Report from the Commission to the European Parliament and the Council on the quality of fiscal data reported by member states in 2007
Date: 2008-02-08
Institutions: European Commission
Subjects: EU Member State, Eurostat, budget deficit, economic statistics, public debt, public finance, publication of accounts

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.2.2008 
COM(2008) 60 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL  

ON THE QUALITY OF FISCAL DATA REPORTED BY MEMBER STATES IN 2007  

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Table of Contents  

1. 

2. 

Background .................................................................................................................. 3 

Main findings on the 2007 reporting of government deficit and debt levels ............... 3 

2.1. 

Timeliness and completeness ....................................................................................... 3 

2.1.1.  Timeliness .................................................................................................................... 3 

2.1.2.  Completeness of tables and supporting information .................................................... 4 

2.2. 

Compliance with accounting rules and consistency of statistical data......................... 4 

2.2.1.  Exchange of information and clarifications ................................................................. 4 

2.2.2.  Dialogue and methodological visits ............................................................................. 4 

2.2.3.  Specific advice, clarifications and decisions by Eurostat ............................................ 5 

2.2.4.  Recent methodological issues ...................................................................................... 5 

2.2.5.  Consistency with underlying government accounts..................................................... 5 

2.3. 

Publication.................................................................................................................... 6 

2.3.1.  Publication of headline figures and detailed reporting tables ...................................... 6 

2.3.2.  Reservations on the quality of data .............................................................................. 6 

2.3.3.  Amendments to the reported data................................................................................. 6 

2.3.4.  Expiry of transition period for the classification of defined-contribution funded 

pension schemes ........................................................................................................... 7 

2.3.5.  Publication of metadata (inventories) .......................................................................... 8 

3. 

Conclusions .................................................................................................................. 8 

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1. 

BACKGROUND 

Article  8a(3)  of  Council  Regulation  No  3605/931,  as  amended,  requires  the  Commission 
(Eurostat) to report regularly to the European Parliament and to the Council on the quality of 
the actual data reported by Member States. The report must provide an overall assessment of 
the compliance with accounting rules, completeness, reliability, timeliness and consistency of 
the data. This is the second report provided in this context.  

Eurostat regularly assesses the quality of the actual data reported by Member States and of the 
underlying government sector accounts compiled in accordance with Council Regulation (EC) 
No 2223/96 of 25 June 1996 on the European system of national and regional accounts in the 
Community (ESA95)2. The assessment is mainly based on the deficit and debt figures sent by 
Member States to Eurostat twice a year, but also draws on supplementary information such as 
the “Questionnaire related to the notification tables” and bilateral clarifications by Member 
States.  Eurostat  also  makes  several  EDP  dialogue  visits  during  the  year  to  maintain  a 
continuous dialogue with Member States. 

This report is based on the main findings and results of the EDP reporting in 2007, focusing 
on  the  most  up-to-date  information,  i.e.  the  latest  (October  2007)  reporting  exercise,  and, 
where appropriate, making comparisons with the April 2007 reporting. 

2. 

MAIN  FINDINGS  ON  THE  2007  REPORTING  OF  GOVERNMENT  DEFICIT  AND  DEBT 
LEVELS 

2.1. 

Timeliness and completeness 

2.1.1.  Timeliness 

Member  States  are  required  to  report  their  planned  and  actual  deficit  and  debt  levels  to  the 
Commission  twice  a  year,  before  1  April  and  1  October3.  During  2007  the  EDP  reporting 
covered  the  years  2003  to  2007.  The  figures  for  2007  are  those  planned  by  the  national 
authorities, while the 2003 to 2006 figures are final, semi-finalised, provisional or estimated. 
Compliance with the reporting deadlines is usually good, and in the second reporting in 2007 
all  the  Member  States  reported  their  data  on,  or  before,  30  September  except  Luxembourg, 
which reported on 1 October. In the April reporting exercise, all the Member States reported 
their figures before 1 April. 

In general, Member States tend to revise their reporting or to finalise their EDP tables after 
their  first  submission.  In  October  2007,  37  revised  submissions  were  sent  by  20  countries4, 
while in April 2007 Eurostat received 29 revised submissions from 19 countries. Most of the 
revised submissions by Member States are sent in response to comments by Eurostat. 

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OJ  L  332,  31.12.1993,  p.  7;  Regulation,  as  last  amended  by  Council  Regulation  (EC)  No  2103/2005 
(OJ L 337, 22.12.2005, p. 1). 
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 of 16 June 2003 (OJ L 180, 18.7.2003, p. 1). 
Article 4(1) and (2) of Regulation (EC) No 3605/93, as amended. 
Compared with 28 revised submissions by 16 countries in October 2006 and 36 revised submissions by 
16 countries in April 2006. 

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2.1.2.  Completeness of tables and supporting information 

Completion  of  the  reporting  tables  is  a  legal  obligation  and  is  necessary  if  Eurostat  is  to 
monitor  the  quality  of  the  data  properly.  Article  8a(2)  of  Regulation  (EC)  No 3605/93,  as 
amended,  specifies  that  Member  States  must  provide  the  Commission  with  the  relevant 
statistical  information,  which  “in  particular  (…)  means:  data  from  national  accounts, 
inventories, EDP notification tables, additional questionnaires and clarification related to the 
notifications.” 

Most of the Member States completed all the EDP notification tables5. In the October 2007 
EDP  notification,  eight  Member  States  either  did  not  provide  the  link  between  the  working 
balance  and  the  EDP  surplus/deficit  for  all  the  sub-sectors  or  for  all  the  years  or  reported 
working balances equal to the EDP surplus/deficit. 

For EDP Table 3, not all the Member States provided the breakdowns requested for the items 
loans  and  equity.  In  the  October  2007  notification  five  Member  States  did  not  provide  the 
breakdown for loans and two Member States did not split equity.  

All the Member States submitted their replies to the “Questionnaire related to the notification 
tables”6.  Although  coverage  of  answers  improved  between  April  and  October  2007,  a 
majority of countries still do not report all the details requested. 

2.2. 

Compliance with accounting rules and consistency of statistical data 

2.2.1.  Exchange of information and clarifications 

During  the  assessment  period  between  the  reporting  deadline  of  30  September  and  the 
publication  of  data  on  22  October,  Eurostat  contacted  the  national  statistical  authorities  in 
every Member State to request further information and to clarify application of the accounting 
rules  on  specific  transactions.  This  process  involves  several  rounds  of  correspondence 
between  Eurostat  and  the  national  authorities with  tight  deadlines.  A  first  round  of  requests 
for  clarification  was  sent  around  5  October,  a  second  around  10-12  October  and,  in  a  few 
cases, a third, fourth or even fifth round followed. In a number of cases, Eurostat asked for 
revised notification tables7. In April 2007 a similar approach and timetable was followed.  

2.2.2.  Dialogue and methodological visits 

Regulation (EC) No 3605/93, as amended, makes provision for dialogue and methodological 
visits.  Dialogue  visits  to  Member  States  are  conducted  regularly  with  the  aim  of  reviewing 
reported  data,  examining  methodological  issues,  discussing  statistical  sources  and  processes 
described in the inventories and assessing compliance with the relevant accounting rules, for 
example  on  the  delimitation  of  general  government,  the  time  of  recording  and  the 

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A detailed description of the content of these tables can be found on Eurostat’s website on government 
finance statistics: 
http://epp.eurostat.ec.europa.eu/portal/page?_pageid=2373,58110711&_dad=portal&_schema=PORTA
L). 
This  questionnaire  comprises  seven  sections  requesting  quantitative  and  sometimes  qualitative 
information  in  several  areas,  such  as  transactions  in  taxes  and  social  contributions  and  with  the  EU, 
government  guarantees,  debt  cancellations,  capital  injections  made  by  government  into  public 
corporations, etc. 
See section 2.1. 

