Proposal for a Council Regulation concerning the compilation and transmission of data on the quarterly government debt
Date: 2003-12-09
Institutions: European Commission
Subjects: budget deficit, data collection, data transmission, expenditure, public accounting, public administration, public debt, revenue

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 9.12.2003
COM(2003) 761 final

2003/0295 (CNS)

Proposal for a

COUNCIL REGULATION

concerning the compilation and transmission of data on the quarterly government debt

(presented by the Commission)

EN

  EN

EXPLANATORY MEMORANDUM

According to Article 104(2) of the EC Treaty, the Commission “monitors the development of
the  budgetary  situation  and  of  the  stock  of  government  debt  in  Member  States”.  This
monitoring is based on two criteria in particular: government deficit/surplus and government
debt, both being expressed as a ratio of GDP.

Council  Regulation  (EC)  No  3605/93,1  as  amended  by  Council  Regulation  (EC)  No
475/20002  and  Commission  Regulation  (EC)  No  351/20023,  defines  the  government  debt
outstanding at the end of the year (hereinafter annual government debt) that is relevant for the
excessive deficit procedure. It also lays down a timetable for the reporting to the Commission
of annual government deficit/surplus and of annual government debt.

Notwithstanding  the  reliance  placed  on  annual  government  deficit/surplus  and  debt  data  for
the  formal  implementation  of  the  excessive  deficit  procedure,  closer  monitoring  of  the
budgetary  situation  in  Member  States  requires  more  detailed  information,  for  example
detailed data on government revenue and expenditure, and more frequent data. Therefore, in
recent years, the European Parliament, the Council and the Commission have adopted several
legal acts in accordance with which the Member States are required to compile and transmit
to  the  Commission  detailed  annual  and  quarterly  government  accounts.  In  particular,
Commission  Regulation  (EC)  No  1500/20004  moved  the  date  of  the  first  transmission  of
detailed  annual  government  expenditure  and  revenue  data  from  August  to  March  each  year
account,  while  Commission
and 
Regulation (EC) No 264/20005  and  Regulation  (EC)  No 1221/2002  of 
the  European
Parliament  and  of  the  Council6  concern  the  compilation  and  transmission  of  quarterly
government non-financial accounts, including quarterly government deficit/surplus data.

government 

contents 

revised 

the 

the 

of 

The  proposal  for  a  regulation  of  the  European  Parliament  and  of  the  Council  on  quarterly
financial  accounts  for  general  government,  which  the  Commission  adopted  on  8  May  2003
(COM  (2003)  242  final),  will  also  contribute  to  increasing  the  detail  and  frequency  of
government  data.  The  proposal  concerns  the  compilation  of  quarterly  financial  accounts  for
general  government,  including  quarterly  government  outstanding  liabilities.  However,  such
figures will not allow government debt to be compiled quarterly because of differences in the
valuation  rules.  Those  differences  arise  because  the  outstanding  government  liabilities  that
will be compiled according to the proposal referred to above are valued at market value, that
is,  according  to  the  valuation  rules  of  the  European  System  of  National  and  Regional
Accounts  (ESA  95),  while  the  government  debt  that  is  relevant  for  the  excessive  deficit
procedure is compiled on the  basis  of nominal values.  Therefore, there is  currently  no legal
act relating to the quarterly compilation of government debt.

The extra work required for the Member States to compile the government debt on a quarterly
basis is very limited, in particular when compared with the obligations of the draft regulation
on quarterly financial accounts for general government. In fact, government debt is no more
than a subset of government financial liabilities with specific valuation rules.

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6

OJ L 332, 31.12.1993, p. 7.
OJ L 58, 3.3.2000, p. 1.
OJ L 55, 26.2.2002, p. 23.
OJ L 172, 12.7.2000, p. 3.
OJ L 29, 4.2.2000, p. 4.
OJ L 179, 9.7.2002, p. 1.

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The  attached  Commission  proposal  starts  by  explicitly  defining  quarterly  government  debt
(Article  1).  This  explicit  definition  of  quarterly  government  debt  –  rather  than  a  cross-
reference  to  Council  Regulation  (EC)  No 3605/93  –  is  necessary  since  the  definition  that
features  in  Article  1(5)  of  Council  Regulation  (EC)  No  3605/93  refers  to  the  “outstanding
debt  at  the  end  of  the  year”,  and  therefore  does  not  cover  the  possibility  of  compiling  the
government  debt  with  a  frequency  other  than  annual.  Moreover,  given  the  specific  role  of
Council  Regulation  (EC)  No  3605/93  in  the  implementation  of  the  excessive  deficit
procedure, it is preferable that the compilation and transmission of quarterly government debt
data is dealt with in an autonomous legal act. However, in spite of the difference concerning
the moment at which the debt is compiled (that is, end of each quarter instead of end of the
year),  the  definitions  of  quarterly  government  debt  and  of  annual  government  debt  are
consistent.  Furthermore,  the  proposed  regulation  includes  provisions  that  guarantee  that  the
two  definitions  remain  consistent  in  case  Regulation  (EC)  No 3605/93  is  amended  by  the
Council, or in case the Commission introduces new references to ESA 95, in accordance with
Article 7 of that Regulation.

