Why we can’t balance the books

The hype surrounding the drop of €10bn in the overall deficit masks the fact that current, day-to-day expenditure actually increased by €1.5bn (from €48bn to €49.5bn) over 2011.

Almost all the deficit reduction was caused by non-recurring bank recapitalisation costs.

Incredibly, current spending was only €41bn in 2007 when our income was €48bn.