**Executive Summary:**
This Council Implementing Decision (EU) 2018/818, dated 28 May 2018, imposes a fine of EUR 26.82 million on Austria for misrepresentation of government debt data between 2008 and 2012. The misrepresentation was due to serious negligence by government entities in Land Salzburg. The decision is based on Article 8(1) of Regulation (EU) No 1173/2011 and a European Commission investigation.
**Key Points / Main Content:**
* **Basis for the Decision:**
* Article 126(1) of the Treaty on the Functioning of the European Union (TFEU) requires Member States to avoid excessive government deficits.
* Regulation (EU) No 1173/2011 allows the Council to impose fines for misrepresentation of government deficit and debt data.
* **Commission Investigation:**
* The European Commission launched an investigation on 3 May 2016, regarding manipulation of statistics in Austria.
* The investigation found that the State Court of Audit, the State Office, and the State Government of Land Salzburg were seriously negligent in ensuring proper compilation controls and reporting procedures.
* Statistics Austria was aware of potential misrepresentation since at least 6 December 2012 but only informed the Commission on 10 October 2013.
* **Calculation and Justification of the Fine:**
* The reference amount of the fine was initially set at EUR 59.6 million, based on 5% of the impact of debt misrepresentation (EUR 1,192 million).
* The Commission considered factors such as the limited impact on the overall debt of Austria, the serious negligence involved, cooperation during the investigation, and the complexity of the misreporting.
* Taking these factors into account, the fine was reduced to EUR 26.82 million.
* **Decision:**
* A fine of EUR 26.82 million is imposed on Austria for misrepresentation of government debt data.
**Impact Analysis:**
**Republic of Austria:**
* *Impact:* Austria is required to pay a fine of EUR 26.82 million due to the misrepresentation of government debt data.
* *Action Required:* Austria must make the payment of EUR 26.82 million.
**State Court of Audit, State Office, and State Government of Land Salzburg:**
* *Impact:* The entities were found to be seriously negligent in ensuring appropriate compilation controls and reporting procedures.
* *Action Required:* The identified entities within the general government sector of Austria need to review and improve their compilation controls and reporting procedures to prevent future misrepresentations.
**Statistics Austria (STAT):**
* *Impact:* STAT was found to have been aware of the misreporting and could have acted more promptly.
* *Action Required:* STAT should improve its due diligence processes to ensure timely reporting of any potential misreporting in the future.
Key Entities Referenced
European Union: A political and economic union of member states located primarily in Europe.
Austria: A Member State of the European Union, fined for manipulation of debt data.
Land Salzburg: A state (Land) of Austria, where the manipulation of debt data occurred.
Regulation EU No 1173/2011: A regulation of the European Parliament and of the Council on the effective enforcement of budgetary surveillance in the euro area.
European Commission: An institution of the European Union, responsible for launching the investigation and recommending the fine.
Eurostat: The Statistical Office of the European Union, to which Austria misrepresented debt data.
Treaty on the Functioning of the European Union: One of the primary treaties of the European Union.
Council Implementing Decision EU 2018/818: The decision imposing a fine on Austria for the manipulation of debt data in Land Salzburg
4.6.2018 EN Official Journal of the European Union L 137/23
COUNCIL IMPLEMENTING DECISION (EU) 2018/818
of 28 May 2018
imposing a fine on Austria for the manipulation of debt data in Land Salzburg
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Regulation (EU) No 1173/2011 of the European Parliament and of the Council of 16 November 2011
on the effective enforcement of budgetary surveillance in the euro area (1), and in particular Article 8(1) thereof,
Having regard to the recommendation from the European Commission,
Whereas:
(1) Article 126(1) of the Treaty on the Functioning of the European Union (TFEU) requires Member States to avoid
excessive government deficits.
(2) Data on Government deficits and debt that are relevant to the application of Articles 121 and 126 TFEU and to
the application of Protocol No 12 on the excessive deficit procedure annexed to the Treaty on European Union
and to the TFEU, are essential inputs to economic policy coordination in the Union.
(3) In order to enhance the enforcement of budgetary surveillance in the euro area and to deter against the misrepre
sentation, whether intentional or due to serious negligence, of government deficit and debt data, the Council,
acting upon a recommendation by the Commission, may decide to impose a fine on the Member State
responsible.
(4) On 3 May 2016, the Commission launched an investigation related to the manipulation of statistics in Austria as
referred to in Regulation (EU) No 1173/2011. The preliminary findings of the investigation were sent to Austria
for its observations on 20 December 2016, as required by Commission Delegated Decision 2012/678/EU (2).
Austria provided its written observations on the preliminary findings on 25 January 2017.
(5) On 22 February 2017, the Commission adopted a report on the investigation related to the manipulation of
statistics in Austria as referred to in Regulation (EU) No 1173/2011 of the European Parliament and of the
Council on the effective enforcement of budgetary surveillance in the euro area, taking into account the
observations provided by Austria.
