Eurostat, the statistical office of the European Union

Eurostat, C1, National accounts methodology. Indicators

Office address:
Joseph Bech building
5, Rue Alphonse Weicker
2721 Luxembourg

Functional mail box: ESTAT-MIP@ec.europa.eu

Government Finance Statistics (GFS) form the basis for fiscal monitoring in the European Union, most notably for the statistics related to the Excessive Deficit Procedure (EDP). The EDP is established in the Treaty on the Functioning of the European Union (TFEU) and specified in the Stability and Growth Pact. The Member States report data related to the EDP to the Commission (Eurostat) which, in turn, is responsible for providing the data to the Council.

European GFS, including the statistics for the EDP, are produced in accordance with Regulation (EU) 549/2013 of the European Parliament and of the Council on the European system of national and regional accounts (ESA 2010), the EU manual for National accounts, which in September 2014 replaced the previous version of the national accounting framework ESA 95. It is supplemented by further interpretation and guidance from Eurostat, in particular the Manual on Government Deficit and Debt.

Government debt is defined as the total consolidated gross debt at nominal (face) value outstanding at the end of the year and consolidated between, and within the sectors of general government. This definition is supplemented by Council Regulation (EC) No 479/2009 as amended, specifying the components of government debt with reference to the definitions of financial liabilities and instruments according to the European System of National and Regional Accounts (ESA 2010). Council Regulation (EC) No 479/2009 as amended requires that Member States report government deficit/surplus (hereinafter deficit) and debt data related to the EDP twice per year: before 1 April and 1 October for the preceding four calendar years and a forecast for the current year. The data are reported in harmonised tables. These tables are designed specifically to provide a consistent framework, with a link to national budgetary aggregates and between the deficit and changes in the debt. They should be fully consistent with GFS data delivered to Eurostat under the ESA 2010 transmission programme.

The MIP scoreboard indicator is the annual consolidated General government gross debt.

The classification system follows the European System of Accounts 2010 edition (ESA2010): classification of institutional sectors and classification of transactions, other flows and balance sheet items (assets/liabilities).

In September 2014, the new national accounting framework ESA2010 replaced the ESA 95 framework, in order to better reflect economic and technological developments and meet user needs. This led to revisions of the time series for all Member States (see: Eurostat press release for the impact of the revisions on government deficit and debt ratios). The main changes relate to the classification of certain entities into the government sector and the treatment of transactions related to pension schemes. The concept of government deficit was also modified as regards to the treatment of interest on swaps and forward rate agreements (Commission Regulation 220/2014 amending Council Regulation 479/2009), these flows being now recorded as financial transactions in line with the core ESA accounting framework.

Data covers the consolidated General government (S.13) and its subsectors. The 'general government sector' consists of all government units, all non-market non-profit institutions (NPIs) that are controlled by government units and other non-market producers. Government units are legal entities established by political process possessing legislative, judicial or executive authority over other institutional units within a given area. Their principal function is to provide goods and services to the community and to households on a non-market basis and to redistribute income and wealth.

For further information on institutional sectors and subsectors, see European System of Accounts 2010 edition (ESA2010).

The MIP scoreboard indicator is the consolidated General government gross debt, as a percentage of GDP. The calculation formula is: (GGD_t / GDP_t) * 100. The indicative threshold for the indicator is 60%.

The concepts for EDP statistics are explained in Council Regulation (EC) No 479/2009, as amended and Regulation (EU) No 549/2013 of the European Parliament and of the Council (ESA2010) and subsequent legal amendments, supplemented by further interpretation and guidance from Eurostat, in particular the Manual on Government Deficit and Debt.

Government debt is defined as the total consolidated gross debt at nominal (face) value at the end of the year in the following categories of government liabilities (as defined in ESA 2010): currency and deposits (AF.2), debt securities (AF.3), and loans (AF.4). At the national level, data for the general government sector are consolidated between subsectors. 

Deficit and debt data are reported by subsectors of general government: central government (S.1311), state government (S.1312), local government (S.1313) and social security funds (S.1314).

The transition from the working balance to the deficit/surplus (EDP tables 2A - 2D) is explained by the following items, based on example for central government:

• Financial transactions included in the working balance;
• Non-financial transactions not included in the working balance;
• Difference between interest paid and accrued (D.41);
• Other accounts receivable / other accounts payable;
• Working balance of entities not part of central government;
• Net borrowing or net lending of other central government bodies;
• Other adjustments.

