Press Release - 30 January 2019 Government finance statistics - Contingent liabilities and non-performing loans in the EU Member States in 2017
Data on contingent liabilities and non-performing loans of EU governments for the year 2017 have been published today by Eurostat, the statistical office of the European Union.
This publication includes data on government guarantees, liabilities related to public-private partnerships recorded off-balance sheet of government and liabilities of government controlled entities (public corporations) classified outside general government. Contingent liabilities are only potential liabilities.
They may become actual government liabilities if specific conditions prevail. Similarly, non-performing loans (government assets) could imply a loss for government if these loans were not repaid. Thus, this data adds further transparency of public finances in the European Union by providing a more comprehensive picture of potential impacts on Member States' financial positions.
High level of government guarantees in Finland and Austria
The most common form of contingent liabilities are government guarantees on liabilities and occasionally on assets of third parties. The highest rates of government guarantees were recorded in Finland (32.0% of GDP) and Austria (15.8%) followed by Germany (13.3%) and Luxembourg (12.2%). The lowest shares, with less than 1%, were noted in Slovakia (0.02%), the United Kingdom and Czechia (both 0.2%), Bulgaria (0.3%) and Ireland (0.5%). In most EU Member States, the central government is the biggest guarantor, except in Sweden, Denmark and Czechia, where levels of local government guarantees are higher than of central government. In several countries - Belgium, France, Hungary, Ireland, Luxembourg and Spain - a major part of the guarantees is towards financial institutions and were often granted by government in the past in the context of the financial crisis.
Slovakia and Portugal with largest contingent liabilities related to off-balance public-private partnerships
In all EU Member States, liabilities related to off-balance public-private partnerships (PPPs), which are long-term
construction contracts where assets are not recorded in government accounts, were below 3% of GDP. Slovakia
had the highest share (2.9% of GDP), followed by Portugal (2.7%), Hungary (1.5%) and the United Kingdom
(1.4%). For 2017, ten countries reported no liabilities related to off-balance PPPs: the Netherlands, Bulgaria,
Czechia, Germany, France, Luxembourg, Poland, Romania, Slovenia and Sweden. In many EU Member
States, the off-balance PPPs were observed at the central government level, whereas in Austria, Belgium and
Spain, they were notably related to state government. In five countries – Croatia, Estonia, Finland, Latvia and
Italy – the off-balance PPPs were exclusively undertaken by the subsector of local government.
Level of liabilities of public corporations classified outside general government higher in countries with
financial institutions under government control
The level of liabilities of public corporations classified outside general government differs widely in the EU Member
States. There is a group of countries with significant amounts of liabilities such as Greece (119.6% of GDP), the
Netherlands (102.7%), Germany (91.7%), Luxembourg (82.5%) and Cyprus (74.8%). The main reason for the
high level of these liabilities is that the data include government controlled financial institutions, among other public
banks. Most of these liabilities consist of deposits held in these public banks by households or by other kinds of
private or public entities. It should be noted that, in general, financial institutions report high amounts of debt
liabilities, however they also have, at the same time, significant level of assets, which are not captured in this data
collection. At the opposite end of scale, overall small amounts of these liabilities are recorded in Slovakia (5.7% of
GDP), Romania (6.7%), Lithuania (6.8%) and Croatia (9.9%). Most of these countries have negligible liabilities
related to financial institutions, even below 1%, as in Lithuania (0.1%) and Slovakia (0.3%).
page source https://ec.europa.eu/eurostat/
