Quality of statistical data in the Union and enhanced auditing powers by the Commission (Eurostat) (debate)
President
The next item is the debate on the oral question to the Commission by Mr Karas and Mrs Bowles, on behalf of the Committee on Economic and Monetary Affairs, on the quality of statistical data in the Union and enhanced auditing powers by the Commission (Eurostat) - B7-0314/2010).
Othmar Karas
author. - (DE) Mr President, Commissioner Rehn, ladies and gentlemen, today's debate is an important political signal that the European Parliament wants to send in these times. The tabling of this oral question in the midst of the process of redesigning Eurostat and drawing up the European Parliament's statement to the Commission is also a sign of our determination.
In submitting a separate resolution, we are demonstrating that the European Parliament needs and wants Eurostat to act independently and comprehensively. This is the first direct response by the legislature to experiences in and with Greece. At the same time, we should not forget that in 2005, the Council rejected Commissioner Almunia's Five Point Plan and thereby prevented the Commission from being equipped with the necessary instruments. We are catching up with what we could have done, and needed to do, long ago. Consequently, I would like to remind both the Commission and the Council that the political will exists to evolve all the instruments needed to ensure that the euro is supported not only by the pillar of monetary union, but also by the pillar of economic union. I call on the Council not to block, not to delay, not to prevent, but rather to give the Commission this opportunity.
We also want to know whether any investigations are being made into where Eurostat and/or the Member States have acted incorrectly in recent years, since it is only once we have a clear analysis that we can know which corrections and additions need to be made.
What does the European Parliament want? We want independence, we want comparability - and therefore minimum standards for collecting statistics, minimum standards for the institutional structure of the authorities and cooperation with the ECB. We want all actions to be able to be checked, which is why Eurostat must be able to carry out unannounced checks at any time. We want its powers to be extended because we want insight into all the data - including that at regional and municipal level and for social security. We want seamless cooperation, we want to strengthen the coordination function and we want the Commission to tell us before we conclude our report whether everything that has been agreed with the Council so far is sufficient. We do not think so. We are talking about a minimum declaration, catching up with what has not been done, taking the next step towards greater independence and more comprehensive powers.
Sharon Bowles
author. - Mr President, the Committee on Economic and Monetary Affairs is consistent and united in its view that Eurostat has to be strengthened and we have, for a long time, been in pursuit of establishing higher quality statistical data.
We know the history as Mr Karas has already referred to it. In 2005, the Council brought shame on itself and sowed the seed of the current sovereign debt problems by weakening the Stability and Growth Pact and simultaneously denying audit powers to Eurostat. With that history, it takes time to regain trust, and lack of trust contributed to why, in the recent troubles, Member States had to put a lot of cash on the table. Words and political commitments by the Ecofin Council were not enough.
Soon, we will at last have audit power for Eurostat, all the more important now because it is the key that can make other plans about economic surveillance effective. A tool to get a grip on an outturn is so much better than just a grip on promises.
We want the quality of data to be improved, for it to be timely, and we want to be able to examine upstream input to national accounts, and we ask: is the new power given to Eurostat sufficient? Even now, the Ecofin Council has added in some conditionality to the new auditing power, actually less restricting than many of us feared, but has it undermined the possibility for really early investigation and intervention?
The European Parliament's report favours unconditional rights for Eurostat to do so-called methodological visits. Of course, resources must be targeted where needed, but investigation needs to happen at the time of suspicion, not after the event.
Finally, when will we know that like is truly compared with like? What progress is being made to ensure that accounting procedures are standardised and sufficiently transparent to capture off-balance-sheet activity and any other innovative practices?
Olli Rehn
Member of the Commission. - Mr President, let me first thank Mr Karas, Ms Bowles and others for raising these very important issues concerning the quality of statistical data and Eurostat. Let me also welcome the support expressed in your draft opinion for the Commission proposal to amend the Regulation on the Application of the Protocol on the Excessive Deficit Procedure (EDP).
Let me point out that this is the very first legislative proposal of Mr Barroso's second Commission in February. I am glad that it will soon be adopted, I trust, and we will then have it in our arsenal. We needed it a long time ago, as Ms Bowles said.
The original proposal to this effect was made in 2005, but it was then rejected by the Member States. Times have changed and now we have broad support for this in the Council.
As regards this proposal, the general approach agreed upon by the Ecofin Council on 8 June last week confirms the importance of ensuring high quality statistics on government debt and deficit and acknowledges the role of the Commission and Eurostat for that purpose.
