Communication from the Commission to the European Parliament and the Council on the need and the means to upgrade the quality of budgetary statistics
Date: 2002-11-27
Institutions: European Commission
Subjects: Eurostat, budget deficit, budget policy, public debt, stability pact, statistics

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 27.11.2002
COM(2002) 670 final

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

on the need and the means to upgrade the quality of budgetary statistics

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

on the need and the means to upgrade the quality of budgetary statistics

1.

INTRODUCTION

The excessive deficit procedure (EDP) was introduced in the Maastricht Treaty of 1992 and
has  been  in  operation  since  1994,  with  the  beginning  of  the  second  stage  for  achieving
economic  and  monetary  union,  after  adoption  of  secondary  legislation  (Council  Regulation
(EC) No 3605/931). Its procedural steps and quantitative criteria are described in Article 104
(ex Article 104c) of the Treaty and in the Protocol on the excessive deficit procedure annexed
to the Treaty.

In  1997,  the  EDP  was  clarified  and  reinforced  by  Council  Regulation  (EC)  No 1467/97  on
speeding  up and clarifying the  implementation  of  the  excessive  deficit  procedure2,  which  is
one  of  the  two  regulations  that,  together  with  the  European  Council  Resolution  of  17  June
19973, constitute the Stability and Growth Pact (SGP). The EDP and the SGP have given a
major  impetus  to  improving  EU  governments’  budgetary  positions,  and  are  essential
elements in the co-ordination of budgetary policies in the EU and EMU.

In the EU economic policy framework, compliance with budgetary discipline is examined on
the  basis  of  two  quantitative  criteria  for  the  government  deficit  and  debt.  Therefore,  the
quality  of  statistical  data  is  crucial  to  ensure  adequate  implementation  of  the  agreed
budgetary surveillance framework and effective co-ordination of budgetary policies. The
drafters of the Maastricht Treaty were already mindful of the issue of statistical data. Indeed,
as  established  by  the  Protocol,  statistical  data  are  compiled  by  Member  States  according  to
objective  rules  –  “deficit  means  net  borrowing  as  defined  in  the  European  System  of
Integrated Economic Accounts”4 – and “shall be provided by the Commission”. In this way,
the  Treaty  drafters  wanted  to  ensure  that  budgetary  statistical  data  are  of  high  quality  and
comparable across countries.

The provision of statistical data by the Commission implies that, beyond other responsibilities
in  the  surveillance  of  budgetary  situations  in  Member  States  and  in  the  co-ordination  of
budgetary  policies,  the  Commission  acts  as  the  statistical  authority  in  this  domain.
However,  given  that the  Commission does  not  directly  compile data in  each  Member  State,
Council Regulation (EC) No 3605/93 set  up a  reporting procedure  according  to  which  each
country  transmits  its  deficit  and  debt  levels,  and  other  associated  data,  twice  a  year  to  the
Commission. The quality of these data, in particular the compliance with the accounting rules,
is then assessed by the Commission before official publication.

Considerable progress has been achieved by Member States in the compilation and reporting
of  budgetary  statistics,  and  by  the  Commission  itself  in  harmonising  and  clarifying  the

1

2

3

4

OJ L 332, 31.12.1993, p.7.
OJ L 209, 2.8.1997, p.6.
OJ C 236, 2.8.1997, p.1.
In  the  meantime,  the  European  System  of  Integrated  Economic  Accounts  has  been  replaced  by  the
European System of National and Regional Accounts ESA95.

2

                                                
accounting  rules  and  in  checking  their  application  in  the  Member  States.  In  spite  of  such
progress, the system can be improved, as experience has revealed some weaknesses in terms
of reliability, transparency and timeliness of the budgetary statistics. These weaknesses may
have detrimental consequences on the EU economic policy framework. At a time when the
economic  policy  co-ordination  mechanisms  are  reinforced5,  there  is  also  a  need  to
introduce adaptations leading to an improvement in the quality of budgetary statistics.

The practices followed by the Commission, and by Eurostat on behalf of the Commission, in
interpreting the accounting rules and checking their implementation also need to be clarified,
streamlined and better explained to all interested parties.

