Since 2018, Approved Housing Bodies (AHBs) have been classified in the General Government sector by Eurostat, the statistical office of the European Union. Consequently, all AHBs revenue and expenditure is classified as general government revenue and general government expenditure while borrowing by the AHBs, from outside the General Government sector i.e. the private sector, will add to the general government debt. As the schemes highlighted by the Deputy finance AHBs for various services, they are consolidated within the general government accounts as flows between general government bodies, but as the AHB’s spend these monies, general government expenditures are recorded.
As the Deputy is aware, the EU’s fiscal rules, as set out in the Stability and Growth Pact (SGP), are an integral part of the EU’s broader economic governance framework. The key components of the fiscal rules are a 3 per cent of GDP threshold for the headline (General Government) deficit, a 60 per cent debt-to-GDP threshold, a balanced budget after adjusting for the economic cycle (measured by the structural balance) and the expenditure benchmark. As the AHBs are classified in the General Government sector, all AHBs revenue and expenditure fall under the scope of the EU fiscal rules framework.
The normal operation of the EU fiscal rules has been suspended since March 2020, when the so-called General Escape Clause (GEC) of the SGP was activated. This clause allows Member States to depart from the regular budgetary requirements under the Pact in order to allow them to take all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery. While the activation of the GEC means the regular fiscal requirements have been temporarily suspended, it must be noted that the Pact itself has not been suspended or revoked but remains in place, providing an important anchor for fiscal policy over the medium-term. As part of the recent announcement by the European Commission of its 2021 Spring Package, the Commission confirmed that the General Escape Clause of the Pact will remain in force in 2022, and is expected to be de-activated in 2023.
