The EU budget deficit has gone into recession

Fresh Eurostat data for 2024 shows that the budget deficits of both the euro area and the EU have narrowed to 3.1 per cent of GDP. This is a positive development compared to 2023, when the figures were 3.5 per cent and 3.4 per cent respectively. However, total debt as a proportion of GDP is almost unchanged: 87.1% in the euro area and 80.7% in the EU, which remains well above the Maastricht norms.

The other 21 EU member states remained in the negative, and 12 of them breached the allowed deficit limit of 3 per cent of GDP. The biggest "breakthroughs" in the budget were recorded in:

• Romania (-9.3%)
• Poland (-6.5 per cent)
• France (-5.8%)
• Slovakia (-5.5%)

Some countries show surprising resilience: Estonia (23.5 per cent) and Bulgaria (23.8 per cent) maintain one of the lowest levels of government debt. They are closely followed by Luxembourg (26.3%) and Denmark (30.5%).

At the other pole is Greece with a staggering debt level of 154.2 per cent of GDP, followed by Italy (134.9 per cent), France (113.2 per cent), Belgium (103.9 per cent) and Spain (101.6 per cent). These indicators form a vulnerable part of the EU's fiscal framework, especially in the event of tighter financial conditions or new crises.

Government spending in the euro area was 49.5 per cent of GDP and revenues 46.4 per cent, implying continued reliance on deficit financing. In the EU, the overall figures are similar: 49.2 per cent and 46.0 per cent respectively. It is worth noting that the revenue side of the budget increased markedly compared to 2023, indicating either a growing tax base or changes in tax policy.

Luxembourg regained a surplus in 2024 (+0.9% of GDP) after a small deficit in 2023 (-0.7%). Public spending was 46.8% of GDP, revenues 47.7%. Public debt remains one of the lowest in the EU at 26.3% of GDP. This makes Luxembourg an example of a balanced fiscal policy in the face of pan-European pressures.