Council Regulation (EC) No 475/2000 of 28 February 2000 amending Regulation (EC) No 3605/93 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community
Date: 2000-02-28
Institutions: Council of the European Union
Subjects: European accounting system, Protocol (EU), Treaty on European Union, loss, public administration, public debt

3. 3. 2000

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Official Journal of the European Communities

L 58/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 475/2000

of 28 February 2000

amending Regulation (EC) No 3605/93 on the application of the Protocol on the excessive deficit
procedure annexed to the Treaty establishing the European Community

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular the third subparagraph of Article
104(14),

(4)

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Whereas:

(1)

(2)

The definitions of ‘government’, ‘deficit’ and ‘investment’
are laid down in the Protocol on the excessive deficit
procedure annexed to the Treaty establishing the Euro-
pean Community and in Regulation (EC) No 3605/93 (2)
by reference to the European system of
integrated
economic accounts; Regulation (EC) No 2223/96 (3)
replaced that system with the European system of
national and regional accounts in the Community (here-
inafter referred to as ‘ESA 95’).

The definition of ‘government debt’
laid down in the
Protocol on the excessive deficit procedure and in Regu-
lation (EC) No 3605/93 needs to be further amplified by
a reference to the classification codes of ESA 95; in the
case of financial derivatives, as defined in ESA 95, there
is no nominal value identical to that for other debt
instruments; therefore, financial derivatives must not be
included with the liabilities making up government debt
for the purposes of the Protocol on the excessive deficit
procedure; for liabilities which are subject to agreements
fixing the exchange rate, this rate should be taken into
account in the conversion into national currency.

(3)

ESA 95 provides a detailed definition of gross domestic
product at current market prices, which is appropriate
for the calculation of the ratios of government deficit to
gross domestic product and of government debt to gross

domestic product referred to in Article 104 of
Treaty.

the

Consolidated government
interest expenditure is an
important indicator for monitoring the budgetary situa-
tion in the Member States; interest expenditure is intrins-
ically linked to government debt; government debt to be
reported to the Commission by the Member States has
to be consolidated within the government sector; the
levels of government debt and of interest expenditure
should be made mutually consistent; the methodology
of ESA 95 (point 1.58) recognises that, for certain kinds
of analysis, consolidated aggregates are more significant
than overall gross figures; the way in which the figures
on interest expenditure are to be provided to the
Commission by the Member States should be clarified.

(5)

(6)

The definitions and classification codes of ESA 95 may
be subject to revision in the context of the necessary
harmonisation of national statistics or for other reasons;
revisions of ESA 95 or amendments to its methodology
are decided by the Council or the Commission in
accordance with the rules on competence and procedure
laid down in the Treaty and in Regulation (EC) No
2223/96.

Article 8(2) of Regulation (EC) No 2223/96 stipulates
that the former European system of integrated economic
accounts was to continue to be used for the purposes of
Member States' reports to the Commission under the
excessive deficit procedure during a transitional period
until the reporting exercise of 1 September 1999,

HAS ADOPTED THIS REGULATION:

Article 1

(1) Opinion delivered on 17 February 2000 (not yet published in the

Official Journal).

(2) OJ L 332, 31.12.1993, p. 7.
(3) OJ L 310, 30.11.1996, p. 1.

Regulation (EC) No 3605/93 is hereby amended as follows:

1. Articles 1 and 2 shall be replaced by the following text:

L 58/2

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Official Journal of the European Communities

3. 3. 2000

the

deficit

lending)

(S.1314),

“Government

(surplus)” means

(S.1312),
security funds”

“local government”
to the

‘Article 1
1.
For the purposes of the Protocol on the excessive
deficit procedure and of this Regulation, the terms given in
the following paragraphs are defined according to the Euro-
pean system of national and regional accounts in the
Community (hereinafter referred to as “ESA 95”), adopted
by Regulation (EC) No 2223/96 (*). The codes in brackets
refer to ESA 95.
2.
“Government” means the sector of “general govern-
ment” (S.13), that is “central government” (S.1311), “state
(S.1313) and
government”
“social
exclusion of
commercial operations, as defined in ESA 95.
The exclusion of commercial operations means that the
sector of “general government” (S.13) comprises only insti-
tutional units producing non-market services as their main
activity.
3.
net
the sector of “general
(B.9) of
borrowing (net
government” (S.13), as defined in ESA 95. The interest
comprised in the government deficit is the interest (D.41),
as defined in ESA 95.
fixed
investment” means
“Government
4.
capital formation (P.51) of the sector of “general govern-
ment” (S.13), as defined in ESA 95.
5.
“Government debt” means the total gross debt at
nominal value outstanding at the end of the year of the
sector of “general government” (S.13), with the exception of
those liabilities the corresponding financial assets of which
are held by the sector of “general government” (S.13).
Government debt is constituted by the liabilities of general
in the following categories: currency and
government
deposits (AF.2); securities other than shares, excluding finan-
cial derivatives (AF.33) and loans (AF.4), as defined in
ESA 95.
The nominal value of a liability outstanding at the end of
the year is the face value.
The nominal value of an index-linked liability corresponds
to its face value adjusted by the index-related change in the
value of the principal accrued to the end of the year.
Liabilities denominated in a foreign currency, or exchanged
from one foreign currency through contractual agreements
to one or more other foreign currencies shall be converted
into the other foreign currencies at the rate agreed on in
those contracts and shall be converted into the national

the gross

currency on the basis of the representative market exchange
rate prevailing on the last working day of each year.

Liabilities denominated in the national
currency and
exchanged through contractual agreements to a foreign
currency shall be converted into the foreign currency at the
rate agreed on in those contracts and shall be converted into
the national currency on the basis of the representative
market exchange rate prevailing on the last working day of
each year.

Liabilities denominated in a foreign currency and exchanged
through contractual agreements to the national currency
shall be converted into the national currency at the rate
agreed on in those contracts.

Article 2

For the purposes of the Protocol on the excessive deficit
procedure and of this Regulation, gross domestic product
means gross domestic product at current market prices
(GDP mp) (B.1*g), as defined in ESA 95.

(*) 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,
p. 1).’

2. In Article 4(2), at the end of the second indent, the terms
‘subsectors S61, S62 and S63’ shall be replaced by ‘sub-
sectors S.1311, S.1312, S.1313 and S.1314’.

3. At the end of Article 5, the terms ‘and interest expendi-
expenditure

replaced by ‘and interest

ture’
shall be
(consolidated)’.

4. Article 7 shall be replaced by the following text:

‘Article 7

In the event of a revision of ESA 95 or of an amend-
ment
to its methodology to be decided on by the
Council or the Commission in accordance with the rules
on competence and procedure laid down in the Treaty
the Commission
and in Regulation (EC) No 2223/96,
shall
to ESA 95 into
Articles 1, 2 and 4.’

introduce the new references

Article 2

This Regulation shall enter into force on the day of
its
publication in the Official Journal of the European Communities.

It shall apply from 1 January 2000.

This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Brussels, 28 February 2000.

For the Council

The President

J. PINA MOURA