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Public deficit (national accounts)
Definition
The public deficit corresponds to government net borrowing (institutional sector S13 of the national accounts) added to the balance of gains and losses from swap operations (derivative products). Net borrowing is the balance of the capital account: it includes not only routine operating expenditure and redistribution operations, but also capital expenditure, investments (GFCF) and capital transfers and capital taxes.
Note
The Maastricht treaty, which entered into force on 1 November 1993, defined five convergence criteria that Member States must fulfil to move to the single currency, the euro. Two criteria relate to the control of public deficits : the public finance deficit must not exceed 3% of GDP for all General government and public debt must be limited to no more than 60% of GDP.
The public deficit is reported to the European Commission twice per year (end of March and end of September).
