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Estonia's debt nearly doubles due to eurozone bailout fund

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(TALLINN) - Estonia's national debt nearly doubled last year, in part due its involvement in the European Financial Stability Facility (EFSF) created to bailout debt-laden eurozone members like Greece, Statistics Estonia said on Thursday.

The Baltic state which boasts the healthiest public finances in Europe saw its national debt jump to 10.1 percent of gross domestic product (GDP) in 2012 from 6.1 percent the previous year.

Meanwhile, the eurozone nation posted a public deficit of 0.3 percent of GDP last year, after recording a surplus of 1.1 percent in 2011.

EU states are supposed to keep their public debt below 60 percent of GDP and deficits below 3 percent, although these rules are widely flouted in practice.

Estonia's general government consolidated debt nearly doubled over 2012 to stand at 1.7 billion euros ($2.2 billion) at the end of the year.

"The lion's share of the increase resulted from rapid growth in the volume of the central government's long-term debt," Agnes Naarits, an senior analyst at Statistics Estonia, told AFP.

She pointed to Tallinn's involvement in the EFSF and motorway investments as being the biggest reasons behind the jump in the debt.


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