Non cyclical changes in the government budget balance had a positive impact on the balance , in particular in 2002 .

Accordingly , the general government budget balance recorded a deficit in each year throughout that period .

The third article examines the differences between the government budget balance and the change in government debt in the euro area .

Greece General government budgetary position ( as a percentage of GDP )

Sweden General government budgetary position ( as a percentage of GDP )

Overall fiscal balance 1999 1.6 2000 1.3

Primary fiscal balance 1999 5.8 2000 5.8

Note Budget balance figures exclude proceeds from the sale of UMTS licences .

Cyclical component of the budget balance shows the effect on the budget balance of the output gap , as estimated by the European Commission .

Chart A Fiscal developments , 1998 2007 ( as a percentage of GDP ) budget balance cyclically adjusted budget balance 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Sources European Commission ( AMECO database ) and ECB calculations . Note Budget balance figures exclude proceeds from the sale of UMTS licences .

Portfolio investment includes equity securities ( when not a direct investment ) , debt securities in the form of bonds and notes , and money market instruments . Contingent liabilities government obligations that arise only upon the realisation of particular events , e.g. state guarantees .

Non cyclical changes in the government budget balance have , on average , had a broadly neutral impact on the balance .

DEVELOPMENTS IN GENERAL GOVERNMENT DEBT SECURITIES IN THE EURO AREA Against a background of rising general government deficits in the euro area , the level of outstanding general government debt securities has increased in recent years .

Deficit debt adjustments , reflecting among other things financial transactions which leave the deficit unaffected but have an impact on debt , exerted an upward effect of 0.3 percentage point on the euro area average debt ratio in 2000 .

on the contribution of fiscal consolidation efforts as reflected in the primary balance

G L O S S A RY Cyclical component of the budget balance shows the effect on the budget balance of the output gap , as estimated by the European Commission .

The average government debt ratio in the euro area is projected to continue to rise in 2010 , Chart 36 Fiscal developments in the euro area ( 2000 10 as a percentage of GDP ) general government gross debt ( right hand scale ) general government budget balance ( left hand scale ) 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2000 2002 2004 2006 2008 2010 90 80 70 60 50 40 30 20 10 0

Standing facility a central bank facility available to counterparties on their own initiative .

Option a financial instrument that gives the owner the right , but not the obligation , to buy or sell specific assets ( e.g. a bond or a stock ) at a predetermined price ( the strike or exercise price ) at or up to a certain future date ( the exercise or maturity date ) .

They form part of the economic analysis pillar of the monetary policy strategy of the ECB and are thus one of several inputs into the Governing Council 's assessment of the risks to price stability .

General government surplus ( ) or deficit ( ) 1997 1998 1999 2000 including UMTS proceeds 0.3 0.0 1.3 0.3 1.3 4.5 0.3 5.3 2.0 1.1 1.4 6.7 2000 excluding UMTS proceeds 0.8 0.0 1.2 0.4 1.3 4.5 1.5 5.3 1.3 1.5 1.7 6.7

Real time gross settlement ( RTGS ) system a settlement system in which processing and settlement take place on an order by order basis ( without netting ) in real time ( continuously ) ( see also TARGET ) .

Subsequently , non cyclical factors contributed to a deterioration of the budget balance in 1999 , while they helped to improve the balance in 2000 and 2001 .

The evolution of the structure of outstanding general government debt securities in the euro area has three key features .

Initially , this may have been a reflection of the steepening of the yield curve up to spring 2002 , but subsequently also of the renewed increase in uncertainty in global stock markets . In the last quarter of 2002 the annual growth rate of longer term financial liabilities ( excluding capital and reserves ) of MFIs remained broadly stable , suggesting that the fuelling impact of stock market developments had been compensated for by the effects of the fall in long term

Non cyclical factors influences on a government budget balance that are not due to cyclical fluctuations ( see the cyclical component of the budget balance ) .

However , the fiscal position benefits from a strong economy , with the structural balance probably being in a slight deficit position .

of rest of the world , except banks of domestic general government of domestic sectors other resident

( b ) On the basis of primary fiscal balances ( as a percentage of GDP )

2 Despite increasing debt , interest payments remained almost unchanged relative to GDP . Table B Structure of amounts outstanding of debt securities issued by euro area governments ( percentages of total debt securities issued by general government

Government finance statistics government debt and an analysis of the difference between the government deficit and the change in government debt .

This text , the aim of which is to simplify , streamline and strengthen the legal and constitutional basis of Europe , is to be presented for adoption to the Intergovernmental Conference to be held in 2003 .

These budgetary developments were mainly the result of strong output growth and revenue windfalls and , only to a small extent , effective fiscal consolidation .

Greece Potential future debt ratios under alternative assumptions for fiscal balance ratios ( as a percentage of GDP )

Sweden Potential future debt ratios under alternative assumptions for fiscal balance ratios ( as a percentage of GDP )

was close to zero and that in the near future economic conditions would continue to exert a positive influence on the budget balance .

Government accounts ( q )

2.3 Fiscal developments Slowdown in fiscal consolidation Government budgetary positions improved further in 1998 , albeit at a rather slow pace , leaving budgets highly imbalanced on average in the euro area .

Moreover , the demographic trend over the next few decades will have an adverse effect on the current surpluses in the pension system , thereby making improvements in the general government fiscal balance essential .

In the area of economic policy , the Commission produces Integrated Guidelines for Growth and Jobs , containing the Broad Economic Policy Guidelines and the Employment Guidelines , and reports to the EU Council on economic developments and policies . It monitors public finances within the framework of multilateral surveillance and submits reports to the EU Council .

Compared with the previous year , the fiscal deficit ratio decreased by 1.0 percentage point and the general government debt ratio declined by 0.8 percentage point . In 2006 the deficit ratio is 1 Gas import prices depend on long term agreements with a single major gas supplier .

The data also provide details on government debt and an analysis of the difference between government deficits and changes in government debt . The transmission

Intervention at the limits compulsory intervention by central banks if their currencies reach the floor or the ceiling of their ERM II fluctuation margins .

General government debt in euro

General government liabilities ( and assets )