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classification  of  government  transactions  and  liabilities.  Methodological  visits  are  paid  only 
where  the  Commission  (Eurostat)  identifies  substantial  risks  or  potential  problems  with  the 
quality of the data, especially relating to the method, concepts or classification.  

Up to November 2007 Eurostat made the following EDP dialogue visits: UK (25-26 January, 
including  a  half-day  joint  meeting  with  Ireland  on  26  January),  Spain  (5-6  February), 
Romania (5-6 March), Italy (15-16 March), Germany (12 April), Sweden (7 May), Czech 
Republic  (18-19  June),  Poland  (2-3  July),  Slovakia  (5-7  September),  Austria  (10-
11 September), Estonia (17-18 September) and Finland (29-30 November).  

Recurring themes discussed during the visits included, in particular, the classification of units 
(including infrastructure, TV and radio, hospitals and universities), capital injections, public-
private partnerships, EU flows and the recording of guarantees. 

The findings of these visits are sent to the EFC and made public on Eurostat’s website8. No 
EDP methodological visits were made in 2007. 

2.2.3. 

Specific advice, clarifications and decisions by Eurostat 

Eurostat  is  regularly  consulted  by  Member  States  to  clarify  various  accounting  issues  in 
relation to operations carried out or still in the planning stage (known as ex-post and ex-ante 
advice).  Eurostat  provides  advice  in  accordance  with  the  published  guidelines9.  To  comply 
with  the  transparency  provision  in  Regulation  3605/93,  as  amended,  Eurostat  publishes  the 
letter providing its advice, unless the Member State concerned raises an objection. In 2007, 17 
pieces of advice were published, compared with 15 in 2006. 

2.2.4.  Recent methodological issues 

As  usual,  in  2007  Eurostat  paid  close  attention  to  application  of  the  ESA95  rules  and,  in 
particular, to its latest decision on securitisation operations undertaken by government, which 
was published on 25 June 2007. 

Another  conceptual  issue  of  general  interest  was  raised  by  Eurostat  in  its  October  2007 
news  release,  which  said  that  “Eurostat  intends  in  the  coming  months  to  further  clarify  the 
accounting treatment of flows and debt relating to public infrastructure investments, as well 
as the sector classification of the concerned public units.” Eurostat has set up a Task Force of 
Member State experts to take this work forward during 2008. 

2.2.5.  Consistency with underlying government accounts 

The  notification  deadlines  of  1  April  and  1  October  set by  Regulation  (EC)  No 3605/93,  as 
amended, were introduced in order to ensure consistency with the underlying annual and 
quarterly  government  sector  accounts,  as  reported  to  Eurostat  in  various  ESA95 
transmission tables. Eurostat systematically analyses the consistency of the EDP notifications 
with  the  underlying  government  sector  accounts  transmitted.  For  example,  expenditure  and 

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http://epp.eurostat.ec.europa.eu/portal/page?_pageid=2373 47631312 2373_58674363&_dad=portal&_
schema=PORTAL. 

http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_DS_GFS/PGE_DS_GFS_0/TAB_MET/EU
ROSTAT%20EX-ANTE%20ADVISE-%2019%20JULY%202006%20-%20FINAL%20(2)_1.PDF. 

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revenue  totals  should  be  consistent  with  the  reported  deficit  figures  (allowing  only  for  the 
difference in the recording of interest relating to swaps).  

The  overall  consistency  of  EDP  data  with  the  reported  ESA95  government  accounts  has 
improved in recent years and has now reached a good level. It is still better for non-financial 
than for financial accounts.  

2.3. 