The transition from the deficit/surplus to the change in debt is explained by the following items:

• Net acquisition of financial assets: Currency and deposits (F.2), Debt securities (F.3), Loans (F.4), Equity and investment fund shares/units (F.5), Financial derivatives (F.71), Other accounts receivable (F.8) and Other financial assets (F.1 and F.6);
• Net incurrence of liabilities in financial derivatives (F.71);
• Net incurrence (-) of other accounts payable (F.8);
• Net incurrence (-) of other liabilities (F.1, F.5, F.6 and F.72);
• Issuances above/below nominal value;
• Difference between interest (D.41) accrued and paid;
• Redemptions/repurchase of debt above/below nominal value;
• Appreciation/depreciation of foreign-currency debt;
• Changes in sector classification (K.61);
• Other volume changes in financial liabilities (K.3, K.4, K.5);
• Difference between capital and financial accounts (B.9 - B.9f) and other statistical discrepancies.

All the definitions are according to European System of Accounts 2010 edition (ESA2010).

The statistical unit is an institutional unit as defined in ESA 2010. The institutional units are grouped to general government sector and its subsectors.

General government sector and its subsectors

The scoreboard presents national data for each EU Member State, as well as euro area (EA) and the European Union as a whole. 

Details on data availability are available under the link: tipsgo10.

Not applicable

National currency and percentage of GDP

The reference period is the calendar year. Stocks (such as debt) are as at the end of the calendar year.

National accounts are compiled in accordance with Regulation (EU) No 549/2013 of the European Parliament and of the Council on the European System National and Regional of Accounts (ESA 2010).The new national accounting framework ESA 2010 replaced in September 2014 the previous framework ESA 95.

For EDP statistics, the legal basis is the Council Regulation (EC) No 479/2009 as amended on the application of the Protocol on the Excessive Deficit Procedure annexed to the Treaty on the Functioning of the European Union.

The indicator General government gross debt is part of the MIP Scoreboard headline indicators set up under Regulation (EU) No 1176/2011 of the European Parliament and of the Council.

Not applicable

Regulation (EC) No 223/2009 of the European Parliament and of the Council on European statistics (recital 24 and Article 20(4) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

Data are treated as confidential after reporting, during the validation process, until the news release.

The EDP statistics of the euro area, EU aggregates and of the Member States are published in Eurostat's news release and statistical database twice per year (April and October). The precise date of data release is available in Eurostat release calendar.

The source data tables are published according to the Eurostat release calendar. There is no release calendar for MIP scoreboard indicators.

The MIP Regulation stipulates that “the Commission shall make the set of indicators and the thresholds in the scoreboard public” (Art. 4, para. 6, Regulation (EU) No 1176/2011 of 16 November 2011 on the prevention and correction of macroeconomic imbalances) and that “the Commission shall update the values for the indicators on the scoreboard at least on an annual basis” (Art. 4, para. 8). In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see §10 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. Detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

The MIP related indicators are updated and released in accordance to the dissemination of the underlying statistics, which are bi-annual.

News releases on-line

The indicators of the MIP Scoreboard are used to identify emerging or persistent macroeconomic imbalances in the EU countries. The Scoreboard is part of an annual exercise, where the first step is the compilation of an Alert Mechanism Report (AMR).

See data availability for the table: tipsgo10

Not applicable

Comments may be made by the European Commission or EU Member States on the occasion of the release of EU data (http://ec.europa.eu/eurostat).

For the years not covered by the latest EDP notification (which provides data back to year T-4), series submitted within EDP tables may differ from data published in General government main aggregates. In this case, data in the General government main aggregates domain are normally more reliable.

Please consult the news releases for information on reservations and amendments by Eurostat to individual countries' data.

Methodology for EDP statistics is set out in Council Regulation (EC) No 479/2009 as amended and Regulation (EU) No 549/2013 of the European Parliament and of the Council (ESA 2010) and subsequent legal amendments, supplemented by further interpretation and guidance from Eurostat, in particular the Manual on Government Deficit and Debt.

Eurostat's mission is to provide the European Union with a high-quality statistical information service (see: Eurostat quality framework).

For more information one can consult the Quality Reports published on the Eurostat GFS dedicated web section and in particular, the page on EDP Inventories, presenting descriptions of sources and methods used for compiling the reported EDP data, as required by Council Regulation (EC) No 479/2009 as amended.

Moreover, the statistics underlying the Scoreboard indicators are subject to a specific quality assurance framework developed within the MIP context.

Quality of data is assured by adherence to the ESA 2010, the Manual on Government Deficit and Debt and by the validation of Member States' data by Eurostat.

Please see the page Quality reports of the Eurostat GFS dedicated web-section.

The quality assurance framework for the Macroeconomic imbalance procedure (MIP) follows a three-level structure:

The first level assesses the reliability and comparability of MIP underlying statistics and addresses relevant quality issues; it also enhances the communication on quality assurance of MIP statistics towards the European Parliament and Council, policy makers and the public at large. This level draws on the information gathered in levels two and three (see below).

