WRITTEN QUESTION P-2759/00

by Francesco Speroni (TDI) to the Commission

(2 August 2000)

Subject: Unreliability of the accounts of the Italian public authorities

The consolidated treasury accounts and the statement of revenue and expenditure of the public authorities for 1997 and 1998 contained in the Annual Treasury Report presented by the Minister for the Treasury to the Italian Parliament on 4 April 2000 differ substantially from those contained in the report presented on 18 March 1999 and are in contradiction with the General Financial Statement of the Italian State for 1997 approved by Parliament, without any note of explanation.

In particular, in the statement of revenue and expenditure both the net debt burden of the public authorities and the GDP are different, although the ratio between them (Maastricht parameters) for 1997 is unchanged. The European Economic Research and Forecasting Centre has reported to Parliament on the lack of transparency, the inconsistencies and missing information and the downright incomprehensibility of the Treasury Report not only for persons unconnected with the work. The statements of revenue and expenditure, which are important for the purposes of the assessment of convergence provided for by the Maastricht Treaty, are said to have been drawn up by the ISTAT (Italian Central Statistical Office) which gradually adjusts the figures as the available data are updated, and as a result of the auditing process and the changes to the reference accounting system, in agreement with Eurostat, and are said not to have been formally approved by the State. The balance sheets for various sectors of the Italian civil service reach ISTAT and the State years after the end of the corresponding financial years. The Italian Court of Auditors has stated that the situation regarding the information on public accounts is serious because of the lack of transparency and failure to produce them on time, emphasising the lack of precise, methodical links between the various public accounts and pointing out that for the purposes of Maastricht, there are several figures and explanations which may differ, perhaps greatly, from those approved by Parliament at its budget part-session.

Can the Commission therefore answer the following questions:

1. Is the Commission aware of, and does it know, the precise reasons for these discrepancies between the values given in the accounts?

2. Does it know and share the criticisms made to the Italian Parliament by the European Economic Research and Forecasting Centre and the Court of Auditors?

3. Does ISTAT prepare the national statements of revenue and expenditure for the EU and if so, on what legal basis?

4. What instruments of inspection and auditing of the Italian statements of revenue and expenditure are available to the European Union?

5. What level of reliability and certainty does the Commission ascribe to the data provided up to now by Italy to the EU?

6. Is the State answerable for any errors or false figures given in the national statements of revenue and expenditure, and if so, to what extent?

7. Does the Commission intend to take any measures in this connection, and if so, what?

Answer given by Mr Solbes Mira on behalf of the Commission

(29 September 2000)

Economic accounts are drawn up by the Member States under their own responsibility. However, they must conform to the European system of national accounts (ESA). Italy, like the other Member States, has complied with the Community rules which have established a changeover from the old national accounting methodology (ESA 79), to the new methodology (ESA 95).

The Commission, through its statistical office (Eurostat), verifies the application of ESA 95 by all Member States and to this end conducts missions to the Member States on a regular basis. If new questions arise, they are discussed and dealt with at a European level. Decisions are made public through press releases. Eurostat verifies their application in the Member States.

Twice a year, the Member States must report to the Commission figures for government deficit and debt levels and for gross domestic product under 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 Community(1), as amended by Council Regulation (EC) No 475/2000 of 28 February 2000(2).

The Commission considers that the figures notified by Italy through the deficit and debt reporting exercise are reliable, on account of the procedures described above.

The discrepancy mentioned by the Honourable Member is essentially due to the change in the accounting methodology, which has had an impact on the figures for the general government deficit, the public debt, and the gross domestic product. The Relazione trimestrale di cassa (RTC) of 18 March 1999 was based on figures in ESA 79, as were the deficit, debt and GDP figures reported to the Commission in March 1999, while the RTC of 4 April 2000 is based on figures in ESA 95, as are the figures reported to the Commission in March 2000.

The comments made by the Centro Europa Ricerche (CER) and by the Corte dei Conti (State Audit Court) do not concern the effect of the switchover to ESA 95, but rather the need for more transparency in the presentation of the state sector accounts in the RTC and greater comparability between the state sector budget and the consolidated account of the general government. The Commission, as a user of public finance information, welcomes improvements in these areas.

The Commission considers that the other questions raised do not fall within its competence and should be addressed to the Italian authorities.

(1) OJ L 332, 31.12.1993.

(2) OJ L 58, 3.3.2000.