In 2008, the government deficit and government debt of both the euro area (EA16) and the EU27 increased compared with 2007. In the euro area the government deficit to GDP ratio increased from 0.6% in 20073 to 1.9% in 2008, and in the EU27 it increased from 0.8% to 2.3%. In the euro area the government debt to GDP ratio increased from 66.0% at the end of 2007 to 69.3% at the end of 2008, and in the EU27 from 58.7% to 61.5%.

In 2008 the largest government deficits in percentage of GDP were recorded by Ireland (-7.1%), the United Kingdom (-5.5%), Romania (-5.4%), Greece (-5.0%), Malta (-4.7%), Latvia (-4.0%), Poland (-3.9%), Spain (-3.8%), France (-3.4%), Hungary (-3.4%), Lithuania (-3.2%) and Estonia (-3.0%). Seven Member States registered a government surplus in 2008: Finland (+4.2%), Denmark (+3.6%), Luxembourg (+2.6%), Sweden (+2.5%), Bulgaria (+1.5%), the Netherlands (+1.0%) and Cyprus (+0.9%). In all, five Member States recorded an improved government balance relative to GDP in 2008 compared with 2007, 21 a worsening and one remained unchanged.

At the end of 2008, the lowest ratios of government debt to GDP were recorded in Estonia (4.8%), Romania (13.6%), Bulgaria (14.1%), Luxembourg (14.7%) and Lithuania (15.6%). Nine Member States had government debt ratios higher than 60% of GDP in 2008: Italy (105.8%), Greece (97.6%), Belgium (89.6%), Hungary (73.0%), France (68.0%), Portugal (66.4%), Germany (65.9%), Malta (64.1%) and Austria (62.5%).

In 2008, government expenditure in the euro area was equivalent to 46.6% of GDP and government revenue to 44.7%. The figures for the EU27 were 46.8% and 44.5% respectively. In both zones, the government expenditure ratio increased between 2007 and 2008, while the government revenue ratio decreased.

Reservations on reported data

Denmark: During 2008 the Danish authorities nationalised the Roskilde Bank and established a vehicle for bank rescues (AFS-Afviklingsselskabet). These bodies have been classified as financial corporations in the reported Danish data. Eurostat is investigating these cases.

United Kingdom: Eurostat has withdrawn the reservation on the data reported by the United Kingdom in the October 2008 notification (News release 147/2008 of 22 October) following a clarification that the Bank of England lending to Northern Rock was undertaken under the direction of the UK tripartite authorities (HM Treasury, the Bank of England, the Financial Services Authority).

From April 2008 the United Kingdom government provided 185 billion GBP of treasury bills to the Bank of England for use in the Special Liquidity Scheme. These bills are not currently recorded as part of United Kingdom government debt. Eurostat is considering the appropriate treatment of these bills, and whether or not they should be statistically included as part of United Kingdom government debt.

Amendment by Eurostat to reported data

United Kingdom: Eurostat has amended the deficit data notified by the United Kingdom for the years 2005 to 2008 for consistency of recording of UMTS licences proceeds in 2000. This leads to an increase in the government deficit in 2005, 2007 and 2008 (as well as for financial year 2004/2005, 2005/2006 and 2007/2008) by 1044 mn GBP (0.1% of GDP) and in 2006 (financial year 2006/2007) by 1045 mn GBP (0.1% of GDP). There is no change in the reported debt figures.