For the purpose of this chapter, we use the following definitions:
z = PRIV + VE
(6.3)
x = CA + FAa — OFAs
where PRIV indicates revenues from the sale of assets arising in the context of
privatization programs and OFAs indicates other revenue from the sale of financial assets.
The proposed treatment of VE and FAs reflects data availability constraints and carries
some costs. First, based on these definitions, z includes all valuation effects (VE),
irrespective of whether they can or cannot be controlled by the fiscal authorities. This is
likely to introduce considerable noise in z and may impede the detection of any
systematic pattern in “debt-specific” SFA. Second, it is implicitly assumed that sales of
financial assets different from privatization do not reflect debt reduction motives. This
may somewhat blur the distinction between “deficit-specific” and “debt-specific” SFA
components, making it more difficult to detect a systematically selective use of SFA
items.
Table 6.1 reports the average values of total, deficit-specific, and debt-specific SFA,
according to the definitions in (6.3) for the countries which were EU members over 1994-
2004 (excluding Luxembourg). The table shows that the discrepancy between changes in
debt and deficits has been by no means negligible over the period considered (the average
for the EU as a whole amounts to 0.6 percent of GDP). The table also highlights a much
higher value for the deficit-specific SFA component (1.0 percent of GDP), and the
offsetting role of debt-specific SFA (averaging at 0.3 percent of GDP).
Table 6.2 reports similar information, but it is based on the original data releases by
Greece, Italy, and Portugal (i.e. before the revisions which have occurred since 2002).
The overall SFA averages at 0.9 percent of GDP for the EU countries considered. This is
the net result of a deficit-specific component of 1.2 percent of GDP, partly offset by the
debt-specific component (0.3 percent of GDP on average).
Table 6.1 Total SFA and Its Components (% of GDP) after Revisions
|
Deficit-specific ________SFA (x) |
Debt-specific _______SFA (z)________ |
Total ______SFA______ | |
|
Belgium |
-0.3 |
0.3 |
-0.6 |
|
Denmark |
0.8 |
0.7 |
0.1 |
|
Germany |
0.7 |
0.0 |
0.7 |
|
Greece |
3.2 |
0.0 |
3.2 |
|
Spain |
0.3 |
-0.3 |
0.7 |
|
France |
0.5 |
0.0 |
0.5 |
|
Ireland |
2.0 |
0.5 |
1.5 |
|
Italy |
1.1 |
0.9 |
0.2 |
|
The Netherlands |
-0.1 |
0.3 |
-0.5 |
|
Austria |
1.2 |
0.5 |
0.7 |
|
Portugal |
0.9 |
1.3 |
-0.3 |
|
Finland |
1.4 |
-0.9 |
2.3 |
|
Sweden |
1.5 |
1.0 |
0.5 |
|
UnitedKingdom |
0.4 |
0.4 |
0.1 |
|
EUaverage |
1.0 |
0.3 |
0.6 |
Note: average values over 1994-2004, data after revisions occurred since 2002.
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