Euro Area and EU Government Deficit at 2.1% and 2.4% of GDP

Last year saw the deficits ratcheted up by the euro area and the whole of the European Union (EU) decrease compared to 2014, according to latest figures from Eurostat.

In the euro area, debts fell by 0.5% from the 2.6% figure that was recorded for 2014, and the EU saw a reduction in its debt by 3% down to 2.4%.

The amount of government debt to GDP ratio declined in the euro area from 92% at the end of 2014, to 90.7%.

In a similar pattern, the EU also celebrated a fall in arrears, down to 85.2% at the end of last year, a reduction of 1.6% year on year.

The largest government surpluses were found in Luxembourg on 1.2%, Germany 0.7% and Estonia  0.4%, while Sweden recorded a balance on their finances of 0%.

There were seven member states had deficits equal to or higher than 3% of GDP, with Greece registering the most damaging deficit of  minus 7.2%.

They were followed by Spain on minus 5.1%, Portugal and the United Kingdom on minus 4.4% each, France minus 3.5%, Croatia minus 3.2%, and Slovakia on a negative of 3%.

In total, government expenditure in the euro area equated to 48.6% of GDP, and 46.6% as a ratio of government revenue.

 

For the EU, their spending was 47.4%  and 45% of GDP and government revenue respectively

In both zones, the government expenditure, and government revenue ratios decreased between 2014 and 2015.

Euro Falls Against the US Dollar Ahead of ECB Meeting

The euro has began the day falling against the US dollar, as the markets await the decisions made by the ECB Governing Council, at their latest policy meeting in Frankfurt today.

Currently the EUR/USD rate is $1.129 CET, and the euro has not managed to break through the $1.13 barrier this morning, and has depreciated from purchasing $1.138 early yesterday afternoon.

Predictions over what the council meeting will decide has ranged from the expectation that no major policy decisions will be made, to a possible hint of a rate rise from ECB President Mario Draghi, that is according to Frederik Ducrozet, senior economist at Banque Pictet, the Swiss private bank.

In their daily forex round up LMAX Exchange has opined that the euro has suffered a downturn due to pre-event risk positioning,  demand for higher yield currencies, and upbeat US existing home sales.

The GBP/USD rate has continued to favour the greenback, with sterling falling to buying $1.43, reduced from $1.44 from yesterday afternoon.

Manufacturing Business Climate Recovers in France

The National Institute of Economic Studies in France, has revealed that a survey of business managers in the manufacturing industry, concluded that the business climate in the sector has recovered.

For April, the composite indicator from the survey is now 104, four points above the indicator average of 100.

There was a similar improvement in mood, amongst business managers in the building construction industry.

The composite indicator in this survey for April is 94, below the average score of 100, but this is an increase of two points.