Public debt: Maastricht treaty.

The general government debt of a country can be measured through the consolidated gross debt. This general government debt of a country implies, regarding the Treaty of Maastricht, the total gross debt of all governments of a country at the end of the year. It is measured in terms of percent of the Gross Domestic Product of a country. (Belgian Debt Agency, 2016) This indicator has two characteristics: on the one hand it is **gross**: this means that government properties aren’t taken into account. On the other hand, it is **consolidated**: this means that debts owed to a creditor that is also belonging to the general government sector, neither are taken into account (Indicatoren van duurzame ontwikkeling, 2016).

To determine the general government debt, the following categories are incorporated: currency and deposits, securities (other than shares and excluding financial derivatives) and loans (Belgian Debt Agency, 2016).

The general government debt of Belgium included 393 billion euros at the end of January 2016, almost 90% of it is tradeable (Belgian Debt Agency, 2016). *(see figure)*

The general government debt includes the federal debt, the debt of regions and communities, lower governments and social security institutions (FOD Budget en Beheerscontrole, 2016).

Also regarding the Treaty, the ‘Excessive Deficit Procedure’ is put in place. This is EU’s step by step procedure for correcting excessive deficit or debt levels. These corrections start as the deficit exceeds 3% of GDP and/or debt exceeds 60% of GDP. Belgium for example has no ongoing procedure but had one in the past (European Commission, 2015).

### The treaty of Maastricht: comparison of countries

If we are talking about public debt
and the European Union, we should first look at one of the most important norms
concerning public debt, namely the Maastricht norm. This norm states, as we
mentioned earlier, that each country’s deficit should be below 3 percent of the
gross domestic product and the public debt should remain under 60 percent of
the gross domestic product.

We will now compare each country
with this norm. The figures are from 2014. Concerning budget surplus or deficit
Poland is the worst country, with a deficit of -3.3. After Poland comes Belgium
with a deficit of -3.1, followed by Austria, -2.7, then we have Sweden with
-1.7, and the best country is Germany with a surplus of 0.3% of the GDP. Concerning
the public debt Belgium is the worst student with an average public debt of
106.7 percent of the GDP, thereafter comes Austria with 84.2 percent, then
Germany 74.9 percent, then Poland with 50.4 % and the best country here is
Sweden with 44.9%. We also compared the United States with this norm. They had
a deficit of 2.8% and a public debt of 103 %. Conclusion: only Sweden passes.

A couple of years ago, there had
been a renewed interest on this issue because Europe realized it was not only
the countries’ duty to look after their debts. At the end of the year 2011 both
European Council and European Parliament agreed on a couple of
measures/regulations considering fiscal policy and macroeconomic imbalances.
All these measures have to be implemented by each European country before the
mentioned data. With reference to one Council Directive 2011/85/EU (Official
Journal of the European Union, 2011), Eurostat is obligated to collect and
publish these statistics from every European country and Europe as a whole too.
Thus the so-called ‘Macroeconomic Imbalance Procedure’ can be set up if these
data show excessive macroeconomic imbalances. This MIP embraces an early
warning system and a correction mechanism for a country. Nevertheless (even
when there has been a decline) there are still some countries subject to an EDP
(11 out of 28 Member States in 2014, compared to 23 out of 27 Member States in
2011), no sanctions have been imposed so the effectiveness can be questioned
(COM(2014) 905 final).

Regarding the Regulation 479/09 of
the Council, following categories are not taken into account in estimating the
government debt of a country.

·        **Contingent liabilities** (implicit and explicit): these are obligations that depend on unsure future events or obligations which have an unlikely payment or of which the amount of the unlikely payment cannot be determined in a valid way. These mostly contain relevant information about state guarantees (see table), non-performing loans and obligations from the operation of public enterprises, including information about the likelihood and potential due-date of expenditure of conditional obligations. Market sensitivities should be duly taken into account. The **explicit** ones are explained above; such as guarantees (see table). An example of an **implicit** one is support after natural disasters (COM(2015) 314 final).

As we can see, some of the required
statistics are missing for Belgium.

·    **Unconditional explicit obligations:** these debts are already made.

·    **Implicit unconditional obligations:** for example pensions.