Government deficits, Spain, Greece, Ireland: no improvements at all and default is just around the corner

Real-World Economics Review Blog

According to Eurostat, the 30% Greek quarterly deficit (second quarter 2013), which caused the Greed yearly deficit to be higher than ever, was caused by:

In 2013Q2 the Greek deficit is strongly influenced by capital transfers related to three bank recapitalisations and a bank resolution. The impact of this amounted to around 25 % of quarterly GDP.

Still wondering why Greek pensions are being cut?


The transfer was triggered by banking problems which were created by the Greek default. Greece was not the only country which transferred massive grants to the banking system:

The 2012Q4 Belgian deficit is negatively influenced by a bank recapitalisation. The 2012Q4 deficit for the Czech Republic is negatively influenced by a capital transfer in the context of the church restitution. For Portugal, the quarterly variations in the seasonally adjusted net lending (+)/ net borrowing (-) during 2012 and 2013Q1 are largely due to one-off…

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