The Commission considers that a strong commitment of all parties (Member States and
Commission) to a code of best practice will constitute a valuable step in upgrading the
quality, reliability and transparency of budgetary data. The code of best practice should
cover  (i) the  compilation  and  reporting  of  data  by  Member  States  –  including  strong
commitments  to  comply  strictly  with  the  accounting  rules,  to  ensure  the  consistency  of  the
reported  figures  with  other  data  and  to  guarantee  transparency  in  the  reporting;  (ii)  the
procedure to resolve technical difficulties and (iii) the assessment of the reported figures and
the provision of data by the Commission. The  Commission  proposes  such  a  code  and  urges
the Council to endorse it as soon as possible.

2.

CONTINUOUS PROGRESS SINCE MAASTRICHT

The  EDP  and  the  SGP  have  been  strong  catalysts  to  upgrade  the  relevance  of
government  accounts,  in  the  political  debate  in  the  Member  States  and  in  the  EU,  and  to
raise  the  quality  of  the  government  accounts.  The  budgetary  policy  debate  in  all  Member
States  is  now  focused  on  the  ESA95  government  accounts,  whereas  attention  was  formerly
centred on other deficit definitions that have a narrower scope, are less relevant for economic
analysis and are not harmonised across countries.

A major step has been taken with the adoption by all Member States of ESA95 as the national
accounting framework, to replace the former ESA79 system. ESA 95 became the accounting
framework for the budgetary surveillance at the EU level in 2000. ESA95 is a modern system
of  national  accounts,  which  has  a  strong  legal  basis  in  the  form  of  a  legally  binding
regulation6, while the previous accounting system was simply an administrative document.

Moreover,  secondary  legislation  has  recently  been  adopted  on  the  compilation  of  quarterly
government accounts7. Although the formal implementation of the excessive deficit procedure
is  based  on  annual  data,  quarterly  government  accounts  will  be  a  valuable  tool  to  monitor
budgetary developments in Member States and in the EU and EMU.

The  government  budgetary  statistics,  which  are  the  foundation  on  which  budgetary
surveillance is built, are now more reliable, complete, transparent and detailed, and are
published  in  a  more  timely  fashion  than when  the  Maastricht  Treaty  was  drafted  and

5

6

7

See the Communication from the Commission to the European Parliament and the Council: Reinforcing
the co-ordination of budgetary policies, COM (2002) 668 final of 27.11.2002.
Council Regulation (EC) No 2223 (OJ L 310, 30.11.1996, p. 1).
The  compilation  of  quarterly  government  accounts  is  regulated  by  the  Commission  Regulation
(EC) No 264/2000  on  short-term  public  finance  statistics  (OJ  L  29,  4.2.2000,  p.  4)  and  by  the
Regulation  (EC)  No  1221/2002  of  the  European  Parliament  and  of  the  Council  on  quarterly
non-financial accounts for general government (OJ L 179, 9.7.2002, p. 1).

3

                                                
signed. Moreover, thanks to efforts co-ordinated by Eurostat in harmonising accounting rules
and checking the respective implementation, the government accounts of Member States are
more comparable than before.

3.

CONCERNS ABOUT THE QUALITY AND TIMELINESS OF BUDGETARY STATISTICS

Despite  continuous  progress  over  almost  a  decade,  several  weaknesses  can  be  still
identified  in  the  procedures  followed  in  the  compilation  and  reporting  of  government
accounts  by  the  Member  States.  These  weaknesses  may  hinder  the  timely  and  effective
implementation of the budgetary surveillance mechanisms.

In several countries, the government accounts are not yet as reliable as they should be and are
subject to large revisions. More recently, the late identification in 2002 of an excessive deficit
in Portugal for 2001 and the large upward revisions in the government deficit and debt levels
of other Member States are cases in point. Non reliable statistics may lead to wrong policy
decision  at  national  and  European  level,  to  an  inefficient  co-ordination  of  economic
policies, and put the credibility of procedures and institutions at stake.

Furthermore, the government accounts of several countries are not transparent  enough.
For example, for several countries, the government deficit and the change in the debt level are
not  easily  reconcilable  with  other  indicators,  for  example  the  cash-based  balances  of  the
government subsectors. Moreover, the information on the transition between the government
deficit and the debt levels transmitted by the Member States is not detailed enough. The non-
transparency of accounts is an obstacle for a proper technical assessment of the compliance of
the  reported  figures  with  the  accounting  rules.  In  addition,  there  have  been  repeated
problems  in  the  transmission  of  government  data  by  some  Member  States,  notably  in
terms of timeliness8 and even completeness of the reporting tables.