The regulation being finalised preserves the main objective of the proposal put forward by the Commission, namely, granting more audit powers to Eurostat when a significant risk or problem with the quality of data has been identified. The Commission can, therefore, accept the compromise text.
The Commission intends to take several further steps with regard to strengthening the quality of European statistics for the EDP. There will be an immediate reinforcement of staff resources dealing with this work, mainly by internal redeployment within Eurostat. Member States will be visited more regularly than at present in the so-called EDP Dialogue Visits.
The Commission will ensure the integration of more information on source data for compiling statistics into the EDP inventories foreseen by the regulation. Should there arise an exceptional case where significant risks or problems with respect to the quality of the data have been clearly identified, Eurostat will use all the relevant powers at its disposal under the new rules, including, of course, the audit powers.
Before concluding, let me say a few words about Greece on some topical issues. I wish to use this opportunity and maybe take a minute more of your time. As is well known, the Commission has undertaken in-depth work on Greek statistics over several years. The amended regulation should, in future, better mitigate the risk of fraud or manipulation of statistics, or of any other kind of irregularity.
Yesterday, there was a new development concerning Greece. You will know that Moody's decided to downgrade Greek bonds yesterday. I have discussed this also with my colleague Michel Barnier and the Commission President. I must say that the timing of Moody's decision is both surprising and highly unfortunate, coming after the agreement on a macro-economic adjustment programme between Greece and the Commission, the ECB and the IMF.
The measures taken by the Greek Government illustrate their commitment to implement the strategy to reform the statistical system, to stabilise their public finances and to restore long-term sustainable economic growth. This decision of Moody's seems inconsistent with the evolution of Greek sovereign bond deals and CDS spreads, which have narrowed significantly since the agreement on the programme. This again raises issues relating to the role of credit rating agencies in the financial system and prudential regulation.
These issues and others will be taken into consideration in the Commission's thinking on the future of credit rating agencies. In particular, the Commission will look in the coming months at the issues of the level of competition in this sector - highly concentrated for the time being - as well as at the transparency regarding methodology and the conflict of interests, since the system remains based on the payer-issuer model.
Let me conclude by saying that it is of absolute importance that we have accurate and reliable statistical data on national accounts. It is one of the cornerstones of a properly and effectively functioning economic and monetary union, as was underlined for instance by Mr Karas. Hence, this amendment on Eurostat's powers is part and parcel of reinforcing economic governance in Europe, which is indeed a necessary objective.
Edward Scicluna
on behalf of the S&D Group. - Mr President, I am glad that the Commission has provided legislative proposals to bolster Eurostat that are currently being scrutinised by the ECON Committee.
The quality of statistical governance lies at the heart of the crisis in the eurozone. There is no doubt in my mind that Eurostat should have wider powers, in particular, to make on-site inspections in Member States. But such inspections should not just be with officials from the Member State's Finance Ministry or with national statistical authorities or even with state-owned corporations: they should include, if the work deems these relevant, academic economists, trade unions, NGOs, etc. This is something which rating agencies, or even IMF delegations, do as a matter of fact.
Secondly, we must have a common system of accounting - used by all Member States, based on a standardised and internationally accepted method of accounting, and agreed between the Member States, Commission and Parliament. This should not apply just to financial reports as provided to the Commission but they should also be used in the Member States' public sectors themselves.
Over a decade after the creation of the eurozone and the introduction of the euro, we have discovered basic flaws in the system that are causing damage. These flaws we ignored, ironically, because of the false sense of security created by a successful euro. We must ensure that in the future, markets trust governments' economic forecasts and statistics. We must correct these flaws, and fast.
I therefore urge the Commission to continue to work closely with Parliament and Council to resolve these problems as a matter of urgency.
Sylvie Goulard
Mr President, Commissioner, the current crisis in the euro area cannot, of course, be attributed to the shortcomings of the common statistical system. Nonetheless, these shortcomings have had serious consequences. There are the economic consequences, and we have heard a great deal about them, but there are also consequences in terms of the credibility of the European Union. Here we are broaching what is, in my view, one of the major problems with the way in which the Union operates today. Governments make promises to their citizens, and rightly so; they say that mutual undertakings will be strictly monitored, that the criteria will be examined down to the very last decimal point - in the original German, that equates to drei komma null - but these very same governments have, year after year, refused to give Eurostat the resources it needs to do its job. All this is to the detriment of the common good, as anything that weakens the Commission weakens us all.
That is why we wholeheartedly support this resolution, which calls for the Commission, Eurostat, to be granted investigative powers, and common standards to be strengthened. Without this effort to ensure rigour in the use and compilation of data, the promises of rigour will not be kept. Europeans will feel increasingly at sea and it will be the European Union that loses face.
