The account deficit fell during the third quarter, in line with expectations, according to the latest figures from the Australian Bureau of Statistics.
The figures showed Australia posted an account deficit of $5.637 billion for the three months ending September, with economists expecting a deficit of $5.6 billion.
The result comes after the downwardly revised forecast to $6.66 billion in the June quarter.
The ABS said that the increase of $1.93 billion in the deficit on goods and services in volume terms would subtract 0.6 percentage points from the September quarter GDP.
S&P warns Euro zone on credit ratings
Standard & Poor’s has placed 15 European nations on credit watch with negative implications, on the same day the leaders of both France and Germany came to an agreement on the budget crisis.
France, Germany and the Netherlands were affected by the warning, along with Austria, Finland and Luxembourg.
“Today’s CreditWatch placements are prompted by our belief that systemic stresses in the Eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the Eurozone as a whole,” S&P said in a statement.
The warning means these nations now have a one in two chance they will have their ratings downgraded, although S&P said it will conduct a review as soon as possible.
Belgium, Estonia, Ireland, Italy, Malta, Portugal, Slovak Republic, Slovenia and Spain were also named.
France and Germany have agreed to a “comprehensive agreement” to tighten the rules for gaining membership to the European Union.
“The goal that we have with the chancellor is for an agreement to have been negotiated and concluded between the 17 members of the Eurozone in March, because we must move quickly,” Sarkozy said overnight.
The countries say EU member states whose deficits go over 3% of GDP should face sanctions, and national budgets should be verified by the European Court of Justice.
Sarkozy also said that Germany and France were “in complete agreement to say that eurobonds are in no case a solution to the crisis, in no case.”
The International Monetary Fund has confirmed $2.88 billion in rescue funds for Greece in order to recover from its sovereign debt crisis.
In a statement, IMF head Christine Lagarde said the restructuring of Greek debt by private banks is “crucial” to the country’s recovery.
“Near-universal participation in the proposed private debt exchange will be important to realise a sustainable debt position, meet financing needs, and ensure continued Fund support,” Ms Lagarde said in a statement.
The Australian sharemarket has opened flat this morning after a similar lead from the United States, where investors are still wary over the financial future of the Eurozone.
The benchmark S&P/ASX200 index was down 18 points or 0.4% to 4302.5 at 12.10 AEST, while the Australian dollar actually rose after European talks, up to $US1.02c.
AMP shares fell 0.46% to $4.37, while ANZ shares rose 0.9% to $21.24. NAB fell 0.2% to $24.60 as Westpac rose 0.05% to $21.70.
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