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Deficits fall in southern Europe. Progress?

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Gregorio Borgia/AP/File

(Read caption) People walk past closed shops in downtown Rome earlier this month. Italy shrank its deficit by about two thirds in the past year.

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Here are the first half current account balance numbers for the first half of this year for the main four Southern European euro area countries, with the balance for the first half of 2011 in ( ).

Italy : -€11.6 billion (-€35.9 billion)
Spain: -€17.1 billion (-€24.6 billion)
Greece: -€5.9 billion (-€13 billion)
Portugal: -€2.9 billion (-€7.8 billion)

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As you can see, Italy and Portugal had the biggest improvements with their deficits falling by about two thirds while Greece saw its deficit fall by more than half too, Spain saw the smallest improvement, with its deficit falling by only about 30%. Given the current market mistrust of those countries, even a smaller deficit is too big, but at least it is moving in the right direction.