The proposal provides that, as a rule, quarterly data on government debt should be transmitted
to the Commission at the latest three months after the end of the quarter to which they refer
(Article  2).  This  is  the  same  transmission  lag  laid  down  by  Regulations  (EC)  No  264/2000
and No 1221/2002 for quarterly non-financial government accounts, and by the proposal for a
regulation  on  quarterly  financial  accounts  for  general  government.  Moreover,  to  ensure  the
availability of a long statistical series, the proposed regulation lays down that back data will
be compiled from the first quarter of 2000 (Article 3).

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2003/0295 (CNS)

Proposal for a

COUNCIL REGULATION

concerning the compilation and transmission of data on the quarterly government debt

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) thereof,

Having regard to the proposal from the Commission7,

Having regard to the opinion of the European Parliament8,

Whereas:

(1)

(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 Community9 contains the definition of  government debt  outstanding  at  the
end of the year that is relevant for the purpose of the excessive deficit procedure and
lays down a timetable for the reporting to the Commission of annual government debt
and of other annual government data.

The availability of government data, including government debt data, with a quarterly
frequency  is  of  the  utmost  importance  for  the  economic  analysis  and  proper
monitoring of the budgetary situation in the Member States. Commission Regulation
(EC) No 264/2000 of 3 February  2000 on  the implementation of Council  Regulation
(EC)  No  2223/96  with  respect  to  short-term  public  finance  statistics10,  Regulation
(EC) No 1221/2002 of the European Parliament and of the Council of 10 June 2002 on
quarterly  non-financial  accounts  for  general  government11  and  Regulation  (EC)  No
[…./….]  of  the  European  Parliament  and  of  the  Council  of  [date]  on  quarterly
financial accounts for general government12 cover the compilation and transmission of
quarterly data on government non-financial and financial accounts, but do not extend
to quarterly government debt.

(3)

For the sake of clarity, and given the specific role of Regulation (EC) No 3605/93 in
the  implementation  of  the  excessive  deficit  procedure,  the  compilation  and

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OJ C, p. .
OJ C, p. .
OJ L 332, 31.12.1993, p. 7; Regulation as last amended by Commission Regulation (EC) No 351/2002
(OJ L 55, 26.2.2002, p. 23).
OJ L 29, 4.2.2000, p. 4.
OJ L 179, 9.7.2002, p. 1.
OJ L, p. .

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(4)

(5)

transmission of quarterly government debt data should be governed by an autonomous
legal act.

Quarterly government debt should be defined in a way that ensures consistency with
the  definition  of  government  debt  outstanding  at  the  end  of  the  year  of  Regulation
(EC) No 3605/93. This consistency should be maintained, in the event that the Council
amends Regulation (EC) No 3605/93 or the Commission introduces new references to
the European system of  accounts ("ESA 95") set  up  by Council  Regulation (EC)  No
2223/96 of 25 June 1996 on the European system of national and regional accounts in
the Community13 into Regulation (EC) No 3605/93.

Regulations  (EC)  No  264/2000,  No 1221/2002  and […./….]  state  that  quarterly  data
on  non-financial  and  financial  accounts  of  general  government  are  to  be  transmitted
three months after the end of the quarter to which they refer. This transmission lag is
also appropriate for quarterly government debt data,

HAS ADOPTED THIS REGULATION:

1.

2.

Article 1

Definition of quarterly government debt

For  the  purposes  of  this  Regulation,  "government"  means  the  sector  of  general
government as defined in the European 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.

The  quarterly  government  debt  means  the  total  gross  debt  at  nominal  value
outstanding  at  the  end  of  each  quarter  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).

The quarterly government debt is constituted by the liabilities of general government
in  the  following  categories:  currency  and  deposits  (AF.2);  securities  other  than
shares, excluding financial derivatives (AF.33) and loans (AF.4), as defined in ESA
95.

The  nominal  value  of  a  liability  outstanding  at  the  end  of  each  quarter  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 each
quarter.

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  currency  on  the  basis  of  the

13

OJ  L  310,  30.11.1996,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  1267/2003  of  the
European Parliament and of the Council (OJ L 180, 18.7.2003, p. 1.)

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representative  market  exchange  rate  prevailing  on  the  last  working  day  of  each
quarter.

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 quarter.

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

Timetable for the compilation and transmission of data on the quarterly government

debt

1.

2.

Member States shall compile and transmit to the Commission data on  the quarterly
government debt at the latest three months after the end of the quarter to which the
data refer.

Any revision of data for previous quarters shall be transmitted at the same time.

The first transmission of the data on the quarterly government debt shall take place
by 30 June 2004 at the latest.

Article 3

Provisions related to back data

Back-data relating to the first quarter of 2000 onwards should be transmitted by 31 December
2004  at  the  latest.  Where  necessary,  such  data  may  be  provided  using  a  best-estimate
approach.

Article 4

Amendments

1.

2.

If the Council decides to amend Regulation (EC) No 3605/93, in accordance with the
rules  on  competence  and  procedure  laid  down  in  the  Treaty,  the  Council  shall
simultaneously  amend  this  Regulation,  so  that  the  definitions  of  quarterly
government debt and of government debt outstanding at the end of the year are kept
consistent.

If  the  Commission  introduces  new  references  to  ESA  95  into  Article  1(5)  of
Regulation (EC) No 3605/93, in accordance with Article 7 thereof, the Commission
shall simultaneously introduce the same new references into this Regulation, so that
the definitions of quarterly government debt and of government debt outstanding at
the end of the year are kept consistent.

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Article 5

Entry in force

This Regulation shall enter into force on the twentieth day following that of its publication in
the Official Journal of the European Union.

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

Done at Brussels,

For the Council
The President

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