20 nov. 2013 1 presentation of gfs in the european statistical system (with emphasis on the...

20 Nov. 2013 1

Presentation of GFS in the European Statistical System (with emphasis on the excessive Deficit Procedure)Seminar on GFS - Istanbul

Denis Besnard Eurostat

GFS seminar Istanbul

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Contents

What are Government Financial Statistics?

1) Data to be reported regularly to Eurostat

2) A precise methodological framework required for their compilation


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1) GFS data to be reported to Eurostat

This is a "package", including:

Notification tables, twice a year (end of March and end of September) "basis" of the EDP (published)

A set of supplementary tables in a "questionnaire relating to the EDP notification tables" (not published)

Some supplementary tables linked to "special events" related to the "financial crisis" and for "intergovernmental lending" (published)

Annual or quarterly tables part of the "transmission programme", annex B of the (Parliament and Council) Regulation on ESA (published)


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The four notification tables

These tables were designed in 1993 and progressively improved until the current version completed in 2000

They must cover 4 years plus the current year in which the notification takes place as forecasts (planning), not controlled and assessed by Eurostat

Each year must be given a status: final, half-final, half-finalised Table 1 is a "summary table" (4 blocks) Table 2 (for each sub-sector) explains the transition between the public

accounts budget balance (labelled as "cash", "accrual" and "mixed") and deficit/surplus B9 for EDP (6 blocks)

Table 3B (for government sector and each sub-sector) explains the contributions of the deficit/surplus and other factors to the variation in the debt level (consolidation at the level of the sector and at the level of sub-sectors) (3 blocks)

Table 4: Provision of other data in accordance with the statements contained in the Council minutes of 22/11/1993.


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Net borrowing (-)/ net lending (+) EDP B.9General government S.13 - Central government S.1311 - State government S.1312 - Local government S.1313 - Social security funds S.1314

General government consolidated gross debtLevel at nominal value outstanding at end of yearBy category:Currency and deposits AF.2Securities other than shares, exc. Fin. derivatives AF.33 Short-term AF.331 Long-term AF.332Loans AF.4 Short-term AF.41 Long-term AF.42

General government expenditure on:Gross fixed capital formation P.51Interest (consolidated) EDP D.41p.m.: Interest (consolidated) D.41 (uses)

Gross domestic product at current market prices B.1*g

Table 1


Working balance in central government accountsBasis of the working balance (cash…)

Financial transactions included in the working balance Loans, granted (+) Loans, repayments (-) Equities, acquisition (+) Equities, sales (-) Other financial transactions (+/-) of which: transactions in debt liabilities (+/-) Detail 1 (…)

Non-financial transactions not included in the working balance Detail 1 (…)

Difference between interest paid (+) and accrued (EDP D.41)(-)

Table 2


Other accounts receivable (+) Detail 1 (…)Other accounts payable (-) Detail 1 (…)Working balance (+/-) of entities not part of central governmentNet borrowing (-) or net lending (+) of other central government bodies Detail 1 (…)Other adjustments (+/-) (please detail) Detail 1 (…) Net borrowing (-)/lending(+) (EDP B.9) of central government (S.1311)(ESA 95 accounts)

Table 2 suite


Net borrowing(+)/lending(-)(EDP B.9) of central government (S.1311) (with opposed sign)

Net acquisition (+) of financial assetsCurrency and deposits (F.2)Securities other than shares (F.3)Loans (F.4) Increase (+)

Reduction (-) Short term loans (F.41), net Long-term loans (F.42) Increase (+) Reduction (-)Shares and other equity (F.5) Portfolio investments, net(2) Shares and other equity other than portfolio investments Increase (+) Reduction (-)Other financial assets (F.1, F.6 and F.7)

Table 3


Adjustments Net incurrence (-) of liabilities in financial derivatives (F.34)Net incurrence (-) of other liabilities (F.5, F.6 and F.7)Issuances above(-)/below(+) nominal {face} valueDifference between interest (EDP D.41) accrued(-) and paid(4)(+) of which: interest flows attributable to swaps and FRAsRedemptions of debt above(+)/below(-) nominal valueAppreciation(+)/depreciation(-)(3) of foreign-currency debt (5)Changes in sector classification (K.12.1)(5) (+/-)Other volume changes in financial liabilities (K.7, K.8, K.10)(5)(-)

