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Mai 2012
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MF_Couv_CpteGeneral2011.indd 1 06/06/2012 15:43:31
R É P U B L I Q U E F R A N Ç A I S E
Direction générale des finances publiques
www.performance-publique.budget.gouv.fr
Mai 2012
MF_Couv_CpteGeneral2011.indd 1 06/06/2012 15:43:31
MODERNIZATION OF THE PUBLIC ACCOUNTING SYSTEMS IN FRANCE
Ministère des Finances et des Comptes Publics
Overview of the approach using the 2014 accounts
SUMMARY FINANCIAL STATEMENTS1
1 Unless otherwise indicated, figures in the Central Government accounts are presented in millions of euros (€ million)
1
BALANCE SHEET The Central Government balance sheet is presented in the form of a Statement of Net Assets/Equity.
31/12/2013 31/12/2012
FIXED ASSETS
Intangible assets 6 43,406 16,753 26,653 27,456 28,387
Tangible assets 7 537,250 62,749 474,501 474,111 468,531
Financial assets 8 358,084 25,075 333,008 326,623 304,285
Total fixed assets 938,740 104,577 834,163 828,191 801,203
CURRENT ASSETS (excluding cash)
Inventories 9 40,557 6,529 34,028 31,462 31,014
Receivables 10 116,205 28,733 87,472 78,357 76,346
Taxpayers 92,351 27,843 64,508 57,941 55,758
Customers 4,929 790 4,139 5,531 5,296
Other receivables 18,926 101 18,825 14,885 15,292
Prepaid expenses 10 26 0 26 122 172
Total current assets (excluding cash) 156,788 35,262 121,526 109,941 107,532
CASH 15
Balances with banks and cash on hand (7) (7) 2,513 1,956
Deposits in transit (2,007) (2,007) (1,799) (1,545)
Other cash items 16,471 16,471 15,857 24,995
Cash equivalents 8,264 0 8,264 5,232 5,147
Total cash 22,721 0 22,721 21,804 30,553
DEFERRED EXPENSES 11-16 10,740 10,740 11,797 11,005
TOTAL ASSETS (I) 1,128,990 139,839 989,150 971,733 950,293
FINANCIAL DEBT 11
Negotiable securities 1,546,160 1,476,203 1,406,019
Non-negotiable securities 0 0 235
Financial debt and other borrowings 4,804 4,476 6,001
Total financial debt 1,550,964 1,480,680 1,412,256
NON FINANCIAL DEBT (excluding cash) 12
Operating debt 8,724 6,671 6,691
Intervention debt 8,404 8,295 7,621
Prepaid revenues 12,981 14,003 13,853
Other non-financial debt 106,681 102,420 99,495
Total non-financial debt 136,790 131,388 127,660
PROVISIONS FOR RISKS AND LIABILITIES 13
Provisions for risks 19,412 20,066 16,403
Provisions for liabilities 115,094 105,508 111,362
Total provisions for risks and liabilities 134,506 125,574 127,765
OTHER LIABILITIES (excluding cash) 14 34,038 27,405 28,016
CASH 15
Treasury correspondents and authorised persons 94,045 95,368 99,536
Other 50 0 46
Total cash 94,096 95,368 99,583
DEFERRED INCOME 11/16 56,811 49,601 46,083
TOTAL LIABILITIES (excluding net assets/equity) (II) 2,007,206 1,910,018 1,841,362
Accumulated surplus/deficit brought forward (1,314,262) (1,254,278) (1,161,432)
Revaluation and integration differences 373,466 376,208 364,552
Operating surplus/deficit for the period (77,260) (60,215) (94,190)
NET ASSETS/EQUITY (III = I - II) 17 (1,018,055) (938,285) (891,070)
Net restated
Note
31/12/2014
Gross NetNet
restated
Depreciation, amortisation, Impairment
2012 and 2013 figures have been restated as part of the “comparative reporting” phase of the Central Government Accounting Standards (see details in Note 2).
2
INCOME STATEMENT The Central Government Income Statement is presented in three parts: a net expenses statement, a net sovereign revenues statement and a net operating surplus/deficit statement for the period.
NET EXPENSES STATEMENT
Note 20142013
restated 2012
restated
Staff costs 18 136,916 135,467 135,068
Purchases, changes in inventories and external services 19 20,795 20,844 20,602
Charges to depreciation, amortisation, provisions and impairment losses 22 47,439 49,473 44,620
Other operating expenses 19 10,331 8,587 8,172
Total direct operating expenses (I) 215,481 214,371 208,463
Subsidies for public service expenses 20 27,719 27,710 26,696
Allocations to provisions 22 0 0 0
Total indirect operating expenses (II) 27,719 27,710 26,696
Total operating expenses (III = I + II) 243,200 242,081 235,159
Sales of goods and services 21 3,293 3,199 2,771
Increase in inventories of finished goods and work in progress and capitalised production 160 113 95
Reversals of provisions and impairment losses 22 37,519 35,371 32,829
Other operating revenues 21 27,078 27,024 26,705
Total operating revenues (IV) 68,050 65,707 62,401
175,150 176,374 172,758
Transfers to households 23 35,419 36,521 35,321
Transfers to businesses 23 10,117 11,699 11,811
Transfers to local authorities 23 72,935 75,235 75,444
Transfers to other entities 23 24,951 24,111 23,546
Expenses arising from government guarantees 23 11 8 5
Charges to provisions and impairment losses 25 35,820 30,461 31,763
Total intervention expenses (VI) 179,252 178,035 177,890
Contributions from third parties 24 2,025 1,985 1,798
Reversals of provisions and impairment losses 25 29,165 36,623 30,044
Total intervention revenues (VII) 31,189 38,607 31,841
148,063 139,428 146,048
Interest 26 41,990 42,327 43,562
Exchange rate losses on financial transactions 245 113 71
Charges to depreciation, amortisation, provisions and impairment losses 28 3,788 3,399 9,156
Other financial expenses 26 4,923 15,958 6,363
Total financial expenses (IX) 50,946 61,797 59,153
Revenue from financial assets 27 8,365 15,896 6,474
Exchange rate gains on financial transactions 27 254 82 58
Reversals of provisions and impairment losses 28 7,645 18,053 5,845
Other interest and similar revenues 27 3,160 3,219 2,734
Total financial income (X) 19,424 37,250 15,111
31,521 24,547 44,042
354,735 340,350 362,848
Net
fina
ncia
l exp
ense
s
TOTAL NET FINANCIAL EXPENSES (XI = IX - X)
TOTAL NET EXPENSES (XII = V + VIII + XI)
Net
ope
ratin
g ex
pens
es
TOTAL NET OPERATING EXPENSES (V = III - IV)
Net
inte
rven
tion
expe
nses
TOTAL NET INTERVENTION EXPENSES (VIII = VI - VII)
3
NET SOVEREIGN REVENUES STATEMENT
Note 31/12/201431/12/2013 restated
31/12/2012 restated
Income tax 69,956 65,844 60,274
Corporate income tax 33,640 42,010 37,715
Domestic duty on consumption of energy products (TICPE) 12,552 12,932 12,619
Value added tax 139,335 138,131 136,525
Registration fees, stamp duty, other contributions and indirect taxes 16,950 15,654 13,547
Other taxes and similar revenue 17,706 20,975 21,404
290,139 295,545 282,084
7,680 6,464 6,371
7,680 6,464 6,371
Own resources of the European Union based upon Gross National Income (15,977) (17,833) (15,920)
Own resources of the European Union based on Value Added Tax (4,368) (4,041) (3,877)
(20,344) (21,874) (19,797)
