Brussels, 19/02/2014 (Agence Europe) - The European Union's statistical office, Eurostat, warns that, if the single resolution fund (SRF) is set up in national compartments, as desired by the member states, then this could have a negative impact on countries' deficit and debt levels (see EUROPE 11021).
“If the member states keep control over their national compartments, then these are not considered as owned by the SRF. In this case both government deficit and debt would be impacted”, states Eurotstat in a memorandum on the impact of the SRF, dated 13 February and compiled using data available up to 14 February (see Twitter @AgencEurope). Eurostat adds: “For instance, in the case that an amount from national compartment ' A' is used by (lent to) another national compartment 'B' this would have to recorded in country B as increasing government debt, and in parallel increasing the deficit with the amount of the interest, and at the same time as a loan asset to country A and a revenue (in the form of interest)”.
Eurostat says “compulsory levies (including bank levies) are recorded as taxes (…) and compulsory SRF levies would need to be recorded as taxes and would follow the treatment of national bank levies (…). It is understood that the member states themselves will collect the levies, and will then be obliged to pass them on in their entirety to the SRF. (…) The treatment is similar to cutoms duties” and will not be seen as income for the country of origin. Eurostat warns that this statistical interpretation may change if member states have the right to scrutinise the level of contributions and the right to change payments to the SRF.
Eurostat also looks at how loans among national compartments would be dealt with, and if a country had to borrow from the money markets to contribute to the SRF. If “the SRF's national compartments are in any way controlled by the member states concerned, lending between national compartments would have to be re-routed through the government accounts, having effect both on deficit and debt,” warns Eurostat. Any loan from a member state to the SRF would affect public debt levels if the money is raised on the money markets. (MB/transl.fl)