Statistical discrepanciesDifference between capital and financial accounts (B.9-B.9f)Other statistical discrepancies (+/-)

Change in central government (S.1311) consolidated gross debt (for sub-sectors, only:)Central government contribution to general government debt (a=b-c)Central government gross debt (level) (b) Central government holdings of other subsectors debt (level) (c)

Table 3 suite


Trade credits and advances (AF.71 L)

Amount outstanding in the government debt from the financing of public undertakings

In case of substantial differences between the face value and the present value of government debt, please provide information on

i) the extent of these differences:

ii) the reasons for these differences:

Gross National Income at current market prices (B.5*g)(1)

(1) Data to be provided in particular when GNI is substantially greater than GDP.

Table 4


Supplementary table for the financial crisis

Part 1 : Net revenue/cost for general government (impact on government deficit)A REVENUE (a+b+c+d)a) Guarantee fees receivable b) Interest receivablec) Dividends receivabled) OtherB EXPENDITURE (e+f+g+h)e) Interest payablef) Capital injections recorded as deficit-increasing (capital transfer)g) Calls on guaranteesh) OtherC Net revenue/cost for general government (A-B)

Part 2 : Outstanding amount of assets, actual liabilities and contingent liabilities of general government

Assets / Liabilities D Closing balance sheet a) Loansb) Securities other than sharesc) Shares and other equity

d) Contingent liabilities and assets outside gen. gov. (guarantees)e) Securities issued under liquidity schemes (not in gov. Debt)f) Special purpose entities outside gen. gov. (guarantees)


Table 1: "Revision of general government net lending (+)/ net borrowing (-) and revision

of general government consolidated gross debt"Table 2: Breakdown of financial transactions included in the working balanceTable 3: Adjustments for sector delimitation in EDP tablesTable 4: Breakdown of other accounts receivable/payable (F.7) reported in EDP tablesTable 5: Taxes and social contributions: other accounts receivable/payable (F.7) of

general governmentTable 6: Recording of EU flows in EDP tablesTable 7: Military equipment expenditure (weapons and supporting equipment)Table 8: Central government claims, debt cancellationTable 9: Guarantees recordingTable 10: Capital injections, super-dividends and privatisations Table 11: Public-Private Partnerships (PPPs)Table 12: Securitisation operations Table 13: Sale and leaseback operations

Questionnaire relating to the EDP notification tables

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The ESA GFS tables (transmission programme)

A number of tables out of 29 are specifically dedicated to GFS (consistent with data notified)

Table 2 (annual): "Main aggregates of general government" showing Revenue and Expenditure, highly relevant for government (t+ 3/9)

Table 9 (annual) "Detailed tax and social contribution receipts by type of tax and social contribution and receiving subsector including the list of taxes and social contributions according to national classification" (T+9)

Table 11 (annual) "General government expenditure by function" (t+12)

Table 25 "Quarterly Non-Financial Accounts of General Government" (t+3)

Table 26 (quarterly) "Financial accounts of general government" (t+3) Table 28 (quarterly) "Government debt (Maastricht debt) for general

government"



Annex: ESA central framework and GFS transactions and aggregates(abstract from ESA10chapter 20)

The ESA central frameworkIn the ESA central framework, net lending/net borrowing (B.9) is the balancing item of the capital account. The balancing item of general government in the ESA GFS presentation is identical to the net lending/net borrowing (B.9). In the ESA central framework, the first account is the production account, and therefore the first resource of an institutional sector in the ESA is its output. As the majority of services provided by government are not sold at economicallysignificant prices and so are non-market, government output is measured by convention as the sum of production costs.Similarly, final collective consumption expenditure, consisting of services provided to the community by government such as general services, defence, safety and public order, are measured as the sum of production costs. Also by convention, collective consumption expenditure (P.32) is equal to the actual finalconsumption (P.4) of government.Final individual consumption expenditure of households provided directly by government on a non-market basis is also measured by its production costs.As a result, two types of flows are "imputed" in the ESA accounts of government:1) On the resources side, the non-market output, other (P.132) in the production account;2) On the uses side, the actual final consumption (P.4) and the social transfers in kind - non-market production (D.631), in the redistribution of income in kind account, and in "use of adjusted disposable income account.