277,475 280,135 268,658
TOTAL NET TAX REVENUES (XIII)
Fines and other penalties
TOTAL OTHER SOVEREIGN REVENUES (XIV)
TOTAL OWN RESOURCES OF THE EUROPEAN UNION BASED ON GROSS NATIONAL INCOME AND VALUE ADDED TAX (XV)
TOTAL NET SOVEREIGN REVENUES (XVI = XIII + XIV- XV)
NET OPERATING SURPLUS/DEFICIT STATEMENT FOR THE PERIOD
31/12/201431/12/2013 restated
31/12/2012 restated
Net operating expenses (V) 175,150 176,374 172,758
Net intervention expenses (VII) 148,063 139,428 146,048
Net financial expenses (XI) 31,521 24,547 44,042
354,735 340,350 362,848
290,139 295,545 282,084
Other net sovereign revenues (XIV) 7,680 6,464 6,371
(20,344) (21,874) (19,797)
277,475 280,135 268,658
(77,260) (60,215) (94,190)OPERATING SURPLUS/DEFICIT FOR THE PERIOD (XVI-XII)
NET EXPENSES XII)
Net tax revenues (XII)
Total own resources of the European Union based on Gross National Income and Value Added Tax(XV)
NET SOVEREIGN REVENUES (XVI)
4
CASH FLOW STATEMENT
20142013
restated2012
restated
RECEIPTS 499,871 492,454 470,295Receipts from sales of goods and services 1,375 1,388 1,143Other operating receipts 4,879 5,579 8,065Receipts from taxes 357,944 358,475 346,903Other sovereign receipts 5,504 5,496 5,577Intervention receipts 2,690 3,237 3,115Receipts from interest and dividends 8,869 8,484 8,056Other receipts 118,610 109,793 97,436
PAYMENTS 562,019 548,154 534,685Staff costs 134,840 133,811 132,910Purchases and external services 19,683 20,551 19,801Tax refunds 72,738 63,132 68,768Other operating expenditure 3,677 3,283 3,292Subsidies for public service expenses 26,221 26,254 25,289Intervention expenditure 144,864 147,937 144,736Payments arising from government guarantees 120 115 122Interest paid 43,826 44,425 44,933Other payments 116,051 108,646 94,835
(62,149) (55,700) (64,390)
ACQUISITIONS OF FIXED ASSETS 26,910 30,293 32,317Tangible and intangible assets 9,344 9,567 10,433Financial assets 17,567 20,726 21,884
DISPOSALS OF FIXED ASSETS 11,818 12,405 10,062Tangible and intangible assets 545 440 564Financial assets 11,273 11,965 9,498
(15,093) (17,888) (22,255)
LOAN ISSUES 212,553 205,838 200,342Stripped government bonds (OAT) 196,822 187,510 129,259BTAN treasury bills 14,288 11,086 82,280Residual BTF fixed-rate treasury bills 1,442 7,243 (11,196)
LOAN REPAYMENTS (excluding BTF) 134,903 136,725 123,698Negotiable debt 134,703 130,613 122,426Stripped government bonds (OAT) 59,938 66,003 63,320BTAN treasury bills 74,765 64,610 59,106Non-negotiable debt 200 6,112 1,272
FORWARD FINANCIAL INSTRUMENT FLOWS 83 (203) (168)
77,733 68,911 76,477Net cash flows not analysed (IV) 1,698 143 (1,005)CHANGE IN CASH POSITION ( V = I + II + III + IV = VII - VI) 2,190 (4,534) (11,173)CASH POSITION AT BEGINNING OF PERIOD (VI) (73,564) (69,030) (57,857)CASH POSITION AT END OF PERIOD (VII) (71,374) (73,564) (69,030)
NET CASH USED IN OPERATING ACTIVITIES (I)
NET CASH USED IN INVESTING ACTIVITIES (II)
NET CASH FROM FINANCING ACTIVITIES (III)
CA
SH F
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S FR
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CTI
VITI
ESC
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FLO
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FRO
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VITI
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5
SUMMARY STATEMENT OF MAIN OFF-BALANCE SHEET COMMITMENTS AND OTHER INFORMATION
Commitments given (in € billion*) Note 2014 2013 2012
Commitments given under the terms of clearly defined agreements 32
Debt guaranteed by the Central Government 194 203 163
Guarantees relating to general interest missions
Insurance schemes
Commitments in respect of Coface credit insurance 85 81 82
Coface exporter risk guarantees 2 2 2
Commitments in respect of the interest rate stabilization procedure (Natixis) 10 10 9
Guarantee granted to CFDI 1 1 0
Savings protection schemes
Regulated savings plans 412 416 394
Liability guarantees
Commitments given to multilateral development banks (callable capital) 55 53 51
Commitment relating to France's share in ESM callable capital 126 126 126
Central Government financial commitments
Co-financing agreements 17 17 18
including: AFITF multi-year contracts 7 8 8
ESA (ASE) 5 2 3
State-Region project contract (CPER) 3 3 2
Development assistance
Loans to foreign States - Emerging country reserve 2 2 2
Nominal value of forward financial instruments 8 10 13
Other financial commitments
Budgetary commitments relating to transactions where the service has not been performed 88 93 92
Undrawn loan commitments given by the Central Government to the IMF 51 50 50
Commitments relating to the retrocession of interest on Greek bonds 2 2 1
Commitments arising from the Central Government's role as economic and social regulator 33 492 371 459
Pension plan subsidies and subsidies to balance special pension schemes 274 203 296
including: SNCF 137 102 166
RATP 54 36 49
ENIM 53 38 50
CANSSM 26 25 28
SEITA 3 3 3
Housing benefits (APL and ALS) - Central Government contribution to financing the national housing subsidy fund (FNAL) 164 109 108
Adult disability allowance (AAH) 18 21 23
Specific solidarity allowance (ASS) and Equivalent pension allowance (AER) 6 4 3
Resource guarantee for workers with disabilities (GRTH) 3 3 4
Employment insertion through assisted contracts (Emplois d'avenir , CUI, CIE, CAE) 2 2 1
Supplementary invalidity allowance (ASI) 2 3 3
Construction assistance 2 2 3
Réseau ferré de France (RFF) 2 2 2
Education grants 2 2 2
including: Social criteria-based grants 1 1 1
Active solidarity income (RSA) 2 4 3
Enterprise competiveness funds (FCE) 1 1 1
Improved access to qualifications 1 1 1
Assistance measures for education and social inclusion 1 1 1
Equipment grant for rural territories (DETR) 1 1 1
Commitments stemming from the invoking of the Central Government’s liability - Obligations recognised by Central Government 34
Central Government pension commitments 35
Central Government civil servants and armed forces personnel 1,561 1,302 1,498
La Poste civil servants 128 110 129
FSPOEIE 39 35 39
Financial neutralisation of decentralisation part II impacts 16 13 13
Other special regimes (including Alsace-Lorraine) 8 8 8
Other information 36
Commitments given under public-private partnerships (PPP) 10 10 14
CSPE 5 5 5
Tax measures
Tax losses carried forward - Corporate income tax 63 55 51
Tax losses carried forward - Income tax 2 2 2
Capital gains rolled over 13 12 11
Tax credit for encouraging competitiveness and jobs (CICE) 3 - -
* Only amounts in excess of €1 billion are presented in this table.