The second level consists of domain-specific quality reports produced by Eurostat and the ECB summarising the main findings for the euro area or the EU Member States. Reports assess the underlying compilation process and its robustness, describe its legal basis and evaluate whether the statistics are in line with international statistical standards.

The third level consists of national quality reports (self-assessments) produced by the institution compiling the national statistics. Most of these reports are voluntarily published by Members States on the CMFB’s website and their availability depends upon the statistical domain.

The indicator General government gross debt is one of the headline indicators of the MIP Scoreboard. The MIP Scoreboard is used as an early warning system in the context of the macroeconomic surveillance of the EU Member states. The MIP Scoreboard consists of a set of fourteen indicators, covering the major sources of macroeconomic imbalances. The aim of the scoreboard is to trigger in-depth studies, which will analyse whether potential imbalances identified in the early-warning system are benign or problematic.

Eurostat is in constant dialogue with main users and national statistical institutes in order to improve EDP data.

All data required by Council Regulation (EC) No 479/2009 as amended are available.

The MIP indicators are associated with a high level of overall accuracy. Data transmitted by Member States are checked in Eurostat for their consistency and plausibility. If any problem is detected, Eurostat contacts the relevant Member State asking to check the figures or to confirm any change.

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Not available

Council Regulation 479/2009 as amended requires that Member States report government deficit and debt data related to the EDP twice per year: before 1 April and before 1 October.

Member States normally meet the deadlines.

Data are comparable across the EU, as harmonised European rules (ESA 2010, and ESA 2010 Manual on government deficit and debt) are used by all Member States for compiling EDP data.

Comparability over time is ensured.

Council Regulation 479/2009 as amended requires consistency of reported EDP data with GFS data delivered to Eurostat in the ESA 2010 transmission programme. This consistency is verified by Eurostat in the course of validation of Member States' EDP data.

Consistency is ensured within and between EDP tables reported by Member States.

Not applicable

Data are revised as necessary, in line with national accounts principles. At each EDP notification, Member States can revise years back to T-4 and must inform Eurostat about details of revisions since the previous EDP notification, in particular on:

• the size of revisions;
• sub-sector(s) of general government;
• the type of revisions: source data, methodological revisions or elimination of possible errors.

Data for earlier years (before T-4) are revised in the database by Eurostat, whenever Member States provide revised data.

Under the Excessive Deficit Procedure (EDP), data reported before 1 April are preliminary since revised annual data are notified before 1 October. These revisions may affect all reported years. Further revisions may also be necessary due to updated data sources or other reasons.

Major changes in methodology may occur as a result of EU legislation or Eurostat decisions, following a consultation procedure with Member States. Major changes in methodology occurring at national level to comply with existing EU requirements, may be mentioned in Eurostat's news release.

Data are based on annual national accounts of general government, derived primarily from administrative and other records of general government. Basic data are reported in national currency.

Bi-annual

Data are collected primarily from administrative reports, but sometimes also with statistical surveys (especially for enterprises reclassified into general government sector, extra budgetary units and local government units etc.).

Eurostat validates data twice per year during the period of three weeks after the EDP notification by Member States. The validation process consists of arithmetic and quality checks as well as checks on consistency with ESA 2010 methodology and with GFS data delivered to Eurostat in the ESA 2010 transmission programme.

Valuation principles are in accordance with ESA 2010. However, debt is recorded at nominal (face) value. Foreign currency debt is converted into national currency using end-year market exchange rates (though special rules apply to contractual agreements). Debt of the euro area and EU aggregates is consolidated by removal of the loans that Member States have granted for support operations to other Member States.

Data are in principle compiled on an accrual basis, according to ESA 2010 rules. For recording of taxes and social contributions, the common principles of ESA 2010 are modified by Commission Regulation (EC) No 995/01 implementing EP and Council Regulation (EC) No 2516/00.

For series transmitted in national currencies other than euro, data are converted by Eurostat into euro using annual average exchange rates (issued by the European Central Bank) in the case of general government flows (net borrowing/net lending, gross fixed capital formation etc.). Eurostat converts national currency into euro using end-year exchange rates (delivered by the ECB) in the case of general government debt and its breakdown by financial instrument.

Ratios as a percentage of GDP are based on annual GDP data submitted to Eurostat in the EDP notification (for years going back to T-4), and from GDP reporting to Eurostat (for earlier years). GDP is gross domestic product at current market prices, as defined in ESA 2010 (B.1*g).

Euro area and EU aggregates are formed by the aggregation of country data in euro (ECU), with consolidation where appropriate.

Please consult the news releases for information on the reservations and amendments by Eurostat to the individual countries' data.

 Not applicable