The European Union's statistics office tightened accounting rules on Monday for the use of securitisation operations by governments as a way to clean up their public accounts.
Several EU countries, such as Italy and Greece, have used revenues generated by public assets as security to raise money for cutting deficits or debt without it weighing on their books, helping them to satisfy EU budget rules.
Eurostat said in a statement it had decided, after a review of its rules dating to 2002, that all securitisation of fiscal claims - tax credits or delays in payments to social security - by governments should be treated as government borrowing. Also, the existence of a deferred purchase price clause, or of similar arrangements, should lead to the classification of a securitisation operation as government borrowing, it said.
The statement listed other circumstances when securitisation operations will be classed as government borrowing, such as when assets involved in a deal can be substituted. "The rule changes are applicable to all operations concluded after January 1, 2007," the Eurostat statement said. Since 1999, Italy has issued asset-backed securities for around 44 billion euros ($59.2 billion), of which about half were based on fiscal claims.
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