6
Commitments received (in € billion*) Note 2014 2013 2012
Commitments given under the terms of clearly defined agreements 32
General interest missions - Insurance mechanisms
Commitments in respect of hedging contracts (Natixis) 9 8 6
Financial commitments - Forward financial instruments
Credit lines that can be accessed by AFT 8 8 11
Forward currency purchases negotiated by AFT 1 2 1
Other financial commitments
Commitments received from the Banque de France pursuant to the retrocession of interest on Greek bonds 1 2 1
Other information 36
Commitments received under public-private partnerships (PPP) 3 3 3
Central Government guarantees to secure tax receivables 7 5 4
including: Taxation without basis 1 - -
Registration duties and cadastral taxes with a special payment regime 5 4 4
* Only amounts in excess of €1 billion are presented in this table.Pursuant to Central Government Accounting Standard no. 13 on commitments to be disclosed in the notes to the financial statements, the disclosure of commitments can result in the disclosure of an objective and unequivocalamount or alternatively a detailed description of the commitment where a valuation is not possible.In order to facilitate identification in the corresponding notes (32 to 36), the amounts relating to Central Government commitments are presented in colour.In application of Central Government Accounting Standards no. 2, 12 and 13, 2012 and 2013 disclosures concerning the debt guarantee (32.1), co-financing contracts (32.4.1) and commitments arising from the Central Government'srole as economic and social regulator (33), have been restated for comparative purposes. Comment: The financial statements are defined by Central Government Accounting Standard no. 1 and consist solely of the balance sheet, the income statement, the cash flow statement and the notes to the financial statements. A summary statement of the main off-balance sheet commitments and other information has been included in this section to provide the reader with the most comprehensive information possible.
7
PART I. PRESENTATION OF THE SUMMARY FINANCIAL STATEMENTS
NOTE 1 – OVERVIEW OF THE PRINCIPAL CHANGES AND MAIN EVENTS OF THE PERIOD
1.1 OVERVIEW OF THE PRINCIPAL CHANGES OF THE PERIOD
1.1.1 Change in the Central Government Balance Sheet
Assets+ M€ 17,417
1,480,680 1,550,964
131,388136,790
125,574134,506
172,375184,945
Other liability accounts
Provisions for risks andliabilities
Non financial debt
Financial debt828,191 834,163
109,941 121,526
33,601 33,462
Other assets
Fixed assets
Current assets (excl.cash)
31/12/201431/12/2013 restated
31/12/201431/12/2013 restated
Liabilities+ M€ 97,188
1.1.1.1 PRINCIPAL CHANGES IN FIXED ASSETS
Fixed asset category
Intangible assets
Tangible assets
Financial assets
Total fixed assets
31/12/2013
27,456
474,111
326,623
828,191
31/12/2014
26,653
474,501
333,008
834,163
+ 6,385
+ 5,972
8
Tangible assets represent the majority of Central Government assets (48%).
Tangible asset categories
Land and buildings
Technical equipment
Military equipment
Otehr tangible assets
Concession assets
Tangible assets in progress
Total tangible assets
31/12/2013
190,241
2,079
40,849
1,995
209,629
29,318
474,111
31/12/2014
190,427
1,866
37,401
1,748
210,129
32,929
474,501
+ 3,611
+ 390
- 3,447
The main movements concern:
- tangible assets in progress (+M€3,611) including:
+M€1,360 for military
equipment in progress: M€723 for submarines, M€473 for surface ships and -M€408 for weapons;
+M€1,246 for land and buildings
in progress, including M€920 for non-specific buildings,
- military equipment (-M€3,447) primarily
following the reclassification of munitions in inventory.
Financial assets represent 34% of Central Government assets.
Financial asset categories
Investments
Investment-related receivables
Loans and advances
Unincorporated entities
Other financial assets
Total financial assets
31/12/2013
256,963
32,852
19,774
15,679
1,355
326,623
31/12/2014
254,166
41,241
20,613
14,609
2,379
333,008+ 6,385
- 2,797
- 1,070
+ 1,024
+ 8,389
The increase in financial assets is due to:
- the increase in investment-related receivables (+M€8,389), including M€7,050 receivable from entities managing “Investments for the future”;
- the decrease in investments (-M€2,797): -
M€1,930 decrease in the equity value of controlled entities:
-M€3,173 for CEA due to the
losses recognized in AREVA with a knock-on effect on CEA equity;
-M€1,207 for AREVA due to the
downturn in results: the equity value is –M€194 in 2014 (compared with M€1,013 in 2013);
+M€831 for EDF;
+ M€683 for BPI Group;
+ M€462 for La Poste;
+M€392 for Société du Grand
Paris.
- the decrease in unincorporated entities (-M€1,070): -M€806 for the “Investments for the future” CDC guarantee fund and –M€668 for the Central Government in COFACE;
- the increase in other financial assets
(+M€1,025), including M€931 for C2D capitalised receivables due primarily to the recognition of C2D receivables on the Republic of Côte d’Ivoire.
Intangible assets represent 3% of assets. The decrease (-M€804) is due to the reduction in development costs (-M€778). The increase in fixed assets is presented in greater detail in Note 6 – Intangible assets, Note 7 – Tangible assets and Note 8 – Financial assets.
9
1.1.1.2 PRINCIPAL CHANGES IN CURRENT AND OTHER ASSETS
Current and other assets
Inventories
Receivables
Prepaid expenses
Sub-total current assets
Cash
Deferred expenses
Sub-total other assets
Total current and other assets
31/12/2013
31,462
78,357
122
109,941
21,804
11,797
33,601
143,542
31/12/2014
34,028
87,472
26
121,526
22,721
10,740
33,462
154,988
+ 11,585
- 1,056
+ 2,566
+ 11,446
+ 9,115
The increase in receivables (+M€9,115) concerns:
- taxpayer receivables in the amount of M€6,567:
M€5,015 in respect of net
receivables collected on behalf of the Central Government: M€3,594 for net income tax receivables and M€957 for VAT receivables;
M€952 in respect of net
receivables collected on behalf of third parties (primarily land tax, business license tax, CFE and IFER) ;
- other receivables in the amount of
M€3,939, including M€3,937 for receivables on sundry debtors due in particular to operations under the new “Investments for the future” programme launched in 2014;
- customer receivables for –M€1,392
primarily in respect of receivables relating to AFITF’s participation in construction, adaptation and equipment of the national road network.
The increase in inventories (+M€2,566) is primarily due to the reclassification of munitions initially recognised in tangible assets (see above). The M€1,056 decrease in deferred expenses is mainly due to the reduction in the amount of discounts on OAT and BTAN bond issues (-M€884) as a result of falling interest rate trends favouring the recognition of issue premiums. The increase in current and other asset accounts is presented in greater detail in Note 9 - Inventories, Note 10 - Receivables and prepaid expenses, Note 15 - Cash and Note 16 - Deferred income and expenses.
10
1.1.1.3 PRINCIPAL CHANGES IN FINANCIAL DEBT Central Government financial debt (M€1,550,964) increased M€70,284, primarily due to the increase in medium and long-term negotiable debt (+M€68,449). This account is the main component of total indebtedness (88%).
