The general government financial accounts cover transactions in financial assets and liabilities as well as the stock of financial assets and liabilities. In the first quarter of 2022, the market value of outstanding long-term debt securities in the euro area decreased by around €501 billion due to a decline in value in financial markets. This is mainly the result of the higher interest rates observed. This makes debt securities issued in the past, when interest rates were lower, less attractive to investors, leading to a decline in value. At the end of the first quarter of 2022, long-term debt securities accounted for around 71% of total euro area government liabilities.
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.
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). Since long-term debt securities are traded on financial markets, the value of these instruments constantly changes over time. At the end of the first quarter of 2022, the value of debt securities issued by euro area governments fell (by €501 billion) faster than the net issuance of new long-term debt securities (around €231 billion). Billions of Euro’s). This resulted in a €270 billion decrease in outstanding at the end of the quarter compared to the beginning of the quarter and a loss of holding for creditors.
For more information:
- 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).
- Long-term debt securities are part of the gross public debt as covered by the definition of Maastricht debt stipulated in the excessive deficit procedure. Thus, data on the outstanding amounts of long-term debt securities 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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