EU adds billions to Britain's deficit numbers

26th April 2011, Comments 0 comments

The EU added Tuesday some four billion euros to Britain's reported deficits over the past four years, expressing "reservations" over unaccounted-for military spending and domestic bank bailouts.

"Eurostat is expressing a reservation on the quality of the data reported by the United Kingdom," the European Union data agency said in releasing deficit and debt figures for the 27-state bloc.

This was due to "uncertainties" relating to when military expenditure is reported as well as funds pumped into failed lenders Bradford and Bingley and Northern Rock by the previous Labour administration under Gordon Brown.

Britain, already locked into one lengthy war in Afghanistan, is along with France the major contributor to military action against forces loyal to Libyan leader Moamer Kadhafi.

Britain "does not record military expenditure on a delivery basis, as required," Eurostat said.

The figures come days from a lavish royal wedding, also paid for by British taxpayers.

The military impact on the government deficits between 2007 and 2010 amounted to more than two billion euros. Eurostat said this takes into account Britain's spring-to-spring financial years through to the beginning of this month.

The bank bailouts account for a sum almost as large, on the same basis.

Britain's deficit for the 2010-2011 financial year fell from almost 162 billion euros the previous year to just below 147 billion, after a swathe of cuts ordered by new conservative premier David Cameron.

That meant it was logged at 10.0 percent of national output, down from 11.5 percent 12 months earlier.

It is the third-highest in the EU after Ireland and Greece, higher than either Spain or Portugal, next in line at just above nine percent each.

Its cumulative national debt, however, rose by almost 20 percent year-on-year to more than 1.2 trillion -- and now accounts for 82.5 percent of GDP.

While its ratio remains slightly better than eurozone giants Germany, France or Italy, in the space of the last four years, it has risen alarmingly from 43.6 percent.

In a new category, the EU also now logs inter-governmental lending -- code for bailout funding.

Britain has committed to loaning money to Ireland, as well as underwriting some EU bailout funding for Greece and Portugal, but this column showed up empty for the government in London as of April 2011.

© 2011 AFP

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