WRITTEN QUESTION E-3363/02

by Paulo Casaca (PSE) to the Commission

(27 November 2002)

Subject: Correcting future situations in Portugal

According to the Diário de Noticias of 11 November 2002, under the heading Deficit to exceed 3 %, notice is given of a circular from the State Secretariat for the Budget instructing its services that spending needs to be held over to 2003, given the current budgetary restrictions.

The same paper says that some items for previous years are being used to pay 2002 bills, which affects the deficit from the point of view of the national accounts. This is already visible in the statements of budgetary expenditure, and could lead to requests for the Banco de Portugal (Central Bank) and the [Portuguese] Court of Auditors to intervene.

Are these the procedures which merited such praise from the Commission as a way of fighting the deficit in Portugal? Does the Commission believe that this is the right way to follow up its guidelines on budgetary discipline?

Answer given by Mr Solbes Mira on behalf of the Commission

(8 January 2003)

The figures relevant for budgetary surveillance purposes, in particular for the implementation of the Stability and Growth Pact are those calculated on a national accounts basis. The rules and procedures adopted to compile national accounts are laid down in the European system of national and regional accounts in the Community (ESA 95). As a general principle, all transactions are recorded on an accrual basis; that is, when economic value is created, transformed or extinguished, or when claims and obligations arise, are transformed or cancelled(1). As an example, government expenditure is recorded when the commitment is made, and a corresponding liability is incurred, and not necessarily when the actual payment takes place, irrespectively of the procedure followed on a public accounts basis for the time of recording of a transaction. The latter is perhaps what the quote from the newspaper article published in Diário de Notícias on 9 November 2002, mentioned by the Honourable Member, refers to. Moreover, the Commission does not as a rule comment on opinion articles published by the press, mentioning other institutions than the Commission, in particular when they are only partly quoted, as in this case.

In the framework of budgetary surveillance in general, and in particular, of the application of Council Regulation (EC) No 3605/93(2), which provides for the notification of semi-annual deficit and debt data, the Commission is entrusted with the checking of the data notified by Member States, as regards their compliance with the recording rules and procedures laid down in the ESA 95 system. The data have to be validated by the Commission before it can be used for the purposes of budgetary surveillance, according to the relevant Community legislation.

(1) Council Regulation (EC) No 2223/96 of 25 June 1996 on the European system of national and regional accounts in the Community OJ L 310, 30.11.1996.

(2) Council Regulation (EC) No 3605/93 of 22 November 1993 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community OJ L 332, 31.12.1993.