04/22/2013 05:03 EDT | Updated 06/21/2013 05:12 EDT

Spending cuts, tax increases help reduce eurozone deficit in 2012 but debt still rising

BRUSSELS - Official figures show the austerity medicine pursued across a number of European countries is working, at least when it comes to reducing annual borrowing levels.

Eurostat, the European Union's statistics office, says Monday that the cumulative level of government deficits across the 17 EU countries that use the euro dropped in 2012 to around 353 billion euros ($460 billion) from 391 billion the year before.

As a result, the budget deficit of the whole eurozone fell to 3.7 per cent of the region's annual gross domestic from 4.2 per cent in 2011.

Though the spending cuts and tax increases are helping to reduce deficits, the eurozone's debt burden rose because economic growth has flat-lined. In 2012, eurozone debt was worth 90.6 per cent of the region's annual GDP, up from 87.3 per cent.