The most dramatic decline occurred in Ireland, where the deficit shrank to 13.4 percent of G.D.P., from 30.9 percent in 2010.
For all 27 European Union nations, the deficit shrank to 4.4 percent in 2011 from 6.5 percent a year earlier, even as debt grew to 82.5 percent of G.D.P. from 80 percent.
What is really galling is that, in order to make the deficit shrink, the Treasury assumes that the economy will start growing again at the end of this year and expand by 3.5% in 2011.
Although the deficit shrank, Spain fell short of its goal of reducing the 2012 spending gap to 6.3 percent of G.D.P., as the government had promised its euro zone partners.
In 2012 the federal government reduced the growth of spending and the deficit shrank to 7.6% of GDP.
If the economy grows faster than its current 2percentt annualized rate, the deficit shrinks in proportion.
The nature of the economic debate has shifted in recent months, with the budget deficit shrinking rapidly while the economy, though firmly in recovery, struggles to build up a head of steam.
While the figure is a one-time charge — stripping out the banks, the deficit shrinks to 11 percent of G.D.P. — it remains shocking and is the largest fiscal deficit recorded by a major European country.
In the year to February, the trade deficit shrank to $6.9 billion.Argentina's economy shrank by 3.6% in the year to the fourth quarter, although it grew by 0.8% compared with the third quarter.
[C3.] The trade deficit shrank in May, the government reported, but economists warned that the decline could not be sustained because it was caused by a drop in oil prices that has since reversed.
