27th April 2014

More good news for the eurozone economy

On 23 April, the eurozone received several promising pieces of news. Firstly, Portugal successfully sold 10-year government bonds for the first time since the 2011 bailout, with a yeald of only 3.575%. As for Greece, the European Commission announced that Athens have seen a primary budget surplus of 0.8% in 2013, that is when considering the budget without payments for interests of previous debts and without one-time measures, such as bank recapitalization. Although Greek deficit rose to 12.7% in 2013, from almost 9% in 2012, the achievement of primary surplus was called very encouraging and ahead of schedule provided by the programme supervised by the Troika. Thirdly, the eurozone and the EU as a whole continued successfully in their effort to improve their finances. The overall budget deficit in 2013 fell to 3% of GDP in the eurozone, from 3.7% in 2012. Luxembourg registered a slight budget surplus and Germany had a balanced budget. The government debt, however, rose slightly from 90.7% GDP in 2012 to 92.6% last year, with Greece having the highest debt of all, more than 175%, which is an increase compared to 2012. Apart from Greece, also Cyprus, Portugal, Italy, Ireland and Belgium have a debt of more than 100% of their respective GDP. For the whole of EU28, the budget deficit fell to 3.3% and debt increased to 87.1% of GDP. Lastly, business activity rose in April at the fastest rate since the outbreak of the crisis. The growth is provided mostly by Germany, while France remains highly stable. Overall, however, the numbers are very promising in the recent times of slow and fragile economic recovery.

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Members of the American Chamber of Commerce in the Czech Republic