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?

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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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