H62 - National Deficit; SurplusReturn

Shifting to the ESA2010 is going to introduce new statistical treatment with interest under swaps and forward rates agreements (FRA) which will be further not part of the Excessive deficit procedure. The objective of the article is discuss financial derivatives notations from statistical and debt management point of view after the ESA2010 implementation. The paper also discusses potential impact on the recorded fiscal deficit and debt management strategy after implementation. The structure of the article is following: the first part reveals needs for the different treatment of financial derivatives in national accounts and Excessive deficit procedure, the second part describes exclusion of the manipulative uses of financial derivatives and the last part analyzes potential changes due to exclusion of interest under swaps and FRA from deficit in EU28. Simplification in the national accounts has to be compensated by needs for another notation to monitor real fiscal position. Modification of the deficit notation will be asymmetric between EU28 countries and creates conflicts among the strategic goals attained by financial derivatives and Excessive deficit procedure.