Data quality assurance
Eurostat's objective for government finance statistics (GFS) is to ensure that the government deficit and debt figures published through the so-called EDP notifications are of the highest possible quality and comparability.
Quality assurance is provided through the processes described in the inventory of Eurostat's excessive deficit procedure (EDP) processes.
GFS play a key role in EU economic monitoring. They include, in particular, the data on government debt and deficit reported under the EDP.
Foundations of the methodology
On behalf of the Commission, Eurostat is responsible for assessing the quality of the EDP statistics transmitted by EU Member States and for providing the statistics to be used for the EDP. It has sole competence on the methodology underlying these statistics.
This methodology is based on:
- the European system of accounts (ESA 2010), which has the status of an EU regulation
- Eurostat's Manual of government deficit and debt (MGDD)
- Eurostat's decisions and guidance notes.
This methodology has been elaborated based on a broad consensus in the EU statistical community.
Eurostat's mission and principles
In carrying out its responsibilities, the mission of Eurostat in the field of GFS is to be the guardian of the implementation of the ESA by EU Member States, whatever the circumstances, and to develop, when necessary, sound interpretations of the ESA, based on advice from the EU statistical community.
Eurostat conducts this mission respecting the principles of equal treatment of EU Member States and of the European Statistics Code of Practice, in particular professional independence, objectivity and impartiality. It maintains a continuous dialogue with all relevant institutions in the EU Member States and provides bilateral advice for specific past and future transactions.
The central legal framework for the production and notification of EDP statistics is EU regulation 479/2009. Details can be accessed on the legislation page.
Furthermore, Eurostat communicated to the European Parliament and the Council in 2011 a strategy for establishing a robust quality management framework for EU statistics, please consult Communication 2011(211) ‘Towards robust quality management for European Statistics’. The communication was endorsed by the ECOFIN Council of June 2011.
It calls for the reinforcement of professional independence in the governance of the European Statistical System through an amended statistical law (EU regulation 223/2009) and a reinforced Code of Practice for European Statistics.
It also aims to enhance the quality of EDP statistics, notably by extending the scope of EDP verification to ‘upstream’ (public accounting) source data. Eurostat has gained investigative powers with a view to reinforcing budgetary surveillance in the euro area (EU regulation 1173/2011).
In its assessment of the quality of the GFS and EDP statistics transmitted by EU Member States, Eurostat is committed to verifying:
- the compliance with ESA accounting rules by the national reporting authorities
- the exhaustiveness of the coverage of the general government sector, in particular by means of a register of government controlled entities
- the quality of the ‘EDP Inventories of methods, procedures and sources’ of EU Member States
- the reliability, timeliness and consistency of the statistical data
- the consistency, sustainability, transparency, documentation and control of the EDP compilation processes within national statistical authorities
- the conformity of these processes with the European Statistics Code of Practice
- the degree of assurance provided by internal controls and external audits by supreme audit institutions or other external audit bodies of the quality of public accounts used as inputs to the EDP compilation processes.
In order to communicate the results of its assessment as widely as possible, Eurostat is also committed to:
- publish a bi-annual Euro indicators release on EU Member States' notifications of deficit and debt
- publicly communicate any ‘qualified’ positions it takes as regards EU Member States' data on deficit and debt by means of so-called reservations and amendments
- transparency by maintaining a dedicated GFS website, which includes detailed EDP tables, supplementary notes on the notified data, methodological notes, and reports on EDP visits.
It is important to note that Eurostat is not in a position to:
- certify accounts of individual entities classified into the general government sector of EU Member States
- take responsibility in cases of deliberate misreporting by national reporting authorities or other reporting entities when no direct or indirect sources were available to cross-check these accounts
- take responsibility in cases of errors committed by national reporting authorities or other reporting entities when no direct or indirect sources were available to cross-check these accounts
- take responsibility for forecasts of general government deficit and debt.
Eurostat's GFS Directorate uses the following tools and procedures to assess the quality of the EDP and GFS statistics transmitted by EU Member States:
- bi-annually, with the spring and autumn EDP notifications, an extensive analysis of the notified tables is carried out over a period of 3 weeks. The main EDP tables are accompanied by a series of related annex tables that allow detailed cross-checking, in particular tracking the translation from the national ‘working balances’ to ESA surplus/deficit and checking the consistency of the deficits/surpluses with the reported changes in debt;
- quarterly, the analysis of EU Member States' quarterly transmissions of general government non-financial, financial accounts, balance sheets, and debt, which are also used in a preventive way to anticipate issues arising in the bi-annual notifications;
- regular EDP dialogue visits to EU Member States, following standardised procedures and agendas, with reports published later on. Dialogue visits to national statistical authorities cover statistical and upstream issues, the latter directed at examining inputs to the GFS reporting of national statistical authorities;
- an internal annual country risk assessment, based on auditing practices adapted to EDP needs, which is used to address preventive action to EU countries deemed to be at higher risk. As a standard, EU countries are visited every 2 years. However, if necessary, they may be visited more frequently;
- a team of desk officers, each responsible for a maximum of 2 EU Member States, who follow daily, weekly and monthly agreed procedures to monitor public finance issues and exchange information with their counterparts in their respective countries. They coordinate with
the Directorate-General Economic and Financial Affairs (DG ECFIN) and the European Central Bank (ECB) country desks; - a team of methodologists who participate in the visits;
- a methodological team and a working group, the EDP statistics working group (EDPS WG), devoted to methodological issues, composed of experts from national statistical institutes (NSIs) and national central banks;
- a group of experts from NSIs and central banks, the Committee on Monetary, Financial and Balance of Payments Statistics (CMFB) (acting as an advisory body) through consultations that follow rigorous rules of procedure;
- the power to organise methodological visits, where appropriate, express reservations or amend EDP data notified by national statistical authorities, and recommend to the Council financial sanctions in cases of deliberate misreporting or serious negligence in the reporting of EDP statistics (EU regulation 1173/2011).
The detailed description of the Eurostat's processes and tools in relation to the EDP statistics is presented in the Eurostat inventory of EDP processes.