22-Feb-19 Expert meeting on revisions policy for EDP/GFS Item 2 - Rationale for GFS/EDP expert meeting on revisions Laura Wahrig – D4 Philippe de Rougemont – D1 3 March 2016

Purpose of the document 22-Feb-19 Purpose of the document Recall the context CMFB and DMES task forces on revision Recall existing ESS guidelines Discuss the main issues to address Basic issue Draft questionnaire (question 1-5) Broad results on these questions 3 March 2016

CMFB and DMES task forces on revision 22-Feb-19 CMFB and DMES task forces on revision CMFB "routine revisions" Updated source data, maximum four years and current quarters DMES "benchmark revisions" See next slide – every 5-7 years Expert group: serve to prepare/consolidate a GFS/EDP input to these Other revisions? Errors? 3 March 2016

Benchmark revisions (1) All ESA tables are aligned in principle 22-Feb-19 Benchmark revisions (1) All ESA tables are aligned in principle although in practice this may not be fully achieved due to various deadlines for reporting ESA tables (2) They cover a large time span since 1995 obviously (+ from before although not necessarily since the first year of publication); (3) All pending classification issues that have been resolved have been implemented; and (4) Major changes in sources data or in compilation methods have been implemented and errors identified have been corrected. Generally all simultaneously 3 March 2016

Existing ESS guidelines 22-Feb-19 Existing ESS guidelines Discussed in NAWG in 2001/ 2003 In CMFB since 2009. Benchmark revisions – every 5-7 years Routine revisions – 4 years and current quarters, due to data sources Errors? New attempts at harmonisation? Incomplete application of legislation? Other revisions? Consistency of time series? 3 March 2016

Fiscal data specificity 22-Feb-19 Fiscal data specificity Key priority sector in NA balancing High visibility Enhanced EDP/GFS scrutiny Request for clarifications GFS reports EDP mission Reservation powers Accounting to precise figures (million) Bottom line: importance of "other revisions" Routine revisions Benchmark revisions Other revisions 3 March 2016

22-Feb-19 Main issues to discuss 3 March 2016

Main issue to discuss – ideal world 22-Feb-19 Main issue to discuss – ideal world 3 March 2016

Main issues to discuss - priorities 22-Feb-19 Main issues to discuss - priorities Priority 1. Identified EDP modifications should be implemented without delay (with flexibility agreed with Eurostat) Priority 2. EDP and GFS should align (with temporary simplification measures agreed with Eurostat) Priority 3. Time series should be consistent (with temporary break in time series agreed with Eurostat) Consequence: Either NA can update quickly Or a difference between GFS/NA can arise 3 March 2016

In case a difference arises 22-Feb-19 In case a difference arises We need a monitoring device 3 March 2016

Main results of the questionnaire Q1-Q5 – 25 answers 22-Feb-19 Main results of the questionnaire Q1-Q5 – 25 answers EDP and GFS should align 3 March 2016

Main results of the questionnaire Q1-Q5 22-Feb-19 Main results of the questionnaire Q1-Q5 GFS time series should be consistent 3 March 2016

Main results of the questionnaire Q1-Q5 22-Feb-19 Main results of the questionnaire Q1-Q5 Can NA and GFS temporarily deviate? 3 March 2016

Main results of the questionnaire Q1-Q5 22-Feb-19 Main results of the questionnaire Q1-Q5 Can NA and GFS temporarily deviate? 3 March 2016

Main results of the questionnaire Q1-Q5 22-Feb-19 Main results of the questionnaire Q1-Q5 Monitoring table? 3 March 2016

Main results of the questionnaire Q1-Q5 22-Feb-19 Main results of the questionnaire Q1-Q5 Consistency with NA or accuracy of EDP/GFS? 3 March 2016

Some reflexions from Q1 answers 22-Feb-19 BE mostly (+SI) disagrees on EDP/GFS to be aligned – it would reduce the technical burden, but required by EU legislation NL: GFS can deviate for large revisions (?)/0.1% EE: deviations arises from requests for clarification IE: deviations for years prior 1995. FR: no answer to Q1/Q2 "we do use a GFS presentation" Point of terminology: GFS = table 2/9/11/25/27/28 UK: Need to give time for new rules MGDD. October only for implementation? ES: harmonization of timetable; importance of taking into account the EDP request for clarification [(+GFS report request for change)]. LT: vintages "Consistency": not merely B9 consistency (+ artificial D7 entry) 3 March 2016

Some reflexions from Q2 answers 22-Feb-19 BE: see Q1 NL: priority for past 4 years for substantial corrections PT: GFS should be consistent with NA [which should be time consistent] FR: (no answer) traditionally backcasting "very time consuming", carried on aggregates (=> problem of info). IT: Difficult to retropolate; "motivated inconsistency can be managed" Perhaps the issue differs between nonfinancial and financial accounts: other changes in volume of assets 3 March 2016

Some reflexions from Q3 answers 22-Feb-19 BE: GFS can deviate from NA "only if EDP and GFS cannot deviate" CZ: costs and risks of maintaining two time series. Have 7 years of notification (?/"t+15 instead t+9")?; reputation risk ES/FR: deviations permit adhering to code of practice on revisions for NA UK: NA is more complex, less reactive IE: updates NA once a year, in June, where GFS will agree MT: vintage deviations GFS t+50 days, NA t+70 days NL: EDP will deviate from GFS/NA for "substantial corrections" AT: ESA table 2 delivery T+3 FI: GFS and NA integrated; but NA can be revised ad-hoc for errors 3 March 2016

Some reflexions from Q4 answers 22-Feb-19 ES: Impact in NA might not be directly measurable IE: lots of work for 3 quarters of deviations; "national accounts produced independently to GFS" FR: More aggregated table (e.g. "reclassification" preferred to "unit B") AT: Cost/benefit FI: Would need to be a lot bigger ("possible effect on GDP") UK: Annual reconciliation on a few concepts only Need for reassurance, checking mechanism 3 March 2016

Some reflexions from Q5 answers 22-Feb-19 BE: Prefer EDP to deviate from GFS, with a bridge table CZ: Macroeconomic statistics should give a unique measure EE: Consistency is ensured unless for urgent EDP changes ES: Stability and growth pact FR: Attached to time consistency of NA. Prefer less accuracy; although mostly an issue of harmonisation "within a set of plausible measurements" IE: NA annual revisions in June PL: Threshold effect (e.g. very small units) FI: large impact on B9/debt, accuracy first SE: One version of B9 3 March 2016