These  concerns  are  also  amplified  with  the  perspective  of  enlargement.  Acceding  countries
have  in  general  less  developed  statistical  systems  than  current  Member  States.  Although
improvements have recently been made by acceding countries in terms of budgetary statistics,
significant further efforts are still required.

Notwithstanding  the  Commission’s  role  as  statistical  authority,  the  quality  of  the
government accounts depends primarily on each Member State. In this context, it should
be  noted  that  some  national  statistical  institutes  have  scarce  resources  to  compile  the
government  accounts  and  are  not  immune  from  political  pressures.  Moreover,  in  some
countries,  the  reporting  tables  are  prepared  by  the  respective  Ministry  of  Finance  and  the
national  statistical  institute  has  a  relatively  minor  role  in  the  process.  This  might  raise
concerns, as the statistics produced are the basis to assess the budgetary performance of each
country.

Experience  has  also  revealed  that  the  planned  data  for  the  current  year  reported  by  several
countries  are  frequently  outdated  forecasts.  As  a  result,  they  are  not  good  predictors  of  the
budgetary outcome and have relatively low value for budgetary surveillance.

8

For example, while most Member States satisfactorily adhered to the deadline of 1 September  for the
second reporting for 2002, France and Ireland were around ten days late, Germany was 24 days late and
Luxembourg 37 days late.

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4.

THE COMMISSION ROLE AS STATISTICAL AUTHORITY

The Commission fulfils the role of statistical authority as far as the EDP and the SGP are
concerned. It provides the statistical data to be used in the implementation of the EDP and the
SGP,  after  assessing  the  quality  of  the  data  reported  by  Member  States.  Moreover,  it  must
interpret the accounting rules whenever there are doubts on the classification of  government
transactions, and how such transactions affect the government deficit and debt levels.

In  the  internal  organisation  of  the  Commission,  the  tasks  of  scrutinising  the  reported
accounts  and  of  interpreting  the  accounting  rules  are  carried  out  by  Eurostat.  By
delegating  this  task  to  Eurostat,  the  Commission  wishes  that  the  accounting  and  statistical
issues are treated independently, by an impartial and technically competent body, according to
objective criteria. Moreover, this independence and technical competence is reinforced by the
assistance of the Committee of Monetary, Financial and Balance of Payment Statistics, which
gathers  statisticians  and  national  accountants  from  the  national  statistical  institutes  and
national central banks of all Member States, as well as Commission and ECB representatives.

The Commission’s role as statistical authority has been implemented smoothly since 1994 and
experience  has  been  accumulated  over  the  years.  However,  there  is  still  scope  to  clarify,
streamline and, in particular, to accelerate the procedure in order to increase the effectiveness,
expediency  and  transparency  of  action.  Furthermore,  it  is  important  to  spell  out  the  various
steps  leading  to  the  resolution  of  accounting  difficulties  and  to  clarify  the  Commission
auditing  powers.  Finally,  it  is  also  of  the  utmost  importance  that  the  Commission  role  as
statistical  authority  and  the  procedures  put  in  place  to  implement  this  task,  are  known  and
understood by Member States and by the public in general.

5.

CONCLUSION

Since  1994,  there  has  been  considerable  progress  in  the  budgetary  statistics,  thanks  to  the
efforts  of  Member  States  and  the  Commission.  The  ESA95  government  accounts  are  now
more reliable, complete, transparent and detailed, and are published in a more timely fashion
than when the excessive deficit procedure was set up. However, there are still some important
weaknesses in the budgetary statistics that are the basic foundation for budgetary surveillance
mechanisms at the European level. These weaknesses may have detrimental consequences on
the  EU  economic  policy  framework.  At  the  time  the  economic  policy  co-ordination
mechanisms  are  being  reinforced,  there  is  also  a  need  to  upgrade  the  quality  of  budgetary
statistics.

An  improvement  in  the  quality  of  budgetary  statistics  requires  effort  and  strong
commitments from all parties. The Commission believes that the reliability of statistics
would  profit  from  a  clarification  and  streamlining  of  procedures  followed  both  by  the
Member States and by the Commission. This clarification and streamlining should take
the  form  of  a  code  of  best  practice  that  all  concerned  parties  commit  themselves  to
implement.

