Concepts and definitions

Consolidated financial balance/flows

Financial assets and liabilities can be presented in consolidated form, i.e., after elimination of intra-sectorial transactions within sub-sectors (e.g. debts between municipalities) and between sub-sectors (including municipalities' debts to the state, employment pension corporations and other social security institutions within the general government sector). Consolidated data only show the relative positions of the sectors.

ESA95

ESA95 manual on government deficit and debt, the updated manual on the European system of national and regional accounts.

Financial deficit

Net borrowing, i.e. negative net lending.

General government

The term "general government" in ESA 1995 denotes the public sector and includes central government, (federal) constituent states, local government, and social security funds. The Finnish general government sector includes the State, municipalities and intermunicipal authorities, the regional government of the Åland Islands, and social security funds. Unincorporated market producer enterprises owned by the state or municipalities are not included. The state sector includes the state budget economy and extra-budgetary funds.

Social security funds include all institutional units that administer the statutory social security system, such as the Social Insurance Institution, the Unemployment Insurance Fund, funds that manage unemployment and disability schemes, as well as companies, pension institutions, pension funds and public institutions (e.g. the Local Government Pensions Institution) that manage statutory employment pension insurance schemes. Finnish employment pension institutions are classified into the general government sector according to a decision given by the European Commission in January of 1997.

Not included in employment pension institutions are funds and foundations that manage voluntary pension. Prior to the statistical year 2000 these so-called "A" pension funds and foundations and the "A" parts of "AB" pension funds and foundations could not be separately itemised from data gathered from employment pension institutions.

General government debt

General government debt is public sector consolidated gross debt valued at nominal value, and it is also known as EDP debt data (= Excessive Deficit Procedure).

It comprises promissory note loans, bonds and debentures, short-term securities, other short-term loans and cash received by general government from other sectors of the national economy or from the rest of the world. The EDP debt concept used in reporting according to the European Union's Growth and Stability Pact differs from that of ESA 1995 with regard to valuation and scope. Financial assets and liabilities are valued at market value in ESA95-compliant financial accounts, whereas general government EDP debt is valued at nominal value. Of the financial claims included in ESA95, derivatives, trade credits and advances, and other accounts payable are not included in the loan stock but are taken into account as items that have an impact on changes in the debt.

General government deficit

General government deficit, also known as EDP deficit (Excessive Deficit Procedure), includes the same items as "general government net lending/borrowing" in the national accounts, except for net payments of swap and forward rate agreements, which in the EDP deficit report are treated as interest expenses (which have an impact on deficit) and in the national accounts as changes in derivative debt (with no impact on deficit). Since 2003 these net interest payments have been eliminated from central government's interest items in the Finnish national accounts. Prior to 2003, general government deficit was identical to the deficit shown in the national accounts.

Gross debt

Financial assets have no impact on total gross debt.

Non-consolidated financial balance/flows

Financial assets and liabilities can be presented in non-consolidated form, i.e. all transactions are shown in full, including intra-sectorial and intra-sub-sectorial transactions. Intra-sectorial transactions in sectors consisting of a single institutional unit are nevertheless eliminated (e.g. borrowing within the central government sector). Intra-sectorial transactions do not have any impact on the sector's net worth or net lending.

Referencing instructions:

Official Statistics of Finland (OSF): General government deficit and debt [e-publication].
ISSN=1799-5914. Helsinki: Statistics Finland [referred: 20.4.2014].
Access method: http://tilastokeskus.fi/til/jali/kas_en.html.

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General government deficit and debt


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