(annex)

The ESA GFS presentation of statisticsThe same basic transaction categories are used in the ESA GFS presentation, but mainly on the basis of actual monetary flows, to obtain the total revenue and the total expenditure of government. Only a selection of imputed flows is taken into account: imputed social contributions and capital transfers in kind.Eliminating from the resources side the non-market output (P.132) to obtain total revenue, and eliminating from the uses side the actual final consumption (P.4=P.32) and the social transfers in kind - non-market production (D.631) to obtain total expenditure……results in the same balancing item: the net lending/net borrowing (B.9).The only social transfers in kind that are accounted for in the GFS aggregate total expenditure of government are social transfers in kind provided to households via market producers (D.632), as they are subject to real payments of government units. These transactions are also those to be added to the sum of production costs (equal to non-market output, other - P.132) to obtain the final consumption expenditure of the general government.P.3 = P.132 + D.632


(annex)

ESA Resources ESA GFS Revenue

P.1 Output, of whichMarket output (P.11) Sales of goods and servicesOutput for own final use (P.12) Sales of goods and servicesNon-market output (P.13), of which:- Payments for non-market output (P.131) Sales of goods and services- Non-market output, other (P.132) Not accounted for in Total revenue

D.2 Taxes on production and imports (receivable) Total taxesD.3 Subsidies (receivable) Other current revenueD.4 Property income Other current revenueD.5 Current taxes on income and wealth Total taxesD.61 Social contributions Total social contributionsD.7 Other current transfers Other current revenueD.91r Capital taxes (receivable) Total taxesD.92r Investment grants (receivable) Other capital revenueD.99r Other capital transfers (receivable) Other capital revenue


(annex)

ESA Uses and capital transactions ESA GFS Expenditure

P.2 Intermediate consumption Intermediate consumptionD.1 Compensation of employees Compensation of employeesD.2 Taxes on production and imports (payable) Other current expenditureD.3 Subsidies (payable) SubsidiesD.41 Interest InterestD.4 Property income (excluding D.41) Other current expenditureD.5 Current taxes on income Other current expenditureD.62 Social benefits other than social transfers 1in kind Social benefits other than ST in kind

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2) Methodological framework required for data compilation

When EDP started: ESA 1979 Eurostat had to take decisions, as this National Accounts Manual was

of small (if any) usefulness for some issues arising very quickly (so, when possible, reference to manuals below)

SNA93, followed by ESA95 (close but not identical – applicable from 2000 onwards) was an important step from a methodological point: 1) the shift from cash to accrual 2) the inclusion of balance sheets and thus the identification of change in

stocks factors (transactions / other flows) 3) a change in principles for government sector delineation and definition

of institutional units 4) the identification of new financial instruments (notably financial

derivatives) 5) the notion of rearranged transactions ("rerouting", "partitioning" and

"recognising the principal party to a transaction") 6) the definition of consolidation and netting


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Eurostat Manual But high need for interpretation, implementation guidance and

supplementation In 1999, Eurostat elaborates the "Manual on Government Deficit and

Debt" - MGDD (more recent edition in 2013) The Manual has a specific structure for each chapter ("background of

the issue", "treatment in national accounts", "rationale of the treatment") and provides simplified examples (under the form of "T accounts") but it is not a compilation guide (normally, no mention of sources data, except in some cases)

The content of the Manual is largely at the initiative of Eurostat (coordination, propositions), based on its control experience but is written in cooperation with experts from Member States (Task Forces)

It may also result from a request from Member states facing a specific issue asking for Eurostat advice (rules of procedures specified in 2009); result is included in the Manual if considered by Eurostat " "of common interest"

From 2012 onwards, in principle, annual edition of the Manual Shortly, a new edition for the adaptation to ESA10


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The structure of the Manual reflects what must be covered by the GFS methodological framework

What is the delineation of the government sector? What is the time of recording of transactions? How to record the operations, frequently very specific, between

government and public corporations, notably "capital injections"? How to record the relations between government and the financial

sector (including the central bank and "defeasance")? Which problems are raised by the sales of (financial and non-

financial) assets by government? What are the basic criteria for recording leases, licences and

concessions (including public-private-partnerships)? How to record the debt related transactions by government and

guarantees it may grant? What is the measurement of government debt, including operations

on derivatives repos and securities lending?


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Thank you for your attention

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20 nov. 2013 1 presentation of gfs in the european statistical system (with emphasis on the...

Documents

government sector

edp notification tables

gfs data

local government

state government

presentation of gfs

consolidated edp

general government expenditure