As  an  annex  to  this  Communication,  the  Commission  proposes  such  a  code  and  urges
the  Ecofin  Council  to  endorse  it,  at  the  earliest  convenience,  before  the  next  EDP
reporting of 1 March 2003.

5

ANNEX

Code of best practice
on the compilation and reporting of data by Member States
and
the provision of data by the Commission
within the context of the excessive deficit procedure

1.

OBJECTIVES

This  code  presents  best  practice  on  the  compilation  and  reporting  of  general  government
deficit  and  debt  levels  by  the  Member  States,  and  for  the  provision  of  data  by  the
Commission, within the context of the excessive deficit procedure (EDP).

The  code  of  best  practice  clarifies  and  streamlines  rules  and  procedures  used  for  data
processing  in  the  context  of  the  excessive  deficit  procedure.  It  does  not  change  the
definitions, deadlines or obligations established by the legal acts in force.

2.

LEGAL BASIS AND PROCEDURE

The  Protocol  on  the  excessive  deficit  procedure  annexed  to  the  Treaty  establishing  the
European  Community  stipulates  in  Article 4  that  “The  statistical  data  to  be  used  for  the
application  of  this  Protocol  shall  be  provided  by  the  Commission”.  As  a  result,  the
Commission fulfils the role of statistical authority.

Since the Commission does not directly compile government data in the Member States, it has
to  rely  on  data  which  are  compiled  and  reported  by  the  national  authorities.  The  reporting
procedure is governed by Regulation 3605/931, as amended2.

The reporting by  the  Member  States  to  the  Commission  of  government  data  consists  of  the
transmission of a set of reporting tables twice a year, before 1 March and before 1 September.
These tables cover the current year (planned data) and the previous four years (actual data).

For the provision of data, the Commission assesses the quality of the reported deficit and debt
data,  certifies  or  amends  the  reported  figures  and  publishes  actual  data.  Eurostat,  the
Statistical Office of the European Communities, is the Commission service in charge of
assessing  data  quality  and  of  providing  the  actual  statistical  data  to  be  used  for  the
implementation  of  the  excessive  deficit  procedure,  on  behalf  of  the  Commission.  The
Commission  also  publishes  its  own  economic  forecasts  on  the  government  deficit  and  debt
level for the current and future years.

3.

COMPILATION AND REPORTING OF GOVERNMENT DATA

The reporting of government deficits and debt levels and associated data is the responsibility
of each Member State. Following the principle of subsidiarity, Member States are responsible
for arranging their internal procedures for the transmission of data to the Commission.

1

2

OJ L 332, 31.12.1993, p.7.
Council  Regulation  (EC)  No  475/2000  (OJ  L  58,  3.3.2000,  p.  1),  and  Commission  Regulation
(EC) No 351/2002 (OJ L 55, 26.2.2002, p. 23).

6

                                                
Although  institutional  arrangements  differ  among  Member  States,  the  best  practice  is  that
actual data are compiled by the national statistical institutes (NSIs). The national central
banks (NCBs) have also been involved in this process, in particular, in the compilation of the
actual government debt levels, given their experience in financial accounts.

To compile the government accounts, NSIs rely on primary data received from the ministries
of  Finance  and  other  government  departments,  from  regional  and  local  governments  and
social  security.  Governments  shall  provide  the  necessary  resources,  data  and  all  other
information  required  for  a  proper  classification  of  transactions  and  a  timely  compilation  of
government accounts.

For  the  purpose  of  data  quality  assessment  by  the  Commission,  NSIs  shall  provide  the
Commission with a detailed inventory of the procedures and basic statistics used for the
compilation of actual data. The inventory shall be regularly updated.

Planned data for the current year reported by the Member States are, in general, established by
the  ministries  of  Finance,  taking  into  account  the  most  recent  budgetary  decisions  and  the
economic  developments  and  prospects.  The  best  practice  is  that  planned  data  are
established  shortly  before  the  reporting  deadline,  thus  avoiding  the  transmission  of
outdated forecasts. The planned data must be established on the same methodological basis
as actual data, without breaks in series.

The  reporting  deadlines  (before  1  March  and  before  1  September  each  year)  must  be
strictly  respected  by  Member  States.  Should  a  country  be  unable  to  comply  with  these
deadlines,  because  of  exceptional  and  unforeseen  reasons,  it  should  promptly  inform  the
Commission of the reason for the delay and announce an expected reporting date.