Financial debt categories
Long- and medium-term negotiable securities
Short-term negotiable securities
Other borrowings
Total financial debt
31/12/2013
1,302,437
173,766
4,476
1,480,680
31/12/2014
1,370,886
175,274
4,804
1,550,964
+ 68,449
+ 1,508
+ 70,284
This increase in financial debt is due to the financing requirements of activities and investment measures and is presented in Note 11 – Financial debt. 1.1.1.4 PRINCIPAL CHANGES IN LIABILITIES (EXCLUDING FINANCIAL DEBT)
Liability categories
(excluding financial debt)
Non-financial debt
Prepaid revenue
Provisions for risks and liabilities
Other liabilities
Cash
Deferred income
Sub-total Other liabilities
Total liabilities (excluding financial debt)
31/12/2013
117,385
14,003
125,574
27,405
95,368
49,601
172,375
429,338
31/12/2014
123,809
12,981
134,506
34,038
94,096
56,811
184,945
456,241
+ 6,424
+ 6,633
- 1,273
+ 7,210
+ 12,570
+ 26 904
+ 8,932
- 1,022
The increase in non-financial debt (+M€6,424) comprises:
- the increase in other non-financial debt (+M€4,261):
+M€3,546 in accrued expenses
on corporate income tax repayments: +M€3,703 attributable to the recognition for the first time of accrued expenses in respect of the CICE;
-M€3,424 in investment-related
debt (primarily the impact of the
final Central Government payment to ESM),
+M€1,173 in accrued expenses
on VAT repayments,
- the increase in operating debts (+M€2,053) including M€1,833 for trade payables.
The increase in provisions for risks and liabilities (+M€8,932) is due to the following main changes:
- +M€6,917 in provisions for transfers: +M€4,790 for the community cooperation
11
scheme relating to the European Development Fund and +M€759 for the provision for payments to ANGDM;
- +M€2,226 in provisions for restoration:
+M€1,598 in provisions for dismantling and +M€630 in provisions for depollution and asbestos removal;
- -M€1,883 in provisions for other risks:
-M€1,803 in the provision for the economy and the sustainable development of agriculture;
- +M€1,409 in provisions for litigation and
disputes: +M€1,606 in provision for tax-related litigation and disputes.
The decrease in prepaid revenues (-M€1,022) is attributable to revenue recognised on the co-funding of roads in the amount of -M€594. The increase in other liability accounts (+M€12,570) comprises:
- a rise of M€7,210 in deferred income, including:
+M€3,295 in issue premiums on
OAT and BTAN bonds due to an
interest rate effect (downward trend) combined with a financial debt volume effect;
+M€3,265 in non-consumable
allocations for “Investments for the future”,
- a M€6,633 increase in other liabilities
including M€5,593 for consumable allocations for “Investments for the future”;
- a decrease in cash (-M€1,273):
-M€3,872 in Treasury
correspondent investments in term accounts;
+M€2,548 in Treasury fund
deposits: M€2,365 for national pubic establishments and M€1,740 for European communities.
The increase in liabilities (excluding financial debt) is presented in greater detail in Note 12 - Non-financial debt (excluding cash), Note 13 - Provisions for risks and liabilities, Note 14 – Other liabilities, Note 15 – Cash and Note 16 – Deferred income and expenses.
1.1.2 Change in the Central Government Income Statement
Change in net income: -M€ 17,045
Incr
ease
in
net i
ncom
eD
ecre
ase
in
net i
ncom
e
2013Net income
- 60,215
- 1,224
Net operating expenses
+8,635
Net intervention expenses
+6,974
Net financial expenses
- 2,660 2014 Net income
- 77,260
Net sovereign revenues
Net income for the period is down M€17,045 following an increase in net expenses of M€14,385 combined with a fall in net sovereign revenues of M€2,660.
12
1.1.2.1 PRINCIPAL CHANGES IN NET OPERATING EXPENSES
Net operating expenses
Staff costs
Purchases, changes in inventories and external services
Other operating expenses
Charges net of reversals
(-) Sales of goods and services
(-) Increase in inventories of finished goods and work-in-progress and capitalised production
= Net operating expenses
31/12/2013
135,467
20,844
8,587
14,102
3,199
113
176,374
31/12/2014
136,916
20,795
10,331
9,920
3,293
160
175,150- 1,224
Subsidies for pubic service expenses 27,710 27,719
- 4,182
+ 1,450
(-) Other operating income 27,07827,024
+ 1,744
The decrease in charges net of reversals (-M€4,182) comprises:
- a M€4,697 fall in provisions for risks: -M€3,460 primarily concerns provisions for the economy and the sustainable development of agriculture and the regions and -M€1,076 for tax-related litigation and disputes;
- a M€2,897 increase in provisions for
liabilities: +M€1,127 for charges net of reversals to provisions for dismantling costs;
- a M€1,661 decrease in current asset
write-downs: M€932 for other tax-related
receivables (primarily VAT, corporate income and income tax receivables).
The increase in other operating expenses (+M€1,744) concerns late payment penalties, fines and convictions for M€1,828. The M€1,450 increase in staff costs: +M€802 for pensions and M€625 for remuneration. The increase in net operating expenses is presented in the “Operating” cycle (Part 3 - Notes to the Income Statement): Note 18 – Staff costs, Note 19 – Purchases and other direct operating expenses, Note 21 – Indirect operating expenses: subsidies for public service expenses, Note 21 – Operating revenues and Note 22 - – Net charges to depreciation, amortisation and impairment – operating cycle.
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1.1.2.2 PRINCIPAL CHANGES IN NET INTERVENTION EXPENSES
31/12/2014Net intervention expenses
Transfers
Charges net of reversals
Expenses arising from government guarantees
(-) Contributions from third-parties
= Net intervention expenses
31/12/2013
147,566
- 6,161
8
1,985
139,428
143,421
6,655
11
2,025
148,063
- 4,145
+ 12,816
+8,635
The increase in charges net of reversals (+M€12,816) encompasses the following increases:
- +M€7,073 in provisions for transfers to households: +M€3,877 in military disability and war victim pensions (PMI-VG) and +M€1,711 in payments made by the National Agency guaranteeing the rights of miners (ANGDM) partially affected by changes in discount rates or reference rates between 2013 and 2014;
- +M€5,669 in provisions for transfers to
other entities: +M€5,428 in provisions concerning community cooperation in the context of solidarity with developing countries, including allocations of M€5,433 under the 11th European Development Fund;
The decrease in transfers (-M€4,145) is due to:
- a decrease in transfers to local authorities (-M€2,300): -M€1,385 for the DGF following the request for local authorities to contribute to efforts to balance the public accounts under the “Confidence and responsibility pact”;
- a decrease in transfers to businesses
(-M€1,582);
- a decrease in transfer to households (-M€1,102): -M€1,300 in transfers to fight against poverty in the form of active solidarity income (RSA) following changes to FNSA financing conditions.
The increase in net operating expenses is presented in the “Intervention” cycle (Part 3 - Notes to the Income Statement): Note 23 – Intervention expenses, Note 24 – Intervention revenues and Note 25 – Net charges to depreciation, amortisation and impairment – Intervention cycle.
