Statistics related to the Excessive Deficit Procedure (EDP) - Main facts and recent relevant events Luca Ascoli Head of Unit C3 Public Finance

Legal basis EDP Article 104 of the Treaty (describes the overall objective and role of the institutions and Member States in the area of EDP, states that “Member States shall avoid excessive deficits”) Protocol annexed to the Treaty (Defines the convergence criteria including the 3% deficit and 60% debt thresholds) Council Regulation 479/2009 on the application of the Protocol on the excessive deficit procedure (reporting requirements in terms of definitions, rules and coverage) ESA95 (European System of Accounts). ESA95 provides the methodological framework, it is a Council Regulation

Methodological framework for the reporting of data under EDP The ESA95 Manual on Government Deficit and Debt (MDGG) Guidance notes (published on issues not fully covered by the MGDD and where there is a large majority view among MS) Eurostat decisions on specific topics (issues not covered by the MGDD and normally preceded by a CMFB task-force, e.g. accounting consequences of the financial turmoil) Bilateral advice by Eurostat to Member States (advice given on specific ex-ante or ex-post accounting issues on the request by Member States. The Eurostat advice is normally published)

The role of Eurostat Role of Eurostat strengthened in 2005 (CR 2103/2005) –Eurostat is responsible for assessing the quality of the data and for providing the data to be used in the context of the EDP –A permanent dialogue should be established between Eurostat and Member States –Regular dialogue visits and methodological visits to enhance the monitoring of data and to provide continuous assurance of quality –Committee on Monetary, Financial and Balance of Payments Statistics (CMFB) to be consulted on questionnaires’ format complex cases or cases of general interest

The role of Eurostat Assess the data reported by Member States on 1 April and 1 October each year - Data assessed are year n-4 to n-1. Year n data (forecast) is the task of DG ECFIN - Assess whether accounting is in line with National Accounts (ESA95) and EDP methodology Provide the data reported by Member States through publication (press release) within 3 weeks after the reporting deadline Prepare a report on the results of the notification to the EFC Prepare a report to the European Council/Parliament on the quality of the reported data

The role of Eurostat Undertake EDP dialogue visits to all Member States at least every second year Undertake EDP methodological visits in specific cases (only Greece so far) Organise task-forces on EDP related methodological issues Clarify application of accounting rules (update of the MGDD, task-forces, Eurostat decisions, bilateral advice) Organise working parties 2 times per year to discuss EDP reporting and methodological issues with Member States, Candidate countries, EFTA countries

Relevant recent events The financial turmoil Revision of Greek data

Relevant recent events – the financial turmoil Decision by Eurostat in 2008 to create a CMFB task- force on the accounting consequences of government on the financial turmoil CMFB consultation on the outcome of the task-force in March 2009 Publication of a Eurostat decision on the accounting consequences of government interventions in the context of financial turmoil on15 July 2009 Publication of supplementary tables on financial turmoil on 22 October 2009 in order to give a complete picture of both actual and potential impact on government deficit and debt

Recent relevant events - Greece In November 2004 Eurostat published a report on the revision of the Greek deficit and data after a thorough investigation of the revisions by the Greek authorities of previously reported EDP data for the period Revision of Council Regulation 3605/93 detailing EDP reporting (New CR 2103/2005) Since March 2005, Eurostat has expressed reservations on the quality of the Greek data in five out of ten notifications (press releases)

Recent relevant events - Greece On 22 October Eurostat expressed a reservation in its press release on the quality of data reported by Greece On November 2009 Eurostat undertook an EDP methodological visit to Greece A report on the Greek EDP government deficit and debt statistics was published by the Commission on 8 January 2010 The problems with the Greek data relate both to misreporting by parties involved (the National Statistical Service of Greece, the General Accounting Office and the Ministry of Finance) and to the actual institutional setting

Recent relevant events - Greece Furthermore, there is non-respect of the main principles in the Regulation on European Statistics (EC 223/2009) Infringement procedure Action plan Further methodological visits Press release 22 April Revision of CR 479/2009