Franz Obermayr
(DE) Mr President, the debate on enhanced powers for Eurostat does not really address the problem. We must never again find ourselves in a situation in which a Member State plays tricks with its budget data and lives beyond its means for years at the expense of others; where there are reasons to doubt data, the data must be verified. However, the EU must not use Greece and the current euro crisis as an excuse to completely remove powers of budgetary sovereignty from the Member States. Rather, the problem must be rooted out.
The socio-economic structures of the Member States vary greatly in some instances. Even Eurostat, which juggles the figures for the EU, must realise this. An unemployed person in London is not the same as an unemployed person in Paris, because different criteria apply. The differences in socio-economic realities between the traditional hard currency and soft currency countries are even more striking.
Eurostat must not maintain this myth of comparability at any price; rather, the comparability of the euro area countries must be fundamentally rethought.
Anni Podimata
(EL) Mr President, Commissioner, allow me to start by expressing my total satisfaction about the comment you made earlier about yesterday's sudden and unwarranted decision by the Moody's credit rating agency to downgrade Greece's credit rating, a decision which you called unfortunate and erroneous, thereby confirming that our decision to proceed with a radical review of the operating framework of these firms in European territory and to seriously examine the possibility of creating a public European credit rating agency was correct.
As regards today's debate and the proposal to review the regulation on the quality of statistical data within the framework of the excessive deficit procedure, we all know that this follows on from the so-called 'Greek affair' in terms of false statistics.
As a Greek MEP, I obviously do not feel happy that Greece is used as an example to avoid in such a debate. However, I wish to remind the House - as you did Commissioner - that Greece, the current Greek Government, was the first to recognise the problem and immediately took radical decisions to deal with it, first of all by converting the National Statistics Office into a fully independent authority supervised by Parliament and, secondly, by taking steps to set up an examining committee to investigate and apportion blame to those involved in this unacceptable procedure.
Nonetheless, we must recognise that this debate is belated at European level, as there have been adequate statistics which should have galvanised us into action since 2005.
Dimitar Stoyanov
(BG) I wish to steer the debate in a more practical direction because last week, the Commissioner declared that there will be a special audit carried out by Eurostat on the statistical data which the Commission has received from Bulgaria.
Unfortunately, however, it was not clear from Mr Rehn's statement why such an audit was necessary. This is why I wish to take this opportunity now to ask him a question.
Which criteria singled out the most stable Member State in the Balkans when all the other Member States in the Balkans are experiencing great difficulties? What were these criteria which determined that an audit should be carried out specifically in Bulgaria? Is this not also a sign of some inertia on your part, coming from your previous area of responsibility, enlargement?
You also just said that it is highly unfortunate that Moody's has downgraded Greece's credit rating. However, do you realise that by bandying about such statements in the public domain, Bulgaria's credit rating too may be downgraded next? You cannot then get angry at Moody's. You will only have yourself to get angry at in that case.
Olle Ludvigsson
(SV) Mr President, there are simple measures that need to be taken to create economic stability within the EU. One of the simplest but, at the same time, important measures is to increase the quality of the economic statistics. In this area, it is perfectly possible to achieve significant improvements relatively quickly. I therefore welcome the positive signals sent out by both the Commission and the Council. My hope is that it will be possible to quickly reach agreement on effective packages of measures that will take the quality of the statistics to a higher level.
I believe that we need to strengthen the role and powers of Eurostat. Eurostat must also continue to cooperate with the national producers of statistics, but the hierarchy and levels of decision making need to be made clearer. Eurostat must be able to demand to see correct national data and must be able to make use of both sanctions and special inspections if the quality is not good enough.
Greater resources are needed if the statistics are to improve. It is important for us to realise that higher quality requires greater investment in this regard. We need to establish a plan for Eurostat. Its capacity must be increased and we need to ensure that the budget provides room for this increase in capacity. I am concerned that so far, the statistics have not been a priority within this area in the ongoing decision-making discussions. I hope that we will see this increased investment.
Andreas Mölzer
(DE) Mr President, we are all aware that the amendment of the regulation as regards the quality of statistical data in the context of the excessive deficit procedure is a particularly important and urgent measure in view of the present problems in most of the national budgets of the Member States. Without precise, clear data, it is difficult to decide on and establish further measures. To this extent, a control mechanism needs to be put in place that allows the data submitted by the national authorities to be verified in good time. In any event, we must never again find ourselves in a situation - such as we did with Greece - in which it is only in retrospect that it becomes apparent that decisions with wide-ranging implications were taken on the basis of incorrect or falsified data. We must also consider penalties for those states that deliberately communicate incorrect data or statistics. The enhancement of Eurostat and its expansion into an independent authority should therefore be considered in any event. This is not interfering with the budgetary sovereignty of the Member States at all, but rather is about having effective checks on data.