Member States should inform the Commission which national institutions are responsible for
the EDP reporting.  The  reporting  tables should be  signed  by  these  institutions.  In  principle,
the national interlocutor for the Commission in accounting and methodological matters should
be the respective NSI.

COMPLIANCE WITH THE ACCOUNTING RULES, CONSISTENCY WITH OTHER DATA AND

4.
REVISIONS OF DATA

The Treaty Protocol on the excessive deficit procedure establishes that the statistical data to
be used for the  application of the  excessive  deficit procedure  are compiled  according to the
European  System  of  Integrated  Economic  Accounts.  The  version  of  the  accounting  system
currently in force is the European System of National and Regional Accounts (ESA95)3.

The  NSIs  have  compiled  national  accounts,  including  government  accounts,  for  many
years.  They  possess  the  necessary  expertise  for  a  correct  application  of  the  national
accounting rules. Therefore, they have become the guardians of the  ESA95 accounting
rules in the Member States. NCBs have also been involved in the compilation of financial
accounts.

When compiling and reporting government statistics, the national statistical authorities should
act in full scientific independence, in strict respect of the accounting rules. The accounting
rules  are  defined  in  Regulation  3605/93,  as  amended,  Regulation  2223/96  (the  ESA95

3

Council Regulation (EC) No 2223/96 (OJ L 310, 30.11.1996, p. 1).

7

                                                
regulation), as amended4, and in the ESA95 Manual on Government Deficit and Debt, which
gathers together the Eurostat interpretation of the accounting rules.

The  reported  data  should  be  consistent  with  other  statistical  data  transmitted  to  the
Commission (Eurostat) in other contexts5. These other statistics include in particular the data
transmitted  under  the  ESA95  transmission  programme  (Annex  B  of  Council  Regulation
2223/96), taking into account the rules that are specific for the excessive deficit procedure6.
Debt  data  should  be  in  line  with  the  government  financial  balance  sheets,  compiled  by
Member  States  and  transmitted  under  the  ESA95  transmission  programme,  taking  into
account the specific definition and valuation rules established by Regulation 3605/93.

Each EDP reporting should always contain the most recent data. Should the government
accounts  (actual  data  or  planned  data)  be  substantially  revised  after  the  transmission  of  the
reporting tables, the best practice is that the national authorities submit a revised reporting to
the Commission.7

5.

TRANSPARENCY IN THE REPORTING

To  ensure  consistency  and  transparency,  Regulation  3605/93  requires  Member  States  to
provide  the  data  which  explain  the  transition  between  the  State  balance  according  to  the
public  accounts  definition  of  deficit  –  typically  a  cash-based  balance  –  and  the  ESA95
government deficit/surplus, and between the government deficit/surplus and the change in the
government debt level (the so-called stock-flow adjustment).

In practice, most countries have transmitted information on the transition between the public
accounts definition of deficit and the ESA95 deficit/surplus for central government only. The
stock-flow adjustment has been provided for the general government sector as a whole.

Experience has shown that more detailed tables are needed for a proper monitoring and
analysis  of  the  reported  data.  The  best  practice  is  that  Member  States  provide  the  data
which  explain  the  transition  between  the  cash-based  balances  and  the  ESA95  government
deficit  for  all  government  subsectors,  for  each  of  the  years  covered  by  the  reporting.
Moreover,  the  stock-flow  adjustment  should  also  be  broken  down  by  subsector  and
accompanied  by  supplementary  information  on  the  most  relevant  transactions,  such  as
privatisation, capital injections into public enterprises, debt assumptions, tax arrears, etc., for
each  of  the  past  years  covered  by  the  reporting.  For  this  end,  the  Commission  will  present
revised reporting tables.

