The Eurozone’s government debt pile has risen to 90% of GDP,according to new data from Eurostat this morning which showed the region’s annual deficit had fallen.

Eurostat has calculated that eurozone members’ collective debt reached €8.6 trilion in 2012, when its combined economic output was nearly €9.5 trillion.

The total eurozone deficit fell to 3.7%, from 4.2% a year ago. Brussels will see that as proof that tough fiscal consolidation programmes are finally bearing fruit.

But the data shows stark difference across the region, and the wider EU. Five eurozone countries have deficit levels above 6% of GDP, a position shared with the UK.

And seventeen memebrs of the European Union missed the target of a deficit below 3% of output (with Spain the worst, at 10.6%)

As Eurostat put it:

In all, thirteen Member States recorded an improvement in their government balance relative to GDP in 2012 compared with 2011, twelve a worsening and two remained stable.

Slovenian officials have a message for the world: Don’t panic — we won’t be the next to fall.

The tiny European Union member is trying to convince its people and foreign investors that it won’t be the next in line for a banking system collapse and a messy international bailout.

“We are absolutely no Cyprus,” says new Slovenian Prime Minister Alenka Bratusek. “We don’t need help. All we need is time.”

But time is running out for the Balkan state, once considered an East European success story and a model for the rest of the region on how to build a post-communist economy. With few specifics from leaders on a rescue plan, some economists are skeptical they can live up to their promises. >> Read More

Over the last hour or so, Eurozone countries reported their PMI readings for March.

A PMI reading is a gauge of a country’s manufacturing sector. Anything above 50 indicates expansion from the month before. Anything below 50 indicates contraction.

Every single reading was below 50 this month. The numbers were completely disastrous.

Via Markit, here’s a breakdown of some of what we just saw.

First, the general Eurozone chart. You can see it deteriorated, and is well below 50, indicating deep contraction.

And here’s a summary of some themes we saw across countries. There was really terrible news on the output, new orders, and employment front.

Markit

>> Read More

Experts from the European Union, European Central Bank and International Monetary Fund are studying the consequences if Cyprus does not receive a bailout, a German newspaper reported on Saturday.”Experts from the troika are calculating, especially under pressure from Berlin, the financial consequences of a Cyprus bankruptcy,” Bild, the most widely read daily in Europe, said without citing a source.Greece would be the country most affected by the failure of the main Cypriot banks which have a network of branches on the island where around 10 percent of Greek savings are stocked.”The banks of the other eurozone countries would, on the other hand, be hardly affected,” Bild said.Cyprus asked for European aid in June, after its two main banks, which were exposed to the crisis in Greece, appealed for government help.On Monday, eurozone finance ministers meeting in Brussels postponed the decision on aid until after Cyprus’ presidential election, whose first round begins on Sunday.Cyprus’ total needs are estimated at more than 17 billion euros (23 million).At the troika’s request, the east Mediterranean island adopted a series of austerity measures to reduce its expenses representing 7.25 percent of gross domestic product over four years.Nevertheless, according to a report in Saturday’s Frankfurter Allgemeine Zeitung, the financing needs of the island’s banks, initially estimated at 10 billion euros, could be in the end considerably lower.Progress has been slow on a bailout for Cyprus given concerns over its banks and allegations of money laundering due to fears that Russian criminal elements are active in the country.

EU finance ministers have given the green light for 11 eurozone members, including France and Germany, to ready a new tax on financial transactions.

The approval under “enhanced co-operation” rules allows the smaller group to pioneer the tax.

Governments previously failed to agree to impose the tax across the entire 27-member EU or 17-member eurozone.

The UK and 15 other EU members will not introduce the tax, which is intended to discourage speculative trading. >> Read More

Europe will have to “work very hard” to maintain the most generous welfare system in the world and remain globally competitive, said Angela Merkel, the German chancellor, in an interview with the Financial Times.

The key to Europe’s ability to survive the challenge of globalisation is to spend more on research and education and overhaul its tax and labour markets to restore competitiveness, she said.

An unrepentant Ms Merkel, regarded by many Europeans as the author of excess austerity to curb the debt crisis in the eurozone, spelt out her determination at last week’s EU summit in Brussels to see her partners commit themselves to binding contracts for more structural reform.

No final agreement was reached, but details of such contracts between eurozone countries and the European Commission are supposed to be finalised in the next six months.

The chancellor went to Brussels seeking agreement on yardsticks to boost competitiveness as a big step to closer economic co-ordination. >> Read More

Eurozone finance ministers and the International Monetary Fund have reached an agreement on Greek debt, which paves the way for the release of much-needed loans.

After nearly 10 hours of talks, it was agreed that the country’s public debt should fall to 124% of GDP in 2020 through a package of extra debt cutting measures.

The deal emerged in Brussels after a meeting of finance ministers from the 17 eurozone countries, the European Central Bank and the IMF on how to make Greek debt sustainable – their third meeting on the issue in as many weeks. >> Read More

The eurozone fell back into recession in the third quarter after the combined economy of the 17-member bloc contracted for the second consecutive month, dragged down by the Netherlands and peripheral nations.

Eurostat, the EU’s statistics office said the region’s economy contracted by 0.1 per cent in June to September, compared with the previous three months. This follows from a 0.2 per cnet decline in the second quarter.

The wider EU avoided recession after recording growth of 0.1 per cent in the third quarter, largely thanks to an Olympics-related boost in the UK.

Germany and France expanded in the third quarter, but the outlook remained bleak as the crisis engulfing the eurozone takes its toll on the region’s largest economies. >> Read More

 Greek lawmakers have approved the country’s 2013 austerity budget. It was an essential step in Greece’s efforts to persuade its international creditors to unblock a vital rescue loan installment without which the country will go bankrupt.

The approval by majority vote early Monday comes four days after a separate bill of deep spending cuts and tax hikes over the next two years squeaked past with a narrow majority in the 300-member Parliament. That vote was preceded by severe disagreements among the three parties in the governing coalition.

Finance ministers from the 17 eurozone countries meet in Brussels later Monday, with Greece’s debt crisis high on the agenda.

And German Finance Minister Wolfgang Schaeuble has said international creditors won’t be rushed into approving the loan disbursement.

A hullabaloo erupted between France and Germany that both governments are trying to silence to death. According to unnamed sources of Zeit Online and Reuters, German Finance Minister Wolfgang Schäuble broached an unprecedented topic with the members of Germany’s Council of Economic Experts on Wednesday when they presented their Annual Report. In its 49-year history of advising German governments, the Council has never delved into policy proposals for other countries. And yet, Schäuble asked them: Could they produce a reform concept for the troubled French economy?

The French, who are currently engaged in national soul-searching and navel-gazing to halt their declining “competitiveness,” were not amused. The office of President Francois Hollande wrapped itself in silence. Prime Minister Jean-Marc Ayrault brushed it off. The German Ministry of Finance declined to comment on “unofficial discussions.” Council Chairman Wolfgang Franzbackpedalled: “That’s largely misinformation,” he said. “An order for a Special Report is not even in the most distant sight.” He figured that the French government “wouldn’t tolerate something like that.” >> Read More