Better data for budgetary surveillance: EU law on statistics as key to unlocking the potential of public sector accounting

Abstract

The quality of the data available for monitoring budgetary discipline of the Member States has been a hot topic within the European Union (EU) institutions and in the literature ever since the beginning of the economic crisis in 2008. The COVID-19 pandemic has shown the inadequacy, not only of the data, but also of the policy instruments available for coordinating efforts and decision-making. In this paper, we attempt to unlock the potential of public sector accounting (PSA) for contributing to the improvement of EU surveillance mechanisms. We look beyond the idea of standardised accounting rules for the entire EU public sector (European Public Sector Accounting Standards) into a less controversial area of EU competence, and we explore the conditions for introducing reporting obligations based on PSA data as part of EU law on statistics.

Points for practitioners

The current succession of crises might create momentum for a change in EU fiscal policy-making. New instruments for the monitoring of the budgetary situation in the Member States could become necessary. The EU institutions cannot impose the European Public Sector Accounting Standards. However, a new standardised reporting instrument could become binding EU law if it would come in the shape of a statistical methodology. Basic principles of EU law guarantee that any new statistical reporting obligations are limited to what is necessary, proportionate and cost-effective.