Publication 

2.3.1.  Publication of headline figures and detailed reporting tables 

Article 8g of Regulation (EC) No 3605/93, as amended, states: “The Commission (Eurostat) 
shall provide the actual government deficit and debt data for the application of the Protocol 
on the excessive deficit procedure, within three weeks after the reporting deadlines (…) This 
provision of data shall be effected through publication.” 

The  government  deficit  and  debt  data  were  published  on  23  April  and  22  October  200710 
together  with  all  the  reporting  tables,  as  notified  in  countries’  last  submission  to  Eurostat. 
Eurostat also publishes on its website the annual and quarterly government finance statistics 
that underpin the EDP data, together with information on the stock-flow adjustment11. 

Under  Regulation  (EC)  No 3605/93,  as  amended,  Member  States  should  make  public  their 
actual  data  on  deficit  and  debt.  Only  14  Member  States  have  reported  to  Eurostat  that  they 
publish  all  their  reporting  tables  (Belgium,  the  Czech  Republic,  Denmark,  Estonia,  Ireland, 
Latvia,  Hungary,  the  Netherlands,  Austria,  Romania,  Slovenia,  Finland,  Sweden  and  the 
United Kingdom). This is a small improvement compared with the 13 countries in 2006. 

2.3.2.  Reservations on the quality of data 

In  2007  Eurostat  expressed  no  reservations  on  the  quality  of  the  data  notified  by  Member 
States. 

2.3.3.  Amendments to the reported data  

In April 2007 Eurostat amended the fiscal data reported by three Member States (Belgium12, 
Portugal and the United Kingdom). In October 2007 amendments were made to data reported 
by Belgium and the United Kingdom. Eurostat also decided not to use the GDP data notified 
by Greece in April 2007, pending verification by Eurostat of the substantial upward revision 
by the Greek authorities. In the October 2007 news release Eurostat wrote “Greece notified in 
2006 a substantial upwards revision of GDP (around 26%). This revision has in the last year 
been  subject  to  a  detailed  scrutiny  by  Eurostat  and  national  experts  from  various  Member 
States, following recommendations from the Gross National Income Committee. As a result of 
this work, Greece has now notified a substantially smaller revision  of  GDP  (around 9.6%). 

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Eurostat news releases No 55/2007 and 142/2007.  
The Government Finance section on Eurostat’s website provides public access to information on 
statistics for the excessive deficit procedure and the underlying government sector accounts, including 
data, methodological decisions and manuals, together with findings of EDP dialogue visits: 
(http://epp.eurostat.cec.eu.int/portal/page?_pageid=2373 47631312 2373_58674332&_dad=portal&_sc
hema=PORTAL). 
Belgium challenged Eurostat’s amendment of data before the Court of First Instance in 2006 (Case T-
403/06, Belgium/Commission). The case is still pending. 

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The  new  notified  series  are  being  used  for  the  purpose  of  this  provision  of  deficit  and  debt 
data.” 

Eurostat’s  EDP  news  releases  provided  the  following  explanations  concerning  Belgium, 
Portugal and the United Kingdom13:  

October 2007 EDP reporting 

Belgium  (an  identical  statement  was  also  published  in  April  2007):  "Eurostat  has 
amended the deficit and debt data notified by Belgium for 2005 in relation to the assumption 
by  government  (FIF  -  Fonds  de  l'Infrastructure  Ferroviaire)  in  2005  of  EUR 7  400  million 
(2.5% of GDP) of the debt of the railway company SNCB. According to ESA95 rules, FIF is 
classified inside the government sector and the debt assumption is recorded as increasing the 
deficit. The impact on the government balance in 2005 is of -7073.4 million euro and in 2006 
of  +227.9  million  euro;  the  impact  on  the  government  debt  at  the  end  of  2005  amounts  to 
5246  million  euro  (1.7%  of  GDP)  and  at  the  end  of  2006  to  4982  million  euro  (1.6%  of 
GDP)".  

