Revenue, expenditure and deficit/surplus are concepts used to analyse fiscal policy. They are defined such that the deficit/surplus, government net borrowing (-)/net lending (+) is equal to the difference between government revenue and expenditure. Total revenue and expenditure are broken down by current and capital revenue and expenditure which are further broken down into a number of other categories. The difference between current revenue and current expenditure is equal to gross savings. Government revenue, expenditure and deficit/surplus are recorded on an accrual basis (as are all transactions in the ESA). The fiscal burden covers the categories direct taxes (D.5), indirect taxes (D.2), social contributions (D.61) and capital taxes (D.91). Primary deficit is defined as government deficit/surplus excluding interest payable. There are two definitions of government deficit/surplus, (i) the ESA deficit/surplus (B.9) in which settlements under swaps and forward rates agreements (FRAs) are not included, because they are treated as financial transactions; (ii) EDP deficit surplus (EDP B.9) in which such settlements are treated as interest thus allowing to affect the deficit/surplus. This EDP B.9 for excessive deficit procedure purposes was defined in Council Regulation No 2558/2001.
EU budget transactions are concepts used to monitor, for each Member, the payments made by the resident sectors of the economy to the EU budget and the EU expenditure in the Member. Thus, the net payers to and the net receivers from the EU budget can be identified, as well as the impact of the EU budget transactions on the general government deficit/surplus.
Government debt equals the general government gross debt as defined in Council Regulation (EC) No 479/2009 as: (i) the consolidated liabilities of the general government sector (S.13); (ii) in the ESA categories: currency and deposits (F.2), securities other than shares, excluding financial derivatives (F.33), and loans (F.4); (iii) measured at ‘nominal value’- further defined in the Regulation as ‘face value’. This means, in particular, that government debt is not affected by changes in market interest rates, and excludes unpaid accrued interest.
Change in debt amounts to the government debt at the end of the year minus the government debt at the end of the previous year. Although government deficit and debt are closely interrelated concepts, the change in debt level in any given year can be larger or smaller than the deficit. The difference between the change in government debt and the deficit is known as the ‘deficit-debt adjustment’ (DDA) or more generally as the ‘stock-flow adjustment’. The DDA measures the part of the change in government debt that is not accounted for by the deficit/surplus. The DDA can be divided into (i) transactions in main financial assets; (ii) valuation effects and other changes in the volume of debt; (iii) other DDA. The borrowing requirement covers all financial transactions in government debt instruments (F.2, F.33 and F.4). It is also called “transactions in government debt’ or ‘Maastricht debt transactions’. The borrowing requirement of the general government sector is shown as consolidated. It means that if central government issues bonds that are all bought by social security funds, there is no impact on the borrowing requirement. However, central government bonds bought by social security funds, meaning the consolidating elements, are included in non-consolidated transactions.
Financial accounts cover transactions and positions in government financial assets and liabilities. Total financial assets and liabilities are broken down by financial instrument (ESA categories).
European System of Central Bank (ESCB), European Commission (Eurostat) and national data.
The ECB collects the annual government finance statistics (GFS) on individual countries directly from the National Central Banks (NCBs). This collection takes place in spring and autumn each year. The main data sources for the NCBs are the ESA Transmission Programme tables, which are compiled in most countries by the National Statistical Institution (NSI) supplemented by NCB or finance ministry data on debt at nominal value. The ECB receives the quarterly non-financial accounts data from the individual countries via Eurostat. Quarterly financial accounts for general government and quarterly Maastricht debt are received directly from the national compilers (NSIs or NCBs).