The general government financial accounts cover transactions in financial assets and liabilities as well as the stock of financial assets and liabilities. In the first quarter of 2022, the market value of the outstanding long-term debt securities in the euro area decreased by around €501 billion due to a decrease in value in the financial markets. This is mainly the result of higher interest rates observed. This makes the debt securities issued in the past, when interest rates were lower, less attractive to investors, resulting in a decline in value. At the end of the first quarter of 2022, long-term debt securities made up around 71% of the total liabilities of euro area governments.
This information comes from data on quarterly government finance published by Eurostat today. The article presents a handful of findings from the more detailed Statistics Explained article.
Source dataset: gov_10q_ggfa
The outstanding amount of liabilities changes either due to transactions (mainly due to net issuance, but also due to accrued interest) or due to other economic flows (mainly price changes also known as holding gains or losses). As long-term debt securities are traded on the financial markets, the value of these instruments changes constantly over time. At the end of the first quarter of 2022, the value of debt securities issued by governments in the euro area declined (by €501 billion) faster than the net issuance of new long-term debt securities (around €231 billion). This resulted in a €270 billion lower stock outstanding at the end of the quarter as compared to the beginning of the quarter and a holding loss for creditors.
For more information:
- Statistics Explained article on quarterly government finance statistics
- Dedicated section on government finance statistics
- Database on quarterly government finance statistics
- Database on government finance statistics
Methodological notes:
- In the European System of Accounts (ESA 2010), most assets and liabilities are valued at market value. This means that the stock of financial assets and liabilities fluctuates due to transactions, but also due to "other flows", notably revaluations (nominal holdings gains and losses).
- Long-term debt securities are part of the general government gross debt as covered in the Maastricht debt definition stipulated in the Excessive Deficit Procedure. Thus, stock data on long-term debt securities are also published at face value, which does not take into account most price changes. The stock at face value can differ significantly from the stock at market value.
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