COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Regulation of the European Parliament and of the Council on quarterly financial accounts for general government

2003/0095 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Regulation of the European Parliament and of the Council on quarterly financial accounts for general government

1. Background

Proposal submitted to the European Parliament and to the Council (COM(2003) 242 - 2003/0095 (COD)) : // 8 May 2002

Opinion of the European Parliament (first reading) : // 21 October 2003

Adoption of the common position by the Council : // 22 December 2003

2. Aim of the Commission proposal

The report of the Monetary Committee on statistical requirements in EMU, endorsed by the Ecofin Council of 18 January 1999, stressed the need - amongst others - to make available for various policy purposes quarterly accounts for the general government sector, as defined in ESA95. Two regulations were adopted in 2000 and 2002 as regards non-financial data.

The proposed Regulation deals with financial transactions, financial assets and liabilities. As a result, the intention of the Commission was to require Member States to be providing a full set of accounts at the horizon of June 2005.

The Regulation was then prepared according to the normal procedure, that is in close cooperation with experts from Member States. This Regulation has needed more time than the non-financial second Regulation (2002) because of certain specific requirements.

3. Comments on the common position

3.1. General

At first reading, the European Parliament approved the Commission's proposal subject to an amendment that, firstly, shifts the date for the first transmission from 30 June 2003 to 31 December 2003 and, secondly, introduces the possibility that the Commission may grant derogations, not exceeding two years, exclusively for the information on the counterpart sector, as defined in an Annex to the proposal.

3.2. Decisions on the European Parliament's amendment after first reading

The Commission has agreed to the amendment proposed by the Parliament, notably because the collection of information on the counterpart sector raises specific difficulties in some countries and may need rather significant adaptations. The Council has endorsed this amendment in substance, as regards the information on the counterpart sector, within its common position.

3.3. New provisions introduced by the Council and the Commission's position.

Seven new provisions have been incorporated (Article 6) into the Council's common position and are fully supported by the Commission:

- Shifting the date of the first transmission from 31 December 2003 to 30 June 2004.

The Commission recognises that the adoption of the proposal took more time than was expected and, therefore, this change is necessary.

- Changing the extent of derogations from 2 years to 18 months.

The Commission had indicated that the date of 31 December 2005 was absolutely imperative and is satisfied by this amendment.

- Adding a possibility of derogation (18 months) for the starting date of transmission of "some data" for the sub-sector central government (S.1311) and social security funds (S.1314) that shall be transmitted no later than 30 June 2004.

The Commission is aware that the national statistical systems require major adaptations on which work began late and in some cases has not yet begun, and that some of these adaptations have turned out to need more time than previously expected. However, as the Commission has been insisting for several years on the priority given to these sub-sectors (notably following the recommendations of the ECB), such additional derogations should cover only certain financial instruments (and most likely relating to transactions in financial assets and to financial assets).

- Adding a possibility of derogation (18 months) for the starting date of transmission of transactions in liabilities and liabilities for the sub-sector state government (S.1312) and the sub-sector local government (S.1313) that are to be transmitted no later than 30 June 2004.

The Commission is fully aware of the difficulties in some countries. The great number of local units and/or, in some cases, the need to change the legislation, are such that the adaptations require delays that were under-estimated by experts from Member States when preparing the Regulation.

- Adding a possibility of derogation (6 months) for the starting date of transmission of transactions in financial assets and financial liabilities for the sub-sector state government (S.1312) and the sub-sector local government (S.1313) that are to be transmitted no later than 30 June 2005.

The Commission agrees to examine, on a case-by-case basis, the requests for derogation that could stem from the need of "testing" the reporting system before any official transmission.

- Adding a possibility of derogation (6 months) for the starting date of transmission of data for the general government sector (S.13) to be transmitted no later than 30 June 2005.

This change is the logical consequence of the above-mentioned amendments.

- Adding a possibility of derogation (6 months) for the starting date of transmission of data for other accounts receivable/payable (F.7 and AF.7) for the general government sector (S.13) and its sub-sectors to be transmitted no later than 30 June 2005.

In the course of the discussion within the Expert Group in Council, the Commission was informed that some Member States might not have achieved full adaptation of the reporting system for these specific items. The Commission accepts this new provision as it is aware of some severe difficulties in the collection of these items, notably for local units.

4. Conclusion

The common position adds some flexibility to the requirements established in the Regulation but as such the common position still fully addresses the objectives of the Regulation proposed by the Commission. It respects specific national situations without a negative effect on the needs of users. The Commission will be open-minded to all requests for derogations, provided that the Member States can justify that the implementation of the effective adaptation of the national statistical systems has begun, as required by the usual rules for granting such derogations. Under these conditions and for the reasons set out above, the Commission hereby expresses a favourable opinion on the common position of the Council adopted unanimously.