United Kingdom (an identical statement was also published in April 2007): "Eurostat has 
amended  the  deficit  data  notified  by  the  United  Kingdom  for  years  2003  to  2006  for 
consistency  of  recording  of  UMTS  licences  proceeds.  This  leads  to  an  increase  in  the 
government deficit in 2003 and 2006 (as well as for financial year 2003/2004 and 2006/2007) 
by  GBP  1045  mn  (0.1%  of  GDP)  and  in  2004  and  2005  (financial  years  2004/2005  and 
2005/2006)  by  GBP  1044  mn  (0.1%  of  GDP).  There  is  no  change  in  the  reported  debt 
figures."  

April 2007 EDP reporting 

Portugal:  "Eurostat  has  amended  upwards  the  deficit  data  notified  by  Portugal  in  2005  by 
158  mn  euro  (0.1%  of  GDP)  due  to  the  reclassification  of  capital  injections  as  capital 
transfers  by  government  in  two  hospitals  (Santa  Maria  and  Nordeste).  According  to  ESA95 
rules, capital injections in public enterprises add to the deficit when government does not act 
as a private shareholder and there are doubts on the profitability of the project." 

2.3.4.  Expiry  of  transition  period  for  the  classification  of  defined-contribution  funded 

pension schemes 

The transition period available to Member States for implementing the Eurostat decision on 
the  classification  of  certain  defined-contribution  funded  pension  schemes  expired  in  April 
2007.  For  those  countries  that  availed  themselves  of  the  full  transition  period  (Denmark, 
Hungary,  Poland  and  Sweden),  the  reclassification  had  an  impact  on  the  surplus/deficit  and 
debt data14.  

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Under  Article  8h(2) of  Council  Regulation (EC) No 3605/93,  the  Commission  (Eurostat)  may  amend 
actual  data  reported  by  Member  States  and  provide  the  amended  data  and  a  justification  of  the 
amendment where there is evidence that the actual data reported by Member States do not comply with 
the requirements of Article 8a(1). 
See  news  releases  No  139/2006  and  55/2007  for  details  of  the  impact  on  the  deficit/surplus  and  the 
debt. 

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2.3.5.  Publication of metadata (inventories15) 

Regulation  (EC)  3605/93,  as  amended,  specifies  that  the  EDP  inventories  are  among  the 
statistical information to be provided by Member States to allow the Commission (Eurostat) 
to check compliance with ESA95 rules. Furthermore, it stipulates that national publication of 
these inventories is mandatory. Eurostat published the inventories for all the Member States 
except  Bulgaria  and  Luxembourg  on  its  website  on  28  September  2007.  More  than  half  the 
Member States reported that they have published their EDP inventories nationally or intend to 
do so soon. 

3. 

CONCLUSIONS  

Eurostat  concludes  that  progress  on  the  quality  of  fiscal  data  continued  in  2007.  Member 
States have provided fuller information, both in EDP notification tables and in other relevant 
statistical returns, like the questionnaire relating to the notification tables. Overall consistency 
of  EDP  data  with  the  reported  ESA95  government  accounts  is  now  satisfactory  and  is 
improving, particularly on the financial side, compared with the situation in 2006. 

In this context, Eurostat expressed no reservations on the quality of the reported data in 2007.  

In  spite  of  the  recognised  improvements,  some  problems  still  persist  linked  to  compliance 
with accounting rules and the quality of some of the statistical information provided. As in the 
report  covering  2006,  the  Commission  would  therefore  invite  Member  States  to  continue 
investing  in  the  quality  of  government  finance  statistics  with  a  view  to  meeting  the 
requirements  of  the  Treaty.  This  is  the  only  way  to  achieve  the  desired  level  of  quality  as 
regards  the  compliance  with  the  accounting  rules,  completeness,  reliability,  timeliness  and 
consistency of government data. 

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Inventories of the methods, procedures and sources used to compile actual deficit and debt data and the 
underlying government accounts. 

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