The national accounts in 2014National accounts - Base 2010
General government debt and deficit according to the Maastricht definition in 2014National accounts - Base 2010
The Maastricht treaty puts the general government debt and deficit under watch of the European Union. The debt is a liability assessed at the end of a given accounting period whereas the deficit is a net borrowing need recorded during the same accounting period. These aggregates are assessed in the framework of the National accounts and are notified annually to the european authorities.
In the framework of European union treaty (Maastricht treaty), debt and central government deficit are particularly monitored. The debt corresponds to the outstanding of liabilities valuated at the end of a given period, whereas deficit corresponds to the borrowing need observed on the same period. They are calculated with national accounting results and are quarterly notified (regarding the debt) and annually notified (debt and deficit) to the European Commission.
General government debt according to the Maastricht definition
Debt according to the Maastricht definition covers the whole general government as defined in national accounting. Are taken into account the liabilities of central government, miscellaneous central administration bodies, local governments and social securiy funds.
Debt according to the Maastricht definition is a "gross" debt: the financial assets owned by central government are not subtracted.
It is consolidated: are excluded from the debt value any liability of an administration owned by another administration.
It is valuated at nominal value, i.e. at reimbursement value. This nominal value takes into account the valuation related to a change in exchange rates if the debt is libelled in a foreign currency. On the contrary, fluctuation of securities price and accrued interest not due are not included in the valuation. On the other hand, revaluation of the reimbursement value of inflation-indexed bonds (OATi and CADESi) is taken into account every quarter.
Finally, debt according to the Maastricht definition does not include all the financial liabilities. Are excluded derived financial products, accrued interests not due, as well as short term and long term commercial loans and any accounting differences.
A loan or a security is considered as "long term" if its maturity at the time of issue (and not the time remaining until the reimbursement date) exceeds one year.
Net general government debt and other liquid assets owned by general government
The (gross) debt according to the Maastricht definition, reflects only partly the general government financial situation. To provide a clearer insight into this situation and into the sustainability of public finances, the public notified debt, which represents liabilities, can be set against some financial assets held by general government.
Among these assets, of course figure cash and short term investments, the management of which is intrisically linked to that of the debt. To ensure symmetry with the scope of gross notified debt, are also considered payable assets as loans and negotiable debt securities owned by private economic agents. These financial instruments are valued at their nominal value, like debt according to the Maastricht definition.
Thus, from debt according to the Maastricht definition, a « net public debt » is constructed by subtracting the deposits (cash), credits and negotiable debt securities (at their nominal value) held by central government entities on other economic agents.
For general government sub-sectors, net debt is constructed in the same way, by subtracting from their contribution to gross public debt the same categories of assets (except assets held on other general government sub-sectors).
Otherwise, general government also owns other liquid financial assets, which are not subtracted from the gross notified debt and thus do not enter the "net public debt" perimeter. They correspond to shares of quoted corporations and to shares of collective investment organizations (OPC). The value of these assets is naturally more volatile, because it depends a lot on stock markets evolution.
Public deficit public according to the Maastricht definition
Public deficit according to the Maastricht definition corresponds to the net borrowing need (B9NF) of general government. It is the balance of general government capital account. It measures the difference between all the current expenditure, non-financial investment expenditure and capital transfers on the one hand, and all the non-financial resources on the other hand.
Public deficit is often presented in points of GDP (ratio, expressed as a percentage, between borrowing need and gross domestic product).