(6) In its report, the Commission concluded that the State Court of Audit (Landesrechnungshof - LRH) and State Office
of Land Salzburg (Amt der Salzburger Landesregierung) and State Government of Land Salzburg (Salzburger Landesre
gierung), which are entities within the general government sector of Austria, were seriously negligent in not
ensuring appropriate compilation controls and reporting procedures. Because of this, those entities facilitated the
fact that the Budget Unit of the State Office of Land Salzburg could misrepresent and conceal financial
transactions. This in turn resulted in Austria's debt data for the years 2008-2012 being misrepresented to
Eurostat in 2012 and 2013, i.e. after the entry into force of Regulation (EU) No 1173/2011. Moreover, the
Commission concluded that Statistics Austria (Statistik Austria - STAT) was aware of the possibility that Land
Salzburg misrepresented its accounts since at least 6 December 2012, but that it only informed the Commission
(Eurostat) of this fact on 10 October 2013.
(7) The amount of the fine shall not exceed 0,2 % of the gross domestic product of Austria in 2015.
(8) The reference amount of the fine to be imposed shall be equal to 5 % of the larger impact of misrepresentation
of the general government debt of Austria for the relevant years covered by the notification in the context of the
excessive deficit procedure (EDP). The revision to the debt reported by Austria for the April 2014 EDP
notification amounted to EUR 1 192 million. The reference amount for the fine should thus be set
at EUR 59,6 million.
(9) Taking into account the criteria set out in point (d) of Article 14(3) of Delegated Decision 2012/678/EU, the
Commission concluded in its report that the relevant actions of the Member State on which a fine may be based
are those which took place in the period from 13 December 2011, when Regulation (EU) No 1173/2011 entered
(1) OJ L 306, 23.11.2011, p. 1.
(2) Commission Delegated Decision 2012/678/EU of 29 June 2012 on investigations and fines related to the manipulation of statistics as
referred to in Regulation (EU) No 1173/2011 of the European Parliament and of the Council on the effective enforcement of budgetary
surveillance in the euro area (OJ L 306, 6.11.2012, p. 21).L 137/24 EN Official Journal of the European Union 4.6.2018
into force, until the launch of the investigation. It also concluded that the last notification in which the relevant
misrepresentation occurred was the October 2013 EDP notification that covered the years 2009-2012. The
misrepresentations for years 2011 and 2012, contained in the 2012 and the 2013 EDP notifications, respectively,
are of relevance in the context of that Regulation because they justify increasing the amount of the fine.
(10) Taking into account the criteria set out in point (a) of Article 14(3) of Delegated Decision 2012/678/EU, the
Commission concluded in its report that the misrepresentation of data did not significantly impact the
functioning of the strengthened economic governance of the Union, because of its limited impact on the debt of
Austria as a whole. These elements justify a reduction of the amount of the fine.
(11) Taking into account the criteria set out in point (b) of Article 14(3) of Delegated Decision 2012/678/EU, the
Commission concluded in its report that the misrepresentation was the result of serious negligence. The
Commission did not conclude in its report that the misrepresentation was intentional in an EDP context. No
modulation should be applied to the amount of the fine in this respect.
(12) Taking into account the criteria set out in point (c) of Article 14(3) of Delegated Decision 2012/678/EU, the
Commission concluded in its report that the misrepresentation of data was facilitated by the fact that three
entities of the general government sector of Austria were seriously negligent by not ensuring appropriate
compilation controls and reporting procedures. Nevertheless, the Commission does not consider this to be
a concerted action by those entities. These elements justify a reduction of the amount of the fine.
(13) Taking into account the criteria set out in Article 14(3)(e) of Delegated Decision 2012/678/EU, the Commission
in its report concluded that STAT and all entities concerned have shown a high degree of cooperation in the
course of the investigation. This element would normally justify a reduction of the amount of the fine.
Nevertheless, it has been ascertained that, under the principle of due diligence, STAT could and should have had
a more prompt and pro-active role in informing the Commission (Eurostat) that misreporting had occurred in
the accounts of Land Salzburg. This element would normally justify an increase in the amount of the fine.
However, this conclusion should be qualified by the high complexity of the factual situation which led to the
misreporting, involving losses from financial derivatives and the associated technical difficulties associated to their
understanding and elaboration and which should be taken into account when assessing the degree of diligence
shown by the authorities of the Member State concerned. Considering the combined effect of the elements
justifying a reduction – the high degree of cooperation shown in the course of the investigation as well as the
difficulties ensuing from the high complexity of the facts – against the elements justifying an increase, a reduction
should still be applied to the amount of the fine.
(14) The Commission recommends that the fine to be imposed on Austria should be set at EUR 29,8 million. In view
of these circumstances, the fine should be set at EUR 26,82 million,
HAS ADOPTED THIS DECISION:
Article 1
A fine of EUR 26,82 million is imposed on Austria for the misrepresentation of government debt data due to the
serious negligence of three government entities as set out in the report of the European Commission on the investigation
related to the manipulation of statistics in Austria as referred to in Regulation (EU) No 1173/2011.
Article 2
This Decision is addressed to the Republic of Austria.
Done at Brussels, 28 May 2018.
For the Council
The President
E. KARANIKOLOV