(BRUSSELS) - Most European governments made big strides in 2007 in cleaning up their finances with the smallest shortfall between revenue and spending on record, according to official EU data on Friday.

The combined public deficit of the 15 nations sharing the euro fell to 0.6 percent of gross domestic product (GDP) last year, down from 1.3 percent in 2006, the European Union's Eurostat data agency said.

Only in 2000 was the shortfall smaller although that was because of windfall revenues stemming from the sale of mobile telephone licences, according to the European Commission.

Meanwhile, the combined public deficit of all 27 EU nations eased to 0.9 percent from 1.3 percent.

Describing the figures as "very encouraging," commission spokeswoman Amelia Torres said "this gives us the opportunity of confronting the current climate of turmoil and the American slowdown with a certain degree of assurance."

She added that that "would not be the case if our budgets would not have been tidied up in the last few years."

Despite the overall improvement, the data masked wide variations, with the hole in public finances running as high as 5.5 percent in Hungary, making it the only country with a deficit greater than an EU limit of 3.0 percent.

However, other countries also had sizeable shortfalls in their public finances with 2.9 percent in Britain, 2.8 percent in Greece, 2.7 percent in France and 2.6 percent in Portugal.

"Clearly some countries aren't there yet so our recommendation as ever is they need to move towards a balance in their public accounts such as to achieve a situation that will allow them to invest in growth and jobs," Torres said.

On the other side, frugal Finland chalked up a budget surplus equal to 5.3 percent of output, Denmark 4.4 percent, Sweden 3.5 percent, Bulgaria 3.4 percent, Cyprus 3.3 percent, Luxembourg 2.9 percent, Estonia 2.8 percent, Spain 2.2 percent, Netherlands 0.4 percent and Ireland 0.3 percent.

Regional heavyweight Germany balanced its accounts last year, casting years of overspending since the reunification of the country's western and eastern halves into the history books.

Eurostat said that overall, 17 EU member states saw improvements in their budget positions while 10 saw a deterioration.

Meanwhile, overall debt was on the decline in Europe last year in terms of a proportion of GDP but was on the rise in nominal terms.

Government debt in the eurozone equalled 66.3 percent of GDP last year, down from 68.4 percent, while in the full EU, debt fell to 58.7 percent from 61.2 percent.

In nominal terms, eurozone government debt rose to 5.91 trillion euros (9.41 trillion dollars) in 2007 from 5.81 trillion euros, while in the combined EU it rose to 7.24 trillion euros from 7.15 trillion euros.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.