The European Union: Prodi faces other end of EU budget stick
Prodi, a former European Commission chief who is struggling to form a stable cabinet after a narrow poll victory over Silvio Berlusconi, will now face the wrong end of the budget stick he used to wield in Brussels.
Public debt also increased across the 25-member European Union, up from 69.8 percent of gross domestic product in 2004 to 70.8 percent last year in the 12-nation eurozone, and from 62.4 percent to 63.4 percent of GDP in the 25-member EU. But overall the average deficit in the eurozone fell from 2.8 percent in 2004 to 2.4 percent in 2005, and in the EU from 2.6 percent to 2.3 percent, according to the figures by the EU’s Eurostat data agency. “This is obviously good news”, said Amelia Torres, spokeswoman for EU Economic and Monetary Affairs Commissioner Joaquin Almunia. “The situation is improving”, she added, noting that 18 EU countries “have improved their government account situation, by either reducing the deficit or increasing the surplus they had”. But at least seven states -- including heavyweights Germany, Britain and Italy -- remained above the three-percent bar for public deficits set out by the Stability and Growth Pact, the fiscal rule book for countries sharing Europe’s single currency. Nevertheless, Britain is not a member of the 12-state eurozone. Germany, Europe’s biggest economy, ran a deficit of 3.3 percent, while Italy’s stood at 4.1 percent. Hungary was on 6.1 percent, Portugal 6.0 percent, Greece 4.5 percent, Britain 3.6 percent and Malta 3.3 percent.
Eurostat also confirmed France’s 2005 public deficit as 2.9 percent of GDP, just below the 3.0 percent limit.
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