The general government financial accounts cover transactions in financial assets and liabilities as well as the stock of financial assets and liabilities. In recent quarters, EU and Eurozone government liabilities have generally increased because governments needed to finance their deficits or acquire assets. Public deficits have increased significantly during the COVID-19 pandemic due to increased spending as well as falling revenues. The emergence of liabilities occurred in particular through the issuance of long-term debt securities (bonds) which are issued with a maturity of more than one year. These financial instruments represent around 3/4 of total liabilities.

Source dataset: gov_10q_ggfa

The stock of liabilities changes either due to transactions (mainly due to net issues, but also due to accrued interest) or due to other economic flows (mainly price changes also known as market gains or losses). detention). As long-term debt securities are traded in capital markets, the value of these instruments changes constantly over time, primarily in response to changes in the interest rate relative to the interest rate at which the existing shares had been issued. At the end of the fourth quarter of 2021, the prices of debt securities issued by euro area governments fell faster than the net issuance of new securities, leading to a decline in the stock at the end of the quarter and a loss holding for the creditor. Over all the quarters of 2021, holding losses were recorded at the euro zone level.

This information comes from quarterly public finance data released today by Eurostat. The article presents a handful of findings from the more detailed Statistics Explained article.

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Methodological notes:

• In the European System of Accounts (ESA 2010), most assets and liabilities are valued at market value. This means that the stock of financial assets and liabilities fluctuates due to transactions, but also due to “other flows”, in particular revaluations (nominal holding gains and losses).
• Debt securities are part of the gross public debt as covered by the definition of Maastricht debt stipulated in the excessive deficit procedure. Thus, debt securities outstanding data are also published at their nominal value, which does not take into account most price variations. Stock at face value can differ significantly from stock at market value.

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