Are you sure?

Eurostat maintains reservation on Eximbank accounting

Eurostat continues to have reservations on the way Hungary classifies Magyar Eximbank in its national accounts statistics, the European Unionʼs statistics office said in a news release on Monday, as reported by state news wire MTI.   

"Eurostat is maintaining the reservation on the quality of the data reported by Hungary in relation to the sector classification of Eximbank," said the statistics office. "Eurostat considers that Eximbank should be reclassified inside the general government sector which will result in an increase in government debt."

Eurostat added that it is discussing with the Hungarian statistics authorities "the possible rerouting of operations" carried out by the National Bank of Hungary (MNB) and its foundations "deemed to be undertaken on behalf of the government."

Eurostat mentioned the reservation in a release compiling government deficit and debt data based on notifications by member states. Reservations on the quality of data were also noted in the releases for France and Belgium. 

Eurostat said that it is withdrawing its reservation on the quality of data reported in relation to the sector classification of the Hungarian Reorganization and Receivables Management Company (MARK) and statutory protection funds, such as the National Deposit Insurance Fund. The funds have been retrospectively reclassified inside the general government sector, and MARK has been consolidated with its parent, the MNB, it added.

MARK was sold to APS Investment, a Bratislava-based distressed debt servicer, earlier in 2017.

Last year, Minister for National Economy Mihály Varga acknowledged a "professional dispute" with Eurostat over how to account the loans of the state-owned Magyar Eximbank that could impact Hungaryʼs level of state debt, but said "weʼll weigh the possibilities when a decision is taken."

"First of all, itʼs worth concentrating on consultations," Varga added at that time.

Hungaryʼs state debt stood at HUF 26,164 bln, or 73.9% of GDP, at the end of last year, the Eurostat release shows.