14
1.1.2.3 PRINCIPAL CHANGES IN NET FINANCIAL EXPENSES
Net financial expenses
Interest
Other financial expenses
Exchange rate losses on financial transactions
Charges net of reversals
(-) Revenue from financial assets
(-) Other interest and similar revenues
= Net financial expenses
31/12/2013
42,327
15,958
113
-14,653
15,896
3,301
24,547
31/12/2014
41,990
4,923
245
-3,857
8,365
3,414
31,521
-11,036
+ 10,796
- 7,531
+ 6,974
The M€11,036 decrease in other financial expenses is tied to one-off transactions in 2013:
- the creation of BPI Groupe: in 2013, the Central Government transferred FSI and SOFIRED to the share capital of BPI Groupe: this transaction involved the removal of these investments for a total amount of M€8,069. In 2014, the most material transaction involved the removal of GDF Suez securities in the amount of M€1,134;
- the release of the Établissement public de
financement et de restructuration (EPFR) debt in the amount of M€4,480.
The increase in charges net of reversals (+M€10,796) reflects net charges to impairment of
equity method valuation differences (+M€13,044, due to a charge of M€564 in 2014 after an impairment reversal of M€12,480 in 2013). The M€7,531 decrease in revenue from financial assets is also due to one-off transactions in 2013: remuneration of Central Government transfers to BPI Groupe of M€7,279 and disposal proceeds recognised in 2013 on SAFRAN securities of M€1,279. The increase in net financial expenses is presented in the “Financial” cycle (Part 3 - Notes to the Income Statement): Note 26 – Financial expenses, Note 27 – Financial income and Note 28 – Net charges to depreciation, amortisation and impairment - Financial cycle.
15
1.1.2.4 PRINCIPAL CHANGES IN NET SOVEREIGN REVENUES
Net tax revenues
Income tax
Corporate income tax
Domestic duty on consumption of energy products (TICPE)
Value Added Tax
Registration fees, stamp duty, other contributions and indirect taxes
Other taxes and similar income
Total net tax revenues
31/12/2013
65,844
42,010
12,932
138,131
15,654
20,975
295,545
31/12/2014
69,956
33,640
12,552
139,335
16,950
17,706
290 139
- 8,370
- 3,269
+ 1,204
+ 1,296
+ 4,112
- 5,406
The decrease in net tax revenues is split between:
- a M€8,370 decrease in net corporate income tax revenue: +M€3,636 in gross revenue impacted in particular by new tax measures (primarily removal of the interest deduction), offset by the increase in tax obligations primarily impacted by the introduction of the CICE;
- a M€4,112 increase in net income tax
revenue:
+M€9,348 in gross revenue primarily following the reindexing of the income tax scale to inflation after a two-year freeze and the removal of a number of tax reduction and exemption measures;
+M€5,298 in income tax
obligations mainly due to the creation of the tax credit for the flat-rate deduction on investment income from 2014 and the exceptional income tax reduction for low income households in 2014.
The decrease in net revenue from other taxes and similar income (-M€3,269) is due to the decrease in gross revenue (-M€2,359) primarily affected by the new transfer measures to local authorities (impact on revenue from direct taxation collection and recovery costs) and FNAL and FNSA revenue. The increase in net revenue from registration fees, stamp duty, other contributions and indirect taxes (+M€1,296) is due to the increase in gross revenue (+M€1,301), primarily affected by duties on transfers for nil consideration. The M€1,204 increase in net VAT revenue is primarily due to the change in VAT rates effective 1 January 2014. Other net sovereign revenues comprising fines, deductions and other penalties increased M€1,216 following in particular an increase in gaming revenue and revenue from financial sanctions imposed by independent administrative authorities. The own resources of the European Union budget which are deducted from sovereign revenues are down M€1,530. The decrease in net sovereign revenues is presented in greater detail in the “Sovereign” cycle: Note 29 – Net sovereign revenues.
16
1.1.3 Change in principal Central Government off-balance sheet commitments
Principal off-balance sheet commitments (in € billion)
Debt guaranteed by the Central Government
Central Government pension commitments and equivalent
Commitments arising from the Central Government's role as economic and social regulator
ESM
Regulated savings plans
31/12/2013
203
1,468
371
126
416
31/12/2014
412
1,752
194
126
492
- 9
+ 121
- 4
+ 284
Central Government pension commitments and equivalent are up €284 billion, including €259 billion in respect of civil servants and military personnel, mainly due to the change in the discount rate applied for calculation purposes and the vesting of new rights to active employees as at 1 January 2014 and employees recruited in 2014 (see Note 35 – Central Government pension commitments). The decrease in debt guaranteed by the Central Government (-€9 billion) is mainly due to:
- the expiry in 2014 of the guarantee mechanism in favour of Société de financement de l’économie française (SFEF) (-€24 billion);
- the overall increase in debt outstandings
guaranteed in favour of UNEDIC (+€5.7 billion) following the issue of 9 new bond lines for a total amount of €7 billion;
- the €4.7 billion increase in the guarantee
granted to EFSF following additional assistance provided to Greece and Portugal.
The increase in commitments arising from the Central Government's role as economic and social regulator (+M€121) is mainly due to the following increases:
- €71 billion for subsidies to pension regimes and subsidies to balance special regimes, primarily following a change in the discount rate applied in 2014 (0.17% compared with 1.08% in 2013);
- €55 billion for housing benefits (APL and
ALS) mainly due to a change in the funding split between the Central Government and the Social Security office.
This increase is partially offset by a decrease in off-balance sheet commitments in respect of:
- the adult disability allowance (AAH) (-€3 billion) affected by the annual revaluation of calculation assumptions for the Central Government commitment;
- active solidarity income (RSA)
(-€1.9 billion) due to the inclusion of suspensions in regime exits.
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The decrease in commitments in respect of regulated savings plans (-€4 billion) concerns the decrease in commitments in respect of livret A, livret bleu and sustainable development savings accounts in the amount of €2.1 billion and Épargne Populaire savings accounts in the amount of €1.8 billion.
The increase in Central Government off-balance sheet commitments is presented in Part 5 – Central Government commitments and other information.
1.2 MAIN EVENTS OF THE PERIOD 2014 was marked by several measures to support investment and innovation. At a national level, the second “Investments for the future” programme for a total amount of €12 billion, in addition to the €35 billion allocated under the first programme, focuses on strengthening competiveness, employment and sustainable development. In addition, the tax credit for competitiveness and employment (CICE), a major lever of the National Pact for Growth, Competitiveness and Employment, is reflected in the accounts this year. At European level, the assistance mechanisms (the European Financial Stability Fund, FESF and the European Stability Mechanism, ESM) provide essential support to the economies of the countries benefiting from these programmes. The ESM also has other missions aimed at stabilising the banking sector. The impact of these events on the accounts is presented below.
