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Eurozone cuts deficits but overall debt rises (Lessons for U.S.?)

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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Apr-23-12 06:22 AM
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Eurozone cuts deficits but overall debt rises (Lessons for U.S.?)
Apr 23, 7:13 AM EDT

Eurozone cuts deficits but overall debt rises

By GABRIELE STEINHAUSER
AP Business Writer

RUSSELS (AP) -- The 17 countries that use the euro still face an uphill struggle to control their debts in spite of managing to slash government deficits to 4.1 percent of economic output in 2011, official data show.

Figures reported Monday by the European Union's statistics office confirmed the effects of harsh austerity programs on the eurozone members' economies, which in 2010 ran an overall deficit of 6.2 percent of gross domestic product. Yet despite these efforts, overall debt rose from 85.3 percent of GDP to 87.2 percent - the highest level since the euro was created in 1999.

After a financial crisis that has now dragged on for close to five years, Monday's figures underline how difficult it will be for the eurozone to bring its deficits and debts back below the EU-stipulated limits of a deficit of 3 percent and debt of 60 percent of GDP.

This task will become even harder if the eurozone's economy has fallen back into recession. Separate data also released Monday indicated that the private sector in the 17-country block continued to shrink in April. The purchasing managers' index for eurozone, compiled by private data firm Markit, fell to a five-month low of 47.4, down from 49.1 in March. A level below 50 means that the private sector is contracting.


Much more at http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_FINANC...
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