in net debt expressed as a percentage of GDP, but only Ireland and the Netherlands achieved real reductions in outstanding debt.
Euro zone governments posted a collective budget surplus in 2000 thanks to extraordinary windfalls from the sale of third generation (UMTS) mobile phone licences, Eurostat said today.
Stripping out the impact of the licence sales, the bloc was still in deficit to the tune of 0.8 per cent of gross domestic product, down from a deficit of 1.2 per cent in 1999.
The European Commission and European Central Bank have both warned recently that euro zone governments did not make the most of strong growth last year to consolidate public finances and reduce debt.
ECB President Mr Wim Duisenberg told the European Parliament last week that persistent deficits could pose a threat to price stability in the euro zone if growth remains above trend, as the ECB currently expects.
Eurostat said mobile phone licence sales last year had a particularly large impact on public finances in Germany and Italy, equivalent to respectively 2.5 per cent and 1.2 per cent of GDP.
Including UMTS revenues, Germany posted a 1.3 per cent budget surplus after a 1.4 per cent deficit in 1999, while the country's net debt declined to 60.2 per cent of GDP from 61.1 per cent.
Including the phone sale proceeds, Italy posted a deficit of 0.3 percent of GDP, down from 1.8 percent of GDP. Its debt fell to 110.2 per cent of GDP from 114.5 per cent.