1.2.1 A second “Investments for the future” (IFF) programme to support the economy Since 2010, two IFF programmes have been adopted and implemented to support sectors with growth potential: in 2010 (the 2010 amended Budget Act, Law no. 2010-237 of 9 March 2010) and in 2014 (the 2014 Budget Act, Law no. 2013-1278 of 29 December 2013). 1.2.1.1 CHANGE IN “INVESTMENTS FOR THE FUTURE” PROGRAMMES
2010
Launch of the first "Investments for the future"
programme• €35 billion allocated to 5 priorities
2013
Redirection of the "Investments for the future"
programme• €2.2 billion of credit redirected to major priorities, including sustainable development
and the digital economy
2014
Launch of the second "Investments for the future"
programme• €12 billion invested in 8 priorities with a
specific focus on the energy and environmental transition
Change in "Investments for the future" programmes between 2010 and 2014
The first IFF program launched in 2010 comprised credits of €35 billion allocated to the following main sectors:
Sustainable development
5
Research, higher eduction
and training19
Industrial sectors and
SME7
Digital economy5
Allocation of credits under the first "Investments for the future" programme(in € billion)
In January 2013, it was decided to redirect €2.2 billion of the 2010 IFF programme. This decision did not modify the initial amount of €35 billion but changed the allocation of credits to
reflect the priorities of the National Pact for Growth, Competitiveness and Employment adopted in November 2012. The following priority areas were identified:
- support for innovation and industrial sectors,
- the development and spread of generic technologies,
- training, - energy transition, - development of the living economy and
healthcare. The second IFF programme was launched by the 2014 Budget Act, Law no. 2013-1278 of December 29, 2013. It strengthens the objectives defined in 2010, with a stronger focus on energy and environmental
18
transition. The measures focus on 8 priorities allocated to 15 programmes.
2 000
830
852
565
3 987
1 009
1 000
1 758
Allocation by programme of IFF 2 after redeployment Technological excellence of defense companies
Innovation for energy and environmentaltransition
Innovation
Digital economy
Ecosystems of excellence
Research in the aeronautic sector
Loans to SMEs
Other programmes
Credits opened are subject to cross-compliance criteria, spread across three key principles:
- readability for project owners who must provide information on these criteria;
- the ability of the Central Government, the
managing entities and experts to analyse information provided by project owners in support of their projects, assess the information and monitor the information as measures are implemented;
- the reflection in the assessments of IFF
programme measures. 1.2.1.2 MANAGEMENT OF “INVESTMENTS FOR THE FUTURE” PROGRAMMES
O STEERING OF “INVESTMENTS FOR THE FUTURE” PROGRAMMES
IFFs are managed by twelve entities: Caisse des dépôts (CDC) and eleven Central Government bodies. They are steered based on three phases involving the following three players:
- the Commissariat-General for Investment (CGI) reporting to the Prime Minister’s office, in charge of monitoring IFF: involved throughout the programme implementation chain;
- the management bodies responsible for
four key missions:
participation with the ministries and the CGI in the formal drafting of the strategic financing focus and specifications for calls for projects (Phase 1 and 2);
the launch and management of
the calls for projects (Phase 2);
the implementation of Central Government decisions regarding projects: contracting with the winners and allocation of funds (Phase 3);
project monitoring,
- the Supervisory Committee responsible for
assessing and preparing an annual report on IFF performance (Phase 3).
• Preparation of agreements between the Prime Minister and each of the managing bodies
Phase 1 Operator contracts
• Drafting of specifications
• Examination of files• Assessment by a jury
Phase 2 Project selection • Contracting between
the management bodies and each winner
• Project performance• Project assessment
Phase 3 Project phase
Stages in the implementation of the "Investments for the future" programme
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O DESTINATION OF IFF EXPENDITURE
The nature of payments to final beneficiaries is specified in agreements between the Central Government and the management bodies. Funds allocated to IFF investments comprise:
- consumable allocations in the form of subsidies, repayable advances, loans, equity investments and guarantee funds;
- non-consumable allocations; only
remuneration in the form of interest contributes in the same way as consumable allocations to the financing of agreements.
1.2.1.3 IMPACTS ON THE CENTRAL GOVERNMENT ACCOUNTS
O ACCOUNTING TREATMENT OF “INVESTMENTS FOR THE FUTURE” IN THE CENTRAL GOVERNMENT ACCOUNTS
General treatment of "Investments for the future" in the Central Government accounts
Nature of IFF expenditure
Allocations/Loans and advances
Subsidies
Balance Sheet - Assets
Fixed assets
Current assets
Other receivables
Balance Sheet -Liabilities
depending on the nature of the expenditure: consumable
or non-consumable
Other liabilities
Consumable allocations
Deferred income
Non-consumable allocations
Income Statement
Financial expensesInterest on non-
consumable allocations
Transfer of financial expenses Funds allocated in respect of IFF give rise to the recognition of a financial asset or a current asset depending on the nature of the expenditure: subsidy or equity investment. A corresponding liability is recognised and broken-down to reflect the consumable or non-consumable nature of allocations to entities. Pursuant to the amended Budget Act of 9 March 2010, non-consumable allocations are remunerated in accordance with the terms and conditions and at the rates set out in the Order dated 15 June 2010 issued jointly by the Budget and Finance ministers. This interest contributes, in the same way as allocations, to the financing of “Investments for the future” agreements, primarily in the form of subsidies. Accordingly, this interest results in a transfer of financial expenses to “receivables” in the balance sheet.
Treatment and impacts on the Central Government accounts of IFF expenditure on consumption
Nature of IFF credits consumed
Allocations
Subsidies
Balance sheet - Assets
Decrease in asset accounts
Fixed assets
Other receivables
Balance Sheet -Liabilities
Decrease in consumable allocations
Other liabilities
Other liabilities
Balance Sheet /Income Statement
Recognition of the nature of credits consumed
Increase in assets and expenses
Fixed assetsloans, equity
investments, tangible assets
Operating expenses, management expenses
Intervention expenses subsidies
On use, IFF expenditure has a number of impacts on the Central Government accounts:
- decrease in financial assets or other receivables depending on the nature of credits consumed;
- reduction in the amount of consumable
allocations in other liabilities for the portion of funds used;
- recognition in the income statement and
the balance sheet of the use of funds: subsidies, loans, advances, allocations, operating expenses.
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O POSITION OF “INVESTMENTS FOR THE FUTURE” IN THE CENTRAL GOVERNMENT ACCOUNTS
GENERAL POSITION OF “INVESTMENTS FOR THE FUTURE”
31/12/201431/12/2013 Restated
Change
Net assets 46,985 35,884 11,100
Tangible assets 172 0 172
Tangible assets in progress 172 - 172
Financial assets 37,600 30,938 6,662
Controlled entities 877 877 -
Investment-related receivables 30,479 23,429 7,050
Other financial assets / Loans and advances 454 37 417
Unincorporated entities 5,790 6,596 -806
Receivables 9,213 4,946 4,267
Other receivables 9,213 4,946 4,267
Liabilities 42,269 33,411 8,858
Other liabilities - consumable allocations 20,274 14,681 5,593
Deferred income - Non-consumable allocations
21,995 18,730 3,265
In the balance sheet, “Investments for the future” impact net assets in the amount of M€46,985, including M€37,600 in financial assets and M€9,213 in receivables. The increase in assets recognised as at 31 December 2014 reflects the impact of the second IFF programme (investment-related receivables and receivables) and the transfer to management entities of new funds, less the consumption of credits recognised through the income statement (subsidies) or assets (for allocations, and loans and advances paid).
In liabilities, “Investments for the future” programmes impact other liabilities and deferred income. These two headings group together consumable credits not yet used and non-consumable credits. The increase in 2014 is mainly due to the adoption in 2014 of a second IFF programme.
