WRITTEN QUESTION E-3527/01 by Christopher Huhne (ELDR) to the Commission. Capital and current spending.
Date: 2002-01-08
Institutions: European Parliament, Provisional data
Subjects: European accounting system, expenditure, investment, private investment, private sector, public finance, public financing, public sector

4.7.2002

EN

Official Journal of the European Communities

C 160 E/135

ESA95 is a comprehensive system of national accounting. It notably gives a precise definition of the
expenditures of the general government sector. Member States must follow the accounting rules described
in ESA95.

In cases of difficulties in interpreting ESA95 rules concerning for example off budget items, Eurostat
organises meetings and consultations with Member States in order to reach an agreement on a correct and
homogeneous interpretation.

(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) The definition of general government expenditure and revenue is provided in the Commission Regulation (EC) No
to general

1500/2000 of 10 July 2000 implementing Council Regulation (EC) No 2223/96 with respect
government expenditure and revenue, OJ L 172, 12.7.2000.

(2002/C 160 E/170)

WRITTEN QUESTION E-3527/01

by Christopher Huhne (ELDR) to the Commission

(8 January 2002)

Subject: Capital and current spending

How does

1.
spending undertaken under
arrangements such as the Private Finance Initiative or Public Private Partnerships when entering them
into the public accounts for Maastricht comparability purposes?

the Commission currently treat capital and current

2. What is the impact, if any, on both the flow and stock accounts (if stocks are measured)?

3.

4.

Has the Commission changed this treatment recently?

Is it considering a change in treatment?

Answer given by Mr Solbes Mira on behalf of the Commission

(19 March 2002)

1.
Partnership-type arrangements between the public sector and private enterprise may take many
different forms. Private ownership may be introduced into state-owned businesses, or private sector
expertise and finance may be used to exploit the commercial potential of government assets. There can
also be arrangements whereby the public sector contracts to purchase services long-term,
to take
advantage of private sector skills, and where the risk of financing and making a return on capital is with
the private sector. The service may include maintaining, enhancing or constructing the necessary
infrastructure.

General guidance on how capital and current spending should be treated statistically in such arrangements
is found in the Eurostat ‘ESA95 Manual on government deficit and debt’. The key question is the extent to
which risk is transferred from the government sector to the corporation sector. This helps to determine in
which sector expenditure on the infrastructure should be recorded, and how payment flows between the
two sectors should be recorded. Broadly speaking, the most significant impact on government finances is
that many of
these arrangements have the effect of spreading the cost of capital spending (fixed
investment) over their period of use, thus avoiding a higher initial cost to the government. A description
of the type of impact is given in the answer to question 2 below.

2.
The type of impact of such arrangements on flows (affecting the government deficit/surplus as
measured according to Community methodology) and on stocks (affecting the government debt) is as
follows.

the risk is mainly with the corporation,

If
the fixed investment should not be recorded with the
government, so the government deficit improves accordingly. However, the arrangements may involve
regular service payments from government to the corporation, which would increase the deficit by these
amounts over the contract period. There is not normally an impact on government debt (although a higher

C 160 E/136

Official Journal of the European Communities

EN

4.7.2002

leasing, where
deficit might result in an increase in debt). Nevertheless,
government is considered to bear most of the risk, the debt will increase initially by the amount of the
investment.

in cases similar to financial

3.

There have been no changes recently in statistical treatment.

There are no plans for changes in statistical treatment. However,

4.
methodology will be further refined.

it is always possible that the

(2002/C 160 E/171)

WRITTEN QUESTION E-3529/01

by Christopher Huhne (ELDR) to the Commission

(8 January 2002)

Subject: Capital expenditure on Private Finance Initiatives and Public Private Partnerships

1. Will the Commission specify the annual capital expenditure undertaken in schemes such as the
Private Finance Initiative or the Public Private Partnerships for the last five years, and for as far into the
future as each Member State projects?

2. Will it further express such capital spending as a percentage of GDP and projected GDP?

Answer given by Mr Solbes Mira on behalf of the Commission

(14 March 2002)

The Commission does not systematically collect separate information on the annual capital expenditure
undertaken in past, present or future partnership-type schemes in each Member State, and in the bi-annual
notifications of debt and deficit the Member States are not obliged to identify these transactions.

The Commission does not calculate nor publish such specific ratios.

(2002/C 160 E/172)

WRITTEN QUESTION E-3534/01

by Lord Inglewood (PPE-DE) to the Council

(8 January 2002)

Subject: Signing of the Euratom Treaty

Does the Council consider that, by signing the Euratom Treaty, a Member State recognises the legitimacy
of civil nuclear establishments in other Member States, provided that they have complied with the
provisions of that Treaty?

Reply

(25/26 March 2002)

The Council would like to draw the attention of the honourable MEP to the fact that it is not the Council
but the Intergovernmental Conference, which is negotiating and concluding the Treaties. The Council can
therefore not
from the
procedural point of view as it results of the Treaties themselves, which a Member State may give to its
signing of a Treaty. The Commission is responsible for monitoring compliance with the Treaties.

take a position on the possible interpretation nor the significance, except