Deep debt cut in third quarter 2011 for Malta

Euro area government debt down to 87.4% of GDP, EU27 up to 82.2% in third quarter 2011 compared with second quarter 2011.

6 February 2012, 12:00am

2 min read

Malta cut debt by 1.6% by October 2011, down to 70.3% of gross domestic product from 71.9%. Government debt stands at 4.47 billion.

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Malta and Italy were the two EU member states with the greatest cuts in government debt between the third quarter and second quarter of 2011.

Malta cut debt by 1.6% by October 2011, down to 70.3% of gross domestic product from 71.9%. Government debt stands at €4.47 billion.

Compared to the same quarter in 2010, debt is down by 0.1%.

Eurostat today published for the first time quarterly data on government debt.

At the end of the third quarter of 2011, the government debt to GDP ratio in the euro area (EA17) stood at 87.4%, down compared with 87.7% at the end of the second quarter of 2011. In the EU27 the ratio increased from 81.7% to 82.2%. Compared with the third quarter of 2010, the government debt to GDP ratio rose in both the euro area (from 83.2% to 87.4%) and the EU27 (from 78.5% to 82.2%).

At the end of the third quarter of 2011, securities other than shares accounted for 79.3% of euro area and 79.7% of EU27 general government debt. Loans made up 18.0% of euro area and 15.8% of EU27 government debt. Currency and deposits represented 2.8% of euro area and 3.8% of EU27 government debt.

Malta's debt is in the main, 65.8% of GDP, composed of securities while only 3.8% of GDP is taken up by loans.

Due to the involvement of EU governments in financial assistance to certain Member States, and in order to obtain a more complete picture of the evolution of government debt, quarterly data on intergovernmental lending (IGL) is also published. The share of IGL in GDP at the end of the third quarter of 2011 is similar for both the euro area and the EU27, amounting to 0.8% and 0.6% of GDP respectively.

Government debt at Q3-2011

The highest ratios of government debt to GDP at the end of the third quarter of 2011 were recorded in Greece (159.1%), Italy (119.6%), Portugal (110.1%) and Ireland (104.9%), and the lowest in Estonia (6.1%), Bulgaria (15.0%) and Luxembourg (18.5%).

Compared with the second quarter of 2011, fourteen Member States registered an increase in their debt to GDP ratio at the end of the third quarter of 2011, and thirteen a decrease. The highest increases in the ratio were recorded in Hungary ( 4.8 percentage points - pp), Greece ( 4.4 pp) and Portugal ( 3.6 pp), and the largest decreases in Italy and Malta (both -1.6 pp) and Romania (-1.0 pp).

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The cut in debt is artificial. It is only showing because the government postponed the issue of new government stock. These were issued in the last quarter. So in reality the debt increased last year.