31/12/201431/12/2013 Restated
Change
Operating expenses 150 67 83
Purchases, changes in inventories and external services
133 12 122
Subsidies for public service expenses 17 55 -38
Intervention expenses 1,240 1,628 -388
Transfers to households 135 35 99
Transfers to businesses 159 225 -66
Transfers to local authorities 37 29 8
Transfers to other entities 910 1,339 -429
Financial expenses 877 836 41
Interest received on the remuneration of non-consumable allocations
688 667 21
Accrued interest not yet due 189 168 20
Financial income 661 641 20
Financial expense transfers 661 641 20
Net impact of "Investments for the future" 1,606 1,889 -283
In the income statement, “Investments for the future” programmes represent a net expense of M€1,606 in net expenses. The income statement accounts primarily reflect the use of credits in the form of subsidies and transactions concerning the remuneration of deposits.
21
ANALYSIS OF THE CHANGE IN “INVESTMENTS FOR THE FUTURE”
31/12/2013 Restated
Increase in IFF funds
Decrease in IFF funds
Accounting nature of funds
consumedOther Change 31/12/2014
Net assets 35,884 11,100 46,985
Tangible assets 0 172 172 172
Tangible assets in progress 0 172 172 172
Financial assets 30,938 7,125 (1,493) 417 612 6,662 37,600
Controlled entities 877 0 877
Investment-related receivables 23,429 7,125 (688) 612 7,050 30,479
Other financial assets / Loans and advances 37 417 417 454
Unincorporated entities 6,596 (806) (806) 5,790
Receivables 4,946 5,573 (1,272) 0 (34) 4,267 9,213
Other receivables 4,946 5,573 (1,272) (34) 4,267 9,213
Liabilities 33,411 8,858 42,269
Other liabilities - consumable allocations 14,681 10,961 (5,368) 5,593 20,274
Deferred income - non-consumable allocations 18,730 3,265 3,265 21,995
Operating expenses 67 19 131 83 150
Intervention expenses 1,628 0 0 1,522 (282) (388) 1,240
Transfers to households 35 135 99 135
Transfers to businesses 225 440 (282) (66) 159
Transfers to local authorities 29 37 8 37
Transfers to other entities 1,339 910 (429) 910
Financial expenses 836 0 0 0 877 41 877
Interest 667 688 21 688
Accrued interest not yet due 168 189 20 189
Financial income 641 0 0 0 661 20 661
Financial expense transfers 641 661 20 661
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1.2.2 The Tax Credit for Competiveness and Employment (CICE) to support companies The CICE, introduced by Article 66 of the amended Budget Act no. 2012-510 of 29 December 2012, is part of a series of measures implemented under the National Pact for Growth, Competiveness and Employment. It came into effect on 1 January 2013. 1.2.2.1 PRESENTATION OF THE CICE
O GENERAL PRINCIPLES The CICE is a tax benefit for companies with employees and is equivalent to a decrease in their social security contributions. The CICE is intended to enable these companies to free up resources to finance investment, innovation, research, training and the energy and environmental transition.
The CICE was introduced in favour of companies taxed based on their actual profits and liable to corporate income tax or income tax. It applies irrespective of the company’s operating method and the taxation category to which it belongs, provided it has employees.
O OPERATION OF CICE
CICE CALCULATION
Application conditions
1. Remuneration less than or equal to 2.5 times the minimum wage (SMIC)
2. Remuneration used to calculate employer social security contributions
3. Amounts deductible from income liable to IT or CIT
Calculation basis
Remuneration paid during the calendar
year
Applicable rate
4% of remuneration paid in 2013
6% of remuneration paidfrom 2014
Operation of CICE
2013 2014
Opening of entitlementrate = 4%
Opening of entitlement
rate = 6%
Deductible from 2014 corporate income tax
Pre-financingCICE repayment >
Tax payableCICE repayment >
Tax payable
Tax paymentTax payment
2015
Opening of entitlement
Deductible from 2015 corporate income tax
The CICE is deducted on payment of the final corporate income tax or income tax instalment. The excess not deducted represents a receivable in favour of the company deductible from income tax payable for the next three periods. The receivable not offset at the end of the three periods is repaid to the company. Thus, the 2014
CICE may be offset again tax payable in respect of the periods 2014 to 2017 and any residual receivable not offset will be repaid in 2018. Exceptionally, the excess tax credit not offset is repayable immediately to SMEs, as defined by European community law (less than 250 employees and either net sales of less than M€50 or net assets
23
of less than M€43), young innovative companies, new companies satisfying applicable criteria and companies subject to conciliation, protection, receivership or liquidation proceedings.
Developments relating to pre-financing are presented in greater detail in Part V – Central Government commitments and other information.
1.2.2.2 IMPACTS OF THE CICE ON THE CENTRAL GOVERNMENT ACCOUNTS
CICE: impacts on the accounts of the companies and the Central Government
In Y, the companies calculate the CICE amount based on remuneration paid to employees in Y
In Y+1, the companies file their CICE return
Y+1: CICE return
In Y+1, on recognition of the trigger (filing of return no. 2572 for corporate income tax or the income tax return), the Central Government recognises tax revenue less the amount of the CICE
Y: calculation of the CICE amount
Companies
Central Government
Recognition of an expense in respect of the tax and income
in respect of the CICE
Recognition of tax revenue in respect of the tax. The CICE is deducted from
the tax amount.
No impact in the accounts in Y
In the balance sheet, the CICE impacts other non-financial liabilities. Accrued expenses relating to corporate income tax repayments are up M€3,546, including M€3,703 attributable to the CICE, recognised for the first time in 2014 (see Note 12 - Non-financial debt (excluding cash)).
In the income statement, the CICE impacts the change in corporate income tax and particularly tax obligations recognised as a deduction from corporate income tax revenues (+M€2,728): M€3,977 for the CICE (see Note 29 – Sovereign revenues).
1.2.3 Position of European financial assistance programmes 1.2.3.1 FINANCIAL ASSISTANCE PROGRAMMES MONITORED BY EFSF AND EFSM The financial instability in the Spring of 2010 led the Member States of the European Union to introduce two financing vehicles:
- the European Financial Stabilisation Mechanism (EFSM), a European Commission issues programme with a capacity of €60 billion;
- the European Financial Stability Fund
(EFSF) able to perform bond issues on the markets of up to €440 billion guaranteed by Eurozone Member States.
The EFSM and the EFSF were launched in the context of three financial assistance programmes:
Ireland in November 2010, Portugal in May 2011 and Greece in July 2011 for the second assistance plan. These two institutions should not be involved in new assistance programmes: the ESM was launched as a permanent institution from September 2012, the date of entry into effect of the treaty. The EFSF is nonetheless still operational for financial assistance programmes commenced before the entry into effect of the ESM, until settlement of obligations under open programmes. The final payments scheduled under the assistance plans should be made in April 2014.
