Abstract

The European Commission has recently started a project aimed at harmonizing EU public accounting systems through the development of European Public Sector Accounting Standards (EPSAS). The project is a response to the lack of coherence between primary public-sector accounts and government financial statistics, in order to strengthen the economic governance structure in the euro area. This paper aims to show that the divergences (adjustments) between the measures of surplus/deficit in governmental (working balance, WB) and national accounting (net borrowing lending, NBL) vary over time to provide future research opportunities around the factors that, affecting temporal divergences between these measures, enhance fiscal fragility within the EU public sector accounting system. By analysing the Excessive Deficit Procedure (EDP) tables issued by 28 EU countries over the period 2010-2015, the paper uses novel approaches in measuring adjustments based on network analysis and regression models, showing that they are significantly different over time.

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