Estonia Registers EU's Only State Budget Surplus

4/26/2011 4:50 PM
Category: Economy

By selling off its pollution quotas, Estonia managed to achieve a budgetary surplus in 2010, making it the only European Union country to end the year with a positive balance.

Last year's surplus amounted to 0.1 percent of GDP. However, the Ministry of Finance has forecasted that this year the country will rack up a budget deficit equivalent to 0.4 percent of GDP, which will grow to 2.8 percent in 2012. The country is most likely to reach a budget surplus again in 2015, according to the ministry.

One of the reasons for the predicted deficit is that the government plans to use the income from the pollution quotas in the near future, which will push up spending figures.

Out of the 27 European Union countries, 21 member states recorded an improvement in their government balance relative to GDP compared last year, while others saw it worsening.

Besides Estonia, only Sweden managed to balance its government budget, ending 2010 with an even 0.0 percent deficit.

The largest government deficit relative to GDP was the 32.4 percent recorded in Ireland, followed by Greece's 10.5 percent and the United Kingdom's 10.4 percent.

In 2010 the total government deficit of Eurozone countries relative to GDP fell from 6.3 percent to 6.0 percent, while the total for all EU countries dropped from 6.8 percent to 6.4 percent.

The three lowest ratios of government debt to GDP at the end of last year were recorded in Estonia (6.6 percent), Bulgaria (16.2 percent) and Luxembourg (18.4 percent).

In the Eurozone, the overall debt-to-GDP ratio increased from 79.3 percent recorded at the end of 2009 to 85.1 percent in 2010. Among the EU countries the total debt ratio grew from 74.4 percent to 80 percent.

 

Ingrid Teesalu


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