24
Maximum amount of financial assistance granted (in € billion)
31/12/2013 31/12/2014 31/12/2013 31/12/2014 31/12/2013 31/12/2014 31/12/2013 31/12/2014
Total payments made (in € billion) 83.7 85.0 71.6 76.8 73.0 73.0 142.0 153.6
o/w EFSF payments 17.7 17.7 24.8 26.0 133.5 141.8
o/w ESMF payments 21.7 22.5 22.1 24.3
o/w IMF payments 22.5 22.5 24.7 26.5 20.1 20.1 8.4 11.8
o/w bilateral loans 4.8 4.8 52.9 52.9
- o/w France 11.4 11.4
- o/w other Eurozone countries, the UK, Denmark and Sweden
4.8 4.8 41.5 41.5
National contributions to the programme 17.0 17.5
Ireland Portugal Greece (1st programme) Greece (2nd programme)
85.0 78.5 110.0 163.4
The Irish assistance programme increased €1.3 billion over the year, including:
- €0.8 billion for the ESMF: an additional tranche of €0.8 billion was paid on 25 March 2014;
- €0.5 billion for the Irish national
contribution. Payment outstandings increased €5.2 billion for Portugal, including:
- €2.2 billion for the ESMF: two additional tranches of €1.8 billion and €0.4 billion were granted to Portugal on 25 March and 12 November respectively;
- €1.8 billion for the IMF due to two additional assistance payments during the first half of the year of €0.9 billion each;
- €1.2 billion for the EFSF paid on 25 March
2014. The second Greek assistance programme increased €11.6 billion, including:
- €8.3 billion for EFSF following the payment of new assistance of €6.3 billion on 28 April and €1 billion on 9 July and 14 August;
- €3.4 billion for the IMF following the grant
of new financial assistance during the second quarter.
1.2.3.2 FINANCIAL ASSISTANCE PROGRAMMES ISSUED BY THE ESM The ESM is an international organisation whose aim is to mobilise resources in order to provide assistance to its members experiencing difficulties or likely to experience difficulties which could undermine their financial stability. This assistance is conditional on compliance with an economic policy adopted by the State receiving the funds. Its operation is not based on guarantees provided by Member States, as is the case for the EFSF, but on capital allocations: the authorised capital of the European Stability Mechanism (ESM) is €702 billion as at 31 December 2014, including €80 billion of paid-up capital and €622 billion of callable capital.
Pursuant to the contribution key set out in Appendix I, as amended, of the treaty establishing the ESM, France’s share in this capital of €702 billion is 20.3297% as at 31 December 2014. The ESM is authorised to raise funds by issuing financial instruments or entering into financial agreements with members, financial institutions and other third parties. Since its creation, the ESM has been involved in two assistance programmes: Spain in July 2012 and Cyprus in May 2013.
Maximum amount of financial assistance granted (in € billion)
31/12/2013 31/12/2014 31/12/2013 31/12/2014
Outstandings (in € billion) 41.3 39.7 4.9 6.1
o/w ESM outstandings 41.3 39.7 4.6 5.7
o/w IMF outstandings - - 0.3 0.4
Spain Cyprus
100 10
25
Spanish outstandings to the ESM fell in 2014 due to an early repayment of €1.3 billion on 8 July 2014 following the sale of a portion of the share capital of BFA-Bankia, one of the banks recapitalised under the programme. Spain also performed an additional repayment on 23 July 2014 of funds of €0.3 billion not used at this date, in accordance with the terms of the loan agreement. In total, Spain therefore repaid €1.6 billion to the ESM bringing its outstandings to €39.7 billion. Pursuant to the contract, Spain is not due to repay the loan before 2022. Thanks to this early payment,
the repayment debited each year between 2022 and 2027 will be around €0.2 billion lower than initially scheduled. For Cyprus, ESM outstandings increased from €4.6 billion as at 31 December 2013 to €5.7 billion as at 31 December 2014. Three additional tranches were paid to Cyprus in 2014: €0.15 billion on April 4, €0.6 billion on 9 July and €0.35 billion on 15 December. The €0.1 billion increase in IMF outstandings is due to two payments in the first half of the year.
1.2.3.3 CREATION OF A BANKING UNION AND ESM INTERVENTION
O REASONS FOR CHANGE Following the Spanish banking crisis requiring the intervention of the EFSF, the heads of State or government of the Eurozone decided, on 29 June 2012, to create a banking union founded on three pillars. The objectives set were to make all banks safer, guarantee the rapid intervention of supervisory authorities and procure the necessary tools to efficiently manage a banking crisis.
3 pillars of the Banking Union
Single Supervisory Mechanism
(SSM)
• The ECB becomes the central supervisor for banking institutions in the Eurozone and "non euro" countries that are members of the SSM
Single Resolution Mechanism (SRM)
• Management of the banking crisis by a Single Resolution Board and a Single Resolution Fund financed by the banking sector
Commonregulations
• All European Union financial institutions are subject to common regulations
Banking Union
The ESM is part of the Banking Union through the direct recapitalisation of banks. It seeks to avoid in the future the risk of contagion between a banking crisis and the public finances of Member States, particularly by limiting the impact of any bank recapitalisation. On 10 June 2014, the Member States entered into a political agreement on the operational framework of the ESM direct recapitalisation mechanism. This
new instrument became operational in December 2014.
O GENERAL PRINCIPLES CONDITIONS OF ESM DIRECT INTERVENTION This instrument may be activated where “a bank fails to attract sufficient capital from private sources” and “if the country concerned is unable to recapitalize it”, including through the ESM indirect recapitalization instrument. Direct recapitalisation concerns €60 billion of the €500 billion intervention capacity of the ESM. IMPLEMENTATION TIMETABLE During a transitional period, for a bank to benefit from the EMS direct recapitalisation mechanism, at least 8% of its losses must be bailed in, that is covered by its shareholders and creditors. Available resources in the national resolution fund of the EMS Member State concerned must also have been used. From 1 January 2016, the bail-in must be performed in accordance with the Banking Resolution Directive. In additional to the prior deduction of 8% of the liabilities of the bank concerned, a contribution of the national resolution fund of up to 5% of the bank’s liabilities and the conversion of unsecured and non-preferential receivables must be performed before recourse to the direct banking recapitulation instrument may be considered.
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1.2.3.4 IMPACTS ON THE CENTRAL GOVERNMENT ACCOUNTS
O IMPACT ON THE BALANCE SHEET In assets, France’s payments in respect of bilateral loans under the Greek rescue plan total M€11,405 (see Note 8 – Financial assets). In liabilities, the fifth and final payment in respect of France’s capital contribution to the ESM was deducted from non-financial debts in the amount of M€3,262 (see Note 12-Non-financial debt (excluding cash)). Capital called and paid now totals M€16,309 as at 31 December 2014 (see Note 8 – Financial assets).
O IMPACT ON THE INCOME STATEMENT
In the income statement, interest received on bilateral loans to Greece totalled M€49 in 2014 (see Note 27 – Financial income). The Banque de France special contribution in respect of France’s contribution to the Greek debt reduction is down M€607: in 2014, the Banque de France paid M€399 to the Central Government
under the 26 June 2013 agreements, compared with M€1,006 in 2013 (see Note 21 – Operating revenues). In intervention expenses, France’s payment to Greece in respect of the retrocession to this State of revenue received by the Banque de France on Greek bonds totalled M€501 compared with M€599 in 2013 (see Note 23 – Intervention expenses).
O IMPACT ON OFF-BALANCE SHEET COMMITMENTS
As at 31 December 2014, the guarantee granted by France in respect of the EFSF totalled M€75,015, compared with M€70,362 as at 31 December 2013, following additional assistance paid to Greece and Portugal (see Part V – Central Government commitments and other information). The Central Government is committed under the ESM in the amount of M€126.4 in respect of the callable capital of the European Stability Mechanism (see Part V - Central Government commitments and other information).
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