Liisa Jaakonsaari
(FI) Mr President, I think the Commission should be thanked for making such speedy headway with regard to these issues. Only a few months ago, for example, looking into a country's statistical data was felt to be an intrusion with regard to national sovereignty. At the time, it was considered to be virtually impossible and now we have obviously come a long way. It is excellent that Eurostat's powers are to be increased. Europe would have drifted into a sort of moral crisis, if people had, as it were, merely noticed out of the corner of their eye that the statistics were being distorted.
I agree with my colleague, Mrs Podimata, that people should now stop ridiculing Greece in this way. Greece should be respected for taking some very tough decisions. The people there should also have better access than before to statistical data and general information on the economy.
Olli Rehn
Member of the Commission. - Mr President, let me thank you for a very substantive debate and your support for this proposal to reinforce Eurostat's powers. I must say that I agree with Mrs Jaakonsaari that we have seen a sea change - a real cultural change - as regards the attitudes concerning economic policy coordination in Europe in recent months.
The adoption of this proposal is one of the cornerstones of our efforts to reinforce our economic and monetary union. There were several points made concerning Greece and Bulgaria, and I would like to clarify and respond to some of the issues that were discussed today. On Greece, I will not go into the whole long history of this saga. I agree with those who say that it is not fair to continue this 'Greece bashing', because Greece is now on track and its programme is being implemented effectively. Greece deserves credit and support, not 'bashing'. As regards the statistical reforms, we are working together with the Greek authorities. We have made numerous visits in the course of this winter and spring and have recently agreed on an action plan which aims at enhancing the capacity of the Greek statistical system and improving Greece's public finance statistics.
On Bulgaria, our concerns relate mostly to two aspects of the budgetary forecast. I trust that at least the Bulgarian Members of the European Parliament are listening to my clarifications concerning Bulgaria's excessive deficit procedure and statistical problems.
First, the Commission was only belatedly informed by Bulgaria about the sizeable revisions in the budgetary outlook, in violation of treaty obligations. Secondly, we lack information on why Bulgaria revised its planned budget for 2010 from a balanced budget to a deficit of 3.8% within just a few weeks, even though the macro-economic scenario remained unchanged or even improved. Consequently, the Commission is currently not in a position to undertake an assessment of the Bulgarian budgetary plans for this year.
The planned mission by Eurostat to Bulgaria foreseen for the second half of this year will not address the differences and questions concerning the 2010 outlook. This is not a statistical issue. Instead, Eurostat will focus on potential risks to past data on the excessive deficit procedure for the year 2009 relating to previously undeclared government contractual commitments.
I am very grateful for this attention to these important issues, which may have also some implications concerning Bulgaria's standing in the markets. According to the information obtained from the Bulgarian authorities, the conclusion of their internal budget audits will only be completed by mid-summer. The outcome of such audits will be used by Eurostat in the context of the planned EDP visit to Bulgaria. Depending on the speed of the adoption of the revised regulation, which grants stronger powers to Eurostat, Eurostat may draw on these powers, as necessary, in its work.
Ladies and gentlemen, once again, thank you for your attention and especially for your broad and strong support for our proposal, which is the very first legislative proposal of the second Barroso Commission. Indeed, its adoption is essential for the effective functioning of economic and monetary union.
President
Thank you, Commissioner, and thank you also for your generous comments about us; we did not listen to them carefully enough. I find it regrettable when a person is speaking in this House and there are demonstrations, such as rounds of applause, which have nothing to do with the subject matter and the speech being made during our debate.
The debate is closed.
The vote will take place on Wednesday, 16 June 2010.
Written statements (Rule 149)
Enikő Győri
in writing. - (HU) The European Parliament must take a stand on a very important issue in today's debate, namely, the direction the statistical information system currently operating under the authority of Eurostat should take in order to avoid situations similar to the Greek scandal in the future. Let me remind you that the fraud perpetrated by the Greek authorities had already come to light in 2004, and around the same time, the Socialist-led Hungarian Government's finances were shady as well. Despite this, the EU has still not taken any steps to reform the statistical information system. Although I believe that the Commission's plan to grant audit rights to Eurostat is a step in the right direction, I am convinced that we will have to do more, as the future of the common currency is now at stake. What do I think we should do next? In my opinion, in excessive deficit procedures, sanctions should not only be imposed on Member States repeatedly failing to comply with their obligation to meet the 3% Maastricht budget deficit criterion, but also on those who have provided false statistical data for years, misleading investors and the EU and jeopardising the stability of the euro area. I agree with the approach of making the officers of national statistical offices personally responsible for the quality of data provided to Eurostat. This is why I propose that, taking into account the work being done by the Council's working group under the direction of Herman Van Rompuy, we ask the Commission to work out a more stringent system of sanctions to replace the one currently in place.