4

5

6

7

Council Regulation (EC) No 2223/96 has been amended at several occasions. The amendments that are
more relevant for general government data are Commission Regulation (EC) No 1500/2000 on general
government expenditure and revenue (OJ L 172, 12.7.2000, p. 3), Regulation (EC) No 2516/2000 of the
European  Parliament  and  of  the  Council  (OJ  L  290,  17.11.2000,  p.  1)  and  Commission  Regulation
(EC) No  995/2001  (OJ  L  139,  23.5.2001,  p.  3)  on  taxes  and  social  contributions  and  Regulation
(EC) No 2558/2001 of the European Parliament and of the Council on the reclassification of settlements
under swaps arrangements and forward rate agreements (OJ L 344, 28.12.2001, p. 1).
In  case  government  accounts  published  in  another  context  are  different  from  those  notified  to  the
Commission, the difference should be explained.
Annex V of ESA95, which was added to the accounting system by Regulation 2558/2001, establishes
that swap-related flows are treated differently in the context of the excessive deficit procedure.
On 22 November 1993, at the occasion of the adoption of Regulation 3605/93, the EU Council stated
(statement  8):  “In  the  interval  between  the  reporting  referred  in  Article  4(1)  [i.e.,  the  1 March  and
1 September reporting], the Member States undertake to inform the Commission of any major changes
in the deficit and debt figures already reported.”

8

                                                
Substantial  revisions  in  actual  data  reported  in  prior  notifications  should  be
documented. These revisions can be due to better information, changes in the classification
of units or transactions, improvements in data sources, changes in methods of estimation, or
any other reason. If necessary, the inventory of procedures and basic statistics will be revised.

6.

PROCEDURE TO RESOLVE TECHNICAL DIFFICULTIES

The  ESA95  rules  do  not  always  provide  precise  guidance  on  the  recording  of  government
transactions. This owes to the specificity of each country,  as  the  same  accounting  system is
applied by countries with different institutional arrangements, to the  diversity  and  multitude
of operations performed by the governments each year and to the increasing sophistication of
government transactions. In cases of doubt on the correct accounting treatment of a specific
government  transaction,  guidance  is  provided  by  the  general  principles  of  the  national
accounting system.

When  a  government  plans  a  specific  measure  or  transaction  for  which  there  are  doubts  as
regards the accounting treatment and the impact on the government deficit and debt, it should
seek advice from the  respective NSI. The  statistical  department  of  the  respective  NCB  may
also  be  asked  for  its  views.  The  best  practice  is  the  organisation  of  formal  and  regular
consultations  at  the  national  level  –  e.g.  by  establishing  a  tripartite  expert  committee  –,
which  would  facilitate  a  constructive  dialogue  between  statisticians  and  policy  makers.  To
avoid  ambiguities  in  the  political  process,  these  consultations  should  occur  before  the
measure is adopted or implemented.

In cases where the NSIs are not in a position to settle the issue, they should formally ask for
Eurostat  to  rule  on  the  matter.  Eurostat  will  liaise  with  other  Commission  departments,  if
necessary with the ECB’s Directorate General Statistics and with other experts and will give
prompt  advice  about  the  recording  in  the  ESA95  accounts  of  the  budgetary  transaction  in
question.  The  best  practice  is  that  the  formal  request  for  an  Eurostat  ruling  should  be
made  in  due  time  to  ensure  that  no  accounting  issue  is  left  pending  at  the  time  of  the
notifications  due  before  1  March  and  1  September.  Member  States  requesting  a  official
Eurostat decision must provide all information necessary for a decision to be made in a timely
manner.

In cases which are particularly complex, or are of general interest, Eurostat may consult the
Committee  on  Monetary,  Financial  and  Balance  of  Payment  Statistics  (CMFB8)  before
deciding9. When seeking the Eurostat interpretation of accounting rules, Member States may
request that the CMFB be consulted before Eurostat decides. All Member States must provide
Eurostat and the CMFB with the information that is necessary to decide on accounting issues
of general interest.

8

9

The CMFB was created by the Council Decision 91/115/EEC (OJ L 59, 6.3.1991, p.19), amended by
Council  Decision  96/174/EC  (OJ  L  51,  1.3.1996,  p.  48).  The  CMFB  has  adopted  internal  rules  of
procedure to deal with consultations for EDP purposes.
On  28  February  2000,  at  the  occasion  of  the  adoption  of  Regulation  475/2000  amending  Regulation
3605/93  on  the  application  of  the  Protocol  on  the  excessive  deficit  procedure,  the  EU  Council  stated
(statement 11/00): “The Council welcomes the extensive work done during recent years by Eurostat in
co-operation  with  national  authorities  –  according  to  a  procedure  involving  the  Committee  on
Monetary, Financial and Balance of Payment Statistics (CMFB) and other advisory groups – to resolve
methodological issues for the comparability of public finance data used in the context of the excessive
deficit procedure. The Council urges Eurostat to pursue such work, together with national authorities,
to deal with any technical difficulties which may be raised by the amendment of Regulation No 3605/93
and the switchover to ESA95”.

