The full application of the new methodology of Eurostat (ESA 2010-European System of Accounts 2010) which refers to the calculation of public debt can affect the increase of the public debt of Montenegro, because the debt of state enterprises which according to European rules belong to the general sector of the state are also included in that calculation.
This was officially confirmed to "Vijesta" from Eurostat, whose general director she is Marijana Koceva was on an official visit to Montenegro this month.
The prime minister had meetings with Kocev Milojko Spajic, Minister of Finance Novica Vuković, Governor of the Central Bank Irena Radović and director of Monstat Miroslav Pejović.
Montenegro must fulfill the obligations from Chapter 18 - Statistics, which are key to closing numerous other negotiation chapters, including Chapter 17 (Economic and Monetary Union) and Chapter 33 (Financial and Budgetary Provisions).
"However, in order to meet the final criteria for the chapter on Statistics in the EU accession process, Montenegro must achieve compliance with the key ESA 2010 tables. Chapters are usually temporarily closed about two years before accession, and in order for a chapter to be temporarily closed, work on it should be completed at least six months before closing. The full implementation of ESA 2010 may lead to an increase in Montenegro's debt, as compliance with the definitions could require the reclassification of certain state-owned enterprises from the non-financial or financial corporations sector to the general government sector. On the other hand, if the reclassified company owns government securities, there could be a consolidation effect, which would potentially reduce the total debt of the government," explained Eurostat.
As they stated, the government's deficit and debt are primarily influenced by units classified in the general government sector, and according to ESA 2010, losses and liabilities according to the Maastricht criteria for state-owned enterprises classified in the general government sector are included in the government's deficit and debt.
"Deficits and debts of state enterprises in the sectors of non-financial and financial corporations are not included, unless it is certain that the state will repay the debt of such enterprises. In that case, the debt must be included in the debt of the general government," stated Eurostat.
"Vijesti" asked the CBCG what exactly the ESA 2010 methodology refers to, what is its impact on the calculation of the state's public debt and whether it foresees that the debts of state enterprises are included in the public debt and under what conditions.
The CBCG replied that Monstat is in charge of answering the questions, but it was not specified whether this Eurostat methodology foresees that the public debt includes the debts of state enterprises and under what conditions.
Monstat pointed out that the process of implementing the ESA 2010 methodology in state finance statistics is ongoing.
"New version of the ESA 2010 methodology - European system of national and regional accounts (Regulation (EU) No 549/2013 of the European Parliament and of the Council, of 21 May 2013, on the European system of national and regional accounts in the European Union) it began to be applied in 2014 and became binding in the compilation of national accounts. In order to harmonize with EU standards and produce internationally comparable data, the Directorate for Statistics implemented the ESA 2015 methodology in the compilation of the national accounts system in 2010, i.e. calculation of the gross domestic product. So, in 2015, the Statistical Office published the results of the gross domestic product (GDP) calculation for 2014. and the revised series of data for the period 2010-2013. year in accordance with the ESA 2010 methodology", Monstat said, adding that the results of calculated GDP in accordance with the ESA 2010 methodology for the time series 2006 - 2023 are available on their website", they stated from Monstat.
According to the ESA 2010, the new calculation of public debt could include guarantees given by the state for loans to state-owned enterprises that have been assessed as risky, then subsidies given by the state to some state-owned enterprises that provide services of public interest, local utility companies that provide services such as water supply, of waste removal... Enterprises that are systemically important, but operate on the market and without relying on state aid, remain outside the general government sector.
At the meeting between Prime Minister Milojko Spajić and the general director of EUROSTAT, Marijana Koceveja, it was pointed out that Montenegro still has a lot of work to do on the way to fulfilling the obligations from Chapter 18 – statistics, which is necessary in order to close numerous other negotiation chapters.
"We have set a very ambitious plan, but a plan that we can fulfill and close all chapters by the end of 2026. That is why it is necessary that, as of today, the Action Plan for chapter 18 in cooperation with EUROSTAT should be started, in order to have a clear path to closing Chapter 18. We must be efficient, because Chapters 17 and 33 also depend on it, and I am sure that the great team at Monstat, with the expert support of European partners and the Government, can meet all challenges" Prime Minister Spajić said, as reported by the Government, during the meeting.
The Prime Minister pointed out that there is a solution that will strengthen the confidence of the EU member states in the reforms that Montenegro is implementing in the field of statistics. The goal, apostrophized Spajić, is to provide transparent and reliable data on the state of public finances, so that Montenegro reaches EU standards in that field.
In this context, long-term expert support from the European Commission, which will be provided by EUROSTAT, was agreed upon.
"We have a big job ahead of us, but it can be completed in a short period of time, if we have the right organization and full commitment from all parties," said the General Director of Eurostat.
According to the calculation of the Ministry of Finance, which is stated in the budget proposal for 2025, the net public debt of the state will increase in nominal amount from the current 4,2 billion to 5,5 billion euros over the next three years.
We have set a very ambitious plan with which we can fulfill and close all chapters by the end of 2026. That is why it is necessary that, as of today, the Action Plan for chapter 18 should begin to be made in cooperation with Eurostat, in order to have a clear path to closing chapter 18. said Spajić
Monstat takes over the work of the Ministry of Finance
Yesterday, the government determined the amendments to the Law on Official Statistics and the System of Official Statistics.
"In accordance with the internationally prescribed methodology, the proposed regulation achieves the transfer of competence of statistics of state finances from the Ministry of Finance to the Directorate for Statistics, which creates the conditions for closing the final benchmarks of Chapter 18 - Statistics. In the past period, the Ministry of Finance was in charge of state finance statistics, according to the ESA 2010 methodology, as well as reporting on excessive public debt and deficit. The recommendation of the experts from the last mission in February 2020, held as part of the project "Improving the personnel capacities of Monstat", is aimed at the fact that the production of state finance statistics and reporting on excessive public debt and deficit should be set as an integrated and permanent process, which will be under the jurisdiction of the authority responsible for statistics", the Government announced.
It was clarified that with the proposed changes, the Directorate for Statistics would arrive at a consistent, reliable and comparable quantitative description of state finances. Also, the amendments to the Law will redefine the composition of the Statistical System Council, in accordance with the new organization of state administration.
Bonus video:
