Item 19a: European Sector Accounts ESTP course on National Accounts ESA 2010 Luxembourg, 30 May - 03 June 2016 Eurostat

Content Purpose of the Sector Accounts Overview of compilation of the European Sector Accounts Data dissemination and data sharing with the international organisations Future prospects

1. Purpose of the Sector Accounts To analyse the behaviour of economic agents, in particular how their income is: earned, spent, saved Transactions (non-financial) Covered (in this session): Goods and Services Distributive transactions

1. Purpose of the Sector Accounts The matrix lay-out Example: the sector accounts of BE, 2000 See hand out # 1

1. Purpose of the Sector Accounts Key indicators Households Saving rate: Gross Saving/(GDI + D8net) Investment rate: GFCF/(GDI + D8net) Non-financial corporations Investment rate: GFCF/GVA Profit share: GOS/GVA

Business profit share 7

2. Overview of compilation of the European Sec.Acc from national to European accounts Data transmission to Eurostat: Annual financial and non-financial Sector Accounts – countries are obliged (according to ESA 2010 TP) to submit full set of sector accounts by t+9 months with minimum time-span from 1995 onwards; Quarterly non-financial Sector Accounts – countries are obliged (according to Regulation 1161/2005) to submit set of sector accounts by t+85 (EA countries) and t+3m (EA finalized & non-EA countries), with minimum time-span from 1999Q1 onwards; Confidentiality of data is determined by the use of flags. Data sent by the countries as free for publication are shared with other international organisations (ECB & OECD).  

2. Overview of compilation of the European Sec.Acc from national to European accounts The compilation of European aggregates (ESA 2010, Chapter 19): conversion to euro; estimation of missing (small) countries; incorporation of the European institutions;  

2. Overview of compilation of the European Sec.Acc from national to European accounts EU Institutions ECB resident of the euro area and EU (sector S12) ESM resident of the euro area and EU (sector S12) EIB resident of the EU (sector S12) but not euro area European institutions whose accounts are recorded in the General Budget are resident of the EU but not euro area (sector S13)

2. Overview of compilation of the European Sec.Acc from national to European accounts The compilation of European aggregates (ESA 2010, Chapter 19): conversion to euro; estimation of missing (small) countries; incorporation of the European institutions; consolidation of intra-euro area / EU flows;  

2. Overview of compilation of the European Sec.Acc from national to European accounts The RoW The European RoW should gather flows between European residents and third countries => European RoW ≠ Σ National RoWs « Intra-flows » between European residents are: (1) estimated using the BoP geographical breakdown (2) removed from the summation of national RoWs

2. Overview of compilation of the European Sec.Acc from national to European accounts Before consolidation After consolidation

2. Overview of compilation of the European Sec.Acc from national to European accounts The RoW: example Compensation of employees paid to the RoW D1 / S2 / uses = 26,5 billion € (see hand-out #2) BoP310 / credits / Intra-EU = 14,1 billion € BoP310 / credits / Extra-EU = 11,3 billion € => EU/D1/S2-Intra/uses = 14,7 billion € => EU/D1/S2-Extra/uses = 11,8 billion €

2. Overview of compilation of the European Sec.Acc from national to European accounts Asymmetries Definition: Intra_resources – Intra_uses Example: EU/D1/S2-Intra/uses = 14,7 billion € EU/D1/S2-Intra/resources = 18,1 billion € Asymmetries for D1 = 3,5 billion € European sector accounts do not balance Asymmetries must be allocated to sectors to re- balance the accounts => European accounts ≠ Σ national accounts (even for domestic sectors)

2. Overview of compilation of the European Sec.Acc from national to European accounts The compilation of European aggregates (ESA 2010, Chapter 19): conversion to euro; estimation of missing (small) countries; incorporation of the European institutions; consolidation of intra- euro area / EU flows; re-balancing of the accounts; and seasonal adjustment of key series.  

2. Overview of compilation of the European Sec.Acc from national to European accounts Example: European accounts unbalanced See hand-out #2 European sector accounts balanced See hand-out #3 Based on the two hand-outs provided, calculate: the European (EU) GDP and GNI before balancing the European (EU) GDP and GNI after balancing

3. Data dissemination and data sharing with the international organisations; Annual financial and non-financial Sector Accounts EA/EU key indicators released by around t+10 months. Key indicators includes: Households: saving rate, investment rate and debt-to-income ratio, net financial asset ratio; Businesses: profit share, investment rate, debt-to-income ratio, return on capital employed, return on equity; Quarterly non-financial Sector Accounts EA/EU data: releases at around t+102 days (preliminary), including news releases (hand-out # 4 & 5) (seasonally adjusted), on: Households: saving rate and investment rate; Businesses: profit share and investment rate. release at around t+120 days (final), including (hand-out # 6) (seasonally adjusted): Households: real income and real consumption per capita; ECB publishes Quarterly Financial Sector Accounts for EA at around t+120 days

In cooperation with the Member States: 4. Future prospects In cooperation with the Member States: Improve the timeliness. In cooperation with the Member States and OECD, give more attention to the household perspective, and in particular on the distributional aspects (t+120 press release/ Stiglitz-Fitoussi-Sen report).

Thanks for your attention!! For more information, please visit our dedicated Eurostat's website on the Sector Accounts at: http://ec.europa.eu/eurostat/web/sector-accounts