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Few differences between preliminary, final EDP reports, says KSH

There are only a few minor differences between preliminary excessive deficit procedure EDP reports submitted to Brussels and the final reports published after their review by the European Union statistics office Eurostat, the Central Statistics Office (KSH) said in a statement on Tuesday, a week after it was ordered by a court to publish the preliminary reports.

KSH said it will publish the past reports retroactively, according to the deadline set in the court ruling it has yet to receive in writing.

Hungary has submitted twelve EDF reports to Eurostat since joining the EU in 2004. A comparison of the preliminary and final versions in the KSH statement shows just five differences between the versions, of which one was the correction of a very minor error. The changes all involved a bigger deficit in the final version than in the preliminary one.

Eurostat added HUF 46 billion to the 2004 deficit in an EDF report submitted in March 2005 after re-calculating accrual-based farm support. The move raised the gap as a percentage of GDP from 4.1% to 4.3%.

The biggest difference between the preliminary and final versions of the report is in one submitted in September 2005. Eurostat raised the 2004 deficit in the preliminary report by HUF 92.7 billion, or 0.45 percentage point of GDP, after accounting an annual bonus paid to public sector workers in 2004, rather than in 2005, when it was paid out, as well as accounting spending on a new cultural centre in Budapest as a state expenditure.

Eurostat added HUF 10.1 billion to the 2005 deficit in a report submitted in April 2006 after accounting an advance payment by Budapest Airport in 2006, rather than in 2005. The change raised the 2005 deficit as a percentage of GDP from 6.0% to 6.1%.

KSH noted on Tuesday that Eurostat had since reversed its method on how to account advance dividend payments

Eurostat added HUF 19.8 billion to the 2006 deficit in a report submitted in April 2007 because, changing its earlier stand, it regarded an advance dividend payment by Budapest Airport as part of the latter's privatization package, and because of changes to the accounting of a write-off of state debt to Iraq.

There were no differences between the preliminary and final EDF reports submitted since October 2008, the KSH statement shows.

KSH did not mention any differences resulting from two accounting disputes that were widely reported on by the press: one involving the accounting of motorway construction in public-private partnerships in 2005 and the other having to do with the accounting of Hungary's lease of Gripen aircraft for the Armed Forces. This would suggest that KSH, the Finance Ministry and the National Bank reached an agreement with Eurostat on the disputes before the respective preliminary reports were submitted.

The Budapest Court of Appeals said last Wednesday that KSH must ensure public access to the preliminary reports sent to Eurostat, saying the information was of public interest. The ruling was in a case initiated by a journalist three years earlier.

KSH must submit an EDP report, prepared jointly with the National Bank of Hungary and the Finance Ministry, to Eurostat twice a year, on April 1 and October 1. KSH may modify the report based on Eurostat's review. Since 2006, KSH has published the modified reports at the same time the final reports are published by Eurostat. (MTI-Econews)