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The CMFB is a consultative committee and, therefore, its opinion is not binding for Eurostat.
However,  Eurostat  takes  the  utmost  account  of  the  opinions  expressed  by  the  CMFB.  The
CMFB members and, in particular, Eurostat guide their opinions by the highest standards of
integrity and scientific independence, according to purely technical criteria.

The final Eurostat decision – including if necessary the CMFB opinion - should be given
as promptly as possible, as a rule within six weeks after a Member State has requested
it.

Eurostat  can  also  consult  the  CMFB  and  take  decisions  on  the  accounting  of  government
transactions on its own initiative. The CMFB may also express opinions on its own initiative.

All  Eurostat  opinions  and  accounting  decisions  given  to  the  Member  States  shall  be
communicated  to  the  CMFB.  Moreover,  decisions  on  cases  of  general  interest  are  made
public10  and  collected  in  the  ESA95  Manual  on  Government  Deficit  and  Debt11,  thus
becoming  part  of  the  commonly  agreed  interpretation  of  ESA95.  Member  States  commit
themselves to respect the Eurostat decisions in order to ensure comparability of data.

On the occasion of the Eurostat decisions, Member States may be requested to retroactively
revise  their  government  deficit  and  debt  series,  whenever  such  a  revision  is  necessary  to
ensure the comparability of data among countries and across time.

7.

PROVISION OF DATA FOR THE EXCESSIVE DEFICIT PROCEDURE BY THE COMMISSION

Eurostat,  the  Statistical  Office  of  the  European  Communities,  is  the  Commission  service  in
charge  of  providing  the  actual  statistical  data  to  be  used  for  the  implementation  of  the
excessive  deficit  procedure,  on  behalf  of  the  Commission,  after  assessing  the  quality  of  the
reported data. Eurostat acts in accordance with the principles of impartiality, reliability,
scientific independence and transparency12.

The  assessment  of  the  reported  data  by  Eurostat  consists  in  checking  compliance  with  the
accounting rules, completeness, plausibility and consistency of data. The assessment is based
on the tables reported to the Commission, other information accompanying the reporting, any
other data, on the inventory of procedures and basic statistics, and on regular contacts with the
NSIs. Member States should promptly give Eurostat access to all information required
for the purpose of this assessment.

Eurostat publishes the actual deficit and debt data of Member States within a fortnight after
the official reporting date. Delays  in  the  reporting  by  any  Member State do  not  constitute a
motive for Eurostat to delay its publication. Eurostat may also publish the reporting tables for
past years13.

The Commission does not make public the reported planned data for the current year, since it
prepares  its  own  forecasts.  However,  the  Commission  informs  the  Economic  and  Financial
Committee (EFC) of the main results of the reporting, including planned data for the current

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The CMFB opinions are also made public simultaneously.
This manual is regularly updated.
See Article 285(2) of the Treaty and Article 10 of Council Regulation (EC) No 322/97 on Community
Statistics (OJ L 52, 22.2.1997, p. 1).
In  duly  justified  cases,  Member  States  may  ask  the  Commission  to  keep  confidential  data  or  other
information transmitted in the context of the reporting, assessment and certification procedures, as well
as during the consultation on the recording of specific transactions.

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year. Moreover, the Commission circulates copies of the reporting tables of all Member States
to the institutions that are responsible for the reporting at national level.

Eurostat  may  publicly  express  reservations  on  the  reported  data.  As  a  rule,  such
reservations will be made public when Eurostat publishes the reported deficit and debt levels.
If necessary and possible, Eurostat may amend the reported data. In these cases, Eurostat
will inform in advance the Member State concerned and the EFC President about the reasons
for its  reservation  and  how  it  wishes  to  communicate  the  issue  to  the  public.  If  the  issue  is
subsequently resolved, Eurostat will make public the withdrawal of its reservation.

Eurostat  is  entitled  to  audit  thoroughly  the  ESA95  government  accounts  of  each
Member State, on a regular basis. Such audits concern actual data only. Eurostat may request
other  Commission  departments,  the  ECB’s  Directorate  General  Statistics  and  CMFB
representatives to assist in these audits. These audits will concern both the implementation of
the accounting rules, and the compilation and estimation of basic data. The audit conclusions
are communicated to the CMFB and made public.

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