The euro area’s deficit slipped to 3.2 percent of GDP in the first quarter of this year, eight‑tenths below the level seen in late 2023, while public debt rose by five tenths to 88.7 percent, according to Eurostat data published on Monday. The wider European Union saw the deficit ease from 3.9 percent in the last quarter of 2023 to 3.0 percent between January and March this year, and the bloc’s debt increased from 81.5 percent to 82 percent.
In the euro area, total revenues decreased from 46.7 percent of GDP in Q4 2023 to 46.2 percent at the start of this year, a fall of 2.0 billion in absolute terms, while public spending stood at 49.4 percent of GDP, more than one percentage point lower than at the end of the previous year, a cut of 31.0 billion. Public revenues across the EU as a whole dropped three tenths between January and March, to 45.9 percent of GDP, while total expenditure also declined from 50.1 percent of GDP in late 2023 to 48.9 percent in the first quarter of this year.
By country, the members with the highest public deficits in the first three months of the year were Romania at 7 percent, Hungary at 6 percent, France and Bulgaria at 5.6 percent, Slovakia at 5 percent, and Belgium at 4.5 percent. On the flip side, Denmark posted a 3.8 percent surplus, Ireland 1.6 percent, Portugal 0.6 percent, and Lithuania 0.1 percent. Spain’s deficit matched the euro area average and was two tenths of a percentage point above the EU average at 3.2 percent.
Debt levels rise again
Meanwhile, euro area debt reached 88.7 percent of GDP at the end of the first quarter, up five tenths from the end of 2023. In the EU overall, debt also climbed by five tenths to 82 percent.
Debt instruments accounted for the largest share of holdings in both the euro area and the EU, at 83.9 percent and 83.4 percent respectively. This was followed by loans at 13.6 and 14 percent, currencies and deposits at 2.6 percent in both regions, and cross‑border loans between member states at 1.4 percent and 1.2 percent.
The highest debt ratios in the first quarter were observed in Greece at 159.8 percent, Italy at 137.7 percent, France at 110.8 percent, Spain at 108.9 percent, and Belgium at 108.2 percent. The lowest debt burdens were in Bulgaria at 22.6 percent, Estonia at 23.6 percent, and Luxembourg at 27.2 percent.
Between January and March this year, twelve EU member states increased their debt relative to the end of 2023, while fourteen reduced it and one held steady (Ireland). The most notable increases occurred in Slovakia with 4.6 percentage points, Estonia with 4.0 points, Belgium with 3.1 points, Romania with 2.8 points, Hungary with 2.5 points, and Austria with 2.1 points. The largest cuts were in Greece at 2.1 points, followed by Cyprus and the Netherlands at 1.2 points each, Sweden and Ireland at 0.8 points, Bulgaria by half a percentage point, and Germany by 0.2 points.