Annual government deficits in both the Eurozone and the EU27 decreased last year, compared to 2011, according to the latest data from Eurostat.

The EU statistics agency reports that in the Eurozone the government (annual) deficit to GDP ratio decreased from 4.2% in 2011 to 3.7% in 2012, and in the EU27 from 4.4% to 4.0%.

However, with regards to overall debt levels, the average government debt to GDP ratio increased in the Eurozone from 87.3% at the end of 2011 to 90.6% at the end of 2012, and in the EU27 from 82.5% to 85.3%.

In short, the EU countries have reduced the amount they overspend each year but the overall debt continues to increase.

Within the EU last year, the lowest government deficits as a percentage of GDP were recorded in Estonia (-0.3%), Sweden (-0.5%), Bulgaria and Luxembourg (both -0.8%) and Latvia (-1.2%), while Germany (+0.2%) registered a government surplus.

The highest government deficits were recorded in Spain (-10.6%), Greece (-10.0%), Ireland (-7.6%) and Portugal (-6.4%). Cyprus and the UK were not far behind (both with -6.3%).

Regarding overall government debt, at the end of 2012 the lowest ratios of government debt to GDP were recorded in Estonia (10.1%), Bulgaria (18.5%), Luxembourg (20.8%), Romania (37.8%) and Sweden (38.2%).

Greece (156.9%), Italy (127.0%), Portugal (123.6%), Ireland (117.6%), Belgium (99.6%), France (90.2%), and the UK (90.0%) were the most indebted EU countries.