Eurozone and European Union nations slashed their budget deficits in 2005 but government debt figures showed an increase, DPA QUOTED the EU's statistical agency Eurostat as saying Monday. The average government deficit in the 12-nation eurozone fell from 2.8 per cent of Gross Domestic Product (GDP) in 2004 to 2.4 per cent of GDP last year. In the wider EU, budget deficits fell from 2.7 per cent of GDP to 2.3 per cent. At the same time, eurozone debt rose to 70.8 per cent of GDP in 2005 from 69.8 per cent in 2004 while in the 25-nation EU debt rose to 63.4 percent from 62.4 percent. Under EU rules, governments must keep their budget deficits under 3 per cent of GDP. Debt levels have to be kept below 60 per cent of GDP. However, only eurozone nations can face fines for failing to meet the fiscal rules. Eurostat said that the biggest deficit figures were recorded in 2005 in Hungary where the deficit reached 6.5 per cent of GDP, followed by Portugal with 6.0 per cent, Greece with 5.2 percent and Italy with 4.1 per cent. Also in breach of EU rules were Britain with a deficit of 3.3 per cent of GDP, the Czech Republic with 3.6 per cent, Germany with 3.2 per cent, Malta with 3.2 per cent and Slovakia 3.1 per cent. Officials said that Greece had to communicate further information on its deficit figures given the "magnitude and complexity" of its revised 2005 GDP data which showed an increase of 25 per cent compared to earlier figures. Eurostat said its deficit figure for Greece was set at 5.2 per cent of GDP compared to an earlier figure of 4.5 per cent.