9. Nutrition and health claims made on foods (vote)
- Report: Adriana Poli Bortone
- Before the vote:
Margot Wallström
Vice-President of the Commission. - Madam President, the Commission makes the following declaration. The Commission, sharing the views expressed by Parliament, acknowledges the urgent need to have a scientific evaluation of children's health claims already on the market. Therefore, it will give priority to the necessary procedure to allow for a rapid decision on claims referring to children's development and health and will also ask the European Food Safety Authority to give priority to processing the evaluation of such claims. Furthermore, the Commission confirms that, pending the establishment of nutrient profiles, the process of evaluating such claims can start without delay.


9. 2008 annual report on the CFSP (
Heidi Hautala
Mr President, this report deals with the common foreign and security policy in 2008. However, it does not mention what happened on 10 March 2008 when Tibetans raised a peaceful protest against the repression of their culture and religion. Today, we have a guest from Tibet, Mrs Namdrol Lhamo, a nun who was confined to Drapchi Prison for 12 years because she had taken part in a peaceful demonstration and then recorded songs in prison. We should pay tribute to her and to the other courageous Tibetans living under the occupation.
I met with the Dalai Lama quite recently, and we came to the conclusion that there is an urgent need for an independent international investigation into what happened in that uprising in Lhasa on and around 10 March 2008, because for as long as there is no such investigation, China will keep accusing the Tibetan Government in exile, and the Dalai Lama, of instigating that uprising and its violent aftermath.
According to the Tibetan administration in exile, at least 220 Tibetans died, many as a result of indiscriminate firing by the police, ill-treatment or torture in prisons. Many more are missing.
(Sustained applause)
Adrian Severin
on behalf of the S&D Group. - Mr President, we have an amendment here.
Normally, our group would vote against but, in order to let us vote in favour, we would like to delete the words: 'that entails an end to the Israeli blockade'.
This is because the Israeli blockade is too complex an issue, and I believe there is no clear link between the preceding lines and these words. If we can delete these words, I think we could be comfortable with the rest of the amendment, and we could vote in favour. It is a small change, but it would allow us to vote in favour.


1. Gender mainstreaming in EU external relations (
- Before the vote
Libor Rouček
rapporteur. - Mr President, the EU and its Member States have committed themselves to pursuing gender equality and women's empowerment as one of the key priorities of the international agenda.
Yet, closer inspection reveals that the practical implementation of gender mainstreaming in the EU's external policies is still weak. For instance, only eight of the 27 Member States have adopted national action plans on the implementation of UN Security Council Resolution 1325.
Furthermore, women are still seriously underrepresented in high-level posts in the Commission and the Council. In fact, there is not a single female EU special representative at the moment. For this reason, the report stresses that the EU needs to fully implement its commitments in this field. For instance, the Commission should speed up its work on an EU action plan on gender equality. I am convinced that this is key to strengthening the gender dimension in EU foreign policy.
Let me conclude by saying that women's rights are part of the broader concept of human and civic rights. Without addressing gender equality and promoting women's rights in the EU's foreign policy, that policy cannot be effective.
(Applause)


8. Pakistan (vote)
Joint motion for a resolution:
- Before the vote on paragraph 1:
Robert Evans
on behalf of the PSE Group. - Mr President, as Chairman of the Delegation for relations with the countries of South Asia, I led negotiations on this compromise text. I recognise that it is a sensitive issue and it is important that we all recognise the situation in Pakistan. I think the whole House will want to send a strong, unified message to General Musharraf.
In the spirit of compromise and, I hope, to win the support of the whole House, I would like to propose the following oral amendment. In recital A, we refer to President Musharraf 'suspending the Constitution and the rule of law and replacing them with martial law'. I would like to propose that we say that he has replaced them 'by the state of emergency, de facto martial law'. Then, in line with the suggestions made by other colleagues, in three other places, paragraphs 1, 10 and 11, we should replace 'martial law' with 'the state of emergency'. I hope that will command the full support of the House.
(The oral amendment was accepted)