Government deficits in the EU, 2011. Large in Ireland, not too high in the Eurozone (2 graphs)
from Merijn Knibbe
Update: if you think that the third – fifth sentence is a hyperbole, well, it isn’t. Read this EU/ECB/IMF statement on Ireland.
Today, Eurostat published new data on EU government deficits, 2011. The implicit message could not be clearer. The ECB does not mind high deficits. The Irish deficit is the highest of the entire EU. But the ECB loves Ireland – as the money is ‘well spent’, i.e. used to bail out the banks. You don’t believe me? Look here and here for two speeches from a board member of the ECB who lauds the Irish example and emphasizes the importance of ‘bankaid’. And don’t tell me that this ECB guy did not have any idea about this high Irish 2011 deficit – he just did not care. Because the Irish do as they are told. By him.
Remarkable: the consolidated Eurozone deficit is, in a historical perspective, not really high and about half the size of the UK. USA of Japan one. Some tinkering with the quarterly data for the first three quarters (the fourth is not yet available) yields that the fourth quarter deficits is even less than 3%. At the same time, nobody talks about the end of the pound, the dollar or the Yen. But the break up of the Euro is a possibility… The Eurozone crisis really is a choice – and the troika (EU, IMF, ECB), dominated by the two banks, does not intend to waste it.
Hungary has the largest surplus and witnessed an amazing turnaround between 2010 and 2011 (from -4% to +4%) but this is caused, as far as I know (but I’m not a specialist) at least partly by the outright robbing of the pension funds. Government revenue went up with an unbelievable 7,2% of GDP in 2011. I don’t approve of such policies (understatement). But in Greece, Portugal and Spain the troika did about the same thing, robbing money from pensioners. And the Hungarian money at least stays home…
Remarkable: the rather small Italian deficit.