^PIPPlppp^ps* 
COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 04.06.1998 
COM(1998) 323 final 
Proposal for a 
COUNCIL REGULATION (EC) 
amending Regulation (EC) No 1749/96 
concerning the coverage of goods and services of the 
Harmonized Index of Consumer Prices 
Proposal for a 
COUNCIL REGULATION (EC) 
amending Regulation (EC) No 1749/96 
concerning the geographic and population coverage 
of the Harmonized Index of Consumer Prices 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
Reference : Proposal for Council Regulation (EC) amending Regulation (EC) No 
1749/96 concerning the coverage of goods and services of the 
Harmonized Index of Consumer Prices 
1. On 7 March 1997 Eurostat published the first set of Harmonized Indices of Consumer 
Prices (HICPs) as required by Article 5 (1) (b) of Council Regulation 2494/95. The 
HICPs provide the best statistical basis for international comparisons of consumer price 
inflation and will be used in particular by the European Commission and the European 
Monetary Institute for the assessment of inflation convergence under Article 109 (j) of 
the Treaty establishing the European Community. They will subsequently form the 
basis of the Monetary Union Index of Consumer Prices (MUICP) to be used by, among 
others, the future European Central Bank for the monitoring of inflation in the 
Economic and Monetary Union. The requirement to produce HICPs in no way puts in 
question the right of Member States to publish their national, non-harmonised, inflation 
indices, which they may wish to use for national policy purposes. 
2. Under Council Regulation 2494/95, the Commission has so far adopted three detailed 
regulations establishing the specific implementing measures governing the production 
of the HICP. The first, Commission Regulation (EC) 1749/96 on initial implementing 
measures, covers six technical areas: initial coverage, newly significant goods and 
services, elementary aggregates, and minimum standards for quality adjustment, 
sampling and prices. The second, Commission Regulation (EC) No 2214/96, relates to 
the HICP and its sub-indices that are transmitted to and disseminated by Eurostat. The 
third, Commission Regulation (EC) No 2454/97, defines minimum standards for the 
quality of the weights used to construct the HICP. 
3. Article 3 of Commission Regulation (EC) 1749/96, defines the initial coverage of the 
HICPs from January 1997/Some difficult categories such as health and educational 
services, where there are major institutional differences between Member States, are 
not yet fully covered by the HICP. The draft regulation amends Commission 
Regulation (EC) 1749/96 with regard to coverage of goods and services and proposes a 
staged procedure on how to extend the coverage of the HICP in December 1998 and 
December 1999 (see also Annex la of the draft regulation). 
4. The concept "household final monetary consumption expenditure" in the proposed 
regulation defines both the goods and services to be covered by the HICP and the price 
concept to be used: prices net of reimbursements, subsidies, and discounts. The draft 
regulation follows the definitions laid down in the European System of Accounts (ES A 
1995) where they are appropriate for international comparisons of inflation (see also 
Annex lb of the draft regulation). 
5. "Household final monetary consumption expenditure" refers only to monetary 
transactions and, therefore, neither includes income in kind, as for example agricultural 
products grown for own consumption, nor services of owner occupied dwellings. In 
particular, the expenditure faced by owner occupiers when acquiring housing expressed 
as imputed rents 
e_ 
or mortgage interest payments are not regarded as part of the inflationary process and 
hence excluded from the HICPs. Imputed rents are the opportunity costs to owner 
occupiers of living in their houses rather than a reflection of actual prices faced by them as 
consumers. These and any other opportunity costs are not regarded as part of inflation 
Mortgage interest is simply the cost of credit, and credit payments should not normally be 
included in CPIs. The Statistical Programme Committee (SPC) discussed the treatment of 
owner occupied housing in the HICP on 13 March 1997. Many Member States were 
sympathetic to the idea that the prices faced by owner occupiers when acquiring housing 
should be covered by the HICP, but felt that it was premature to proceed with an index of 
net acquisition of new dwellings. A special Task Force will be set up in 1998 by Eurostat. 
Until a satisfactory solution for the services of owner occupied dwellings can be found, 
such expenditure is by definition excluded from "household final monetary consumption 
expenditure". 
The HICPs of the Member States currently cover more than 90% of "household final 
monetary consumption expenditure". The remaining 10% will be added by December 1999. 
6% refers to goods and services which according to the draft regulation would be added in 
two stages, in December 1998 and December 1999. The remaining 4% refers to the 
geographic and population coverage of the HICP. Consultation is proceeding in parallel on 
a draft regulation defining the geographic and population coverage. 
The HICP Working Party1 and its Task Forces have spent many hours in numerous 
meetings over two years discussing the coverage of the HICP. The proposal has obtained 
the agreement of almost all members of the HICP Working Party including the main users 
DG II and the EMI2, who have emphasised that the coverage of the HICP should be as 
broad as possible with respect to consumer price inflation. 
1 Group of experts 
2 However, the EMI has not been formally consulted 
3 
Proposal for 
COUNCIL REGULATION (EC) No [xx/98] 
of [date] 
amending Regulation (EC) No 1749/96 
concerning the coverage of goods and services of the 
Harmonized Index of Consumer Prices 
(Text with EEA relevance) 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) No 2494/95 of 23 October 1995 concerning 
harmonized indices of consumer prices1, and in particular Articles 4 and 5 (3) thereof, 
Having regard to the proposal from the Commission, 
After consulting the European Monetary Institute, 
Whereas, by virtue of Article 5 (1) (b) of Regulation (EC) No 2494/95, each Member State 
is required to produce a Harmonized Index of Consumer Prices (HICP) starting with the 
index for January 1997; the requirement to produce HICPs in no way puts in question the 
right of Member States to publish their national, non-harmonised, inflation indices, which 
they may wish to use for national policy purposes; 
Whereas Commission Regulation (EC) No 1749/962 set down an initial coverage for 
HICPs that was restricted to those goods and services covered by all or most national 
Consumer Price Indices (CPIs); whereas the prices to be taken for the HICP, in particular 
the treatment of subsidies, rebates and reimbursements, require harmonized definitions; 
whereas the geographic and population coverage of the HICPs need still to be specified; 
Whereas Article 3 of Regulation (EC) No 2494/95 requires that the HICP should be based 
on the prices of goods and services available for purchase in the economic territory of the 
Member State for the purposes of directly satisfying consumer needs; whereas prices not 
actually paid by consumers in such purchases or opportunity costs or interest payments are 
not appropriate for international comparisons of consumer price inflation; 
Whereas it is recognised that changes in reimbursements might not have an impact on 
measures of inflation in a broader context but they do form an essential part of the 
inflationary process affecting consumers and therefore need to be reflected in the HICP; 
1 OJ L 257, 27.10.1995, p. 1. . 
2 OJL 229, 10.9.1996, p. 3. \J 
Whereas the Statistical Programme Committee (SPC) has not delivered an opinion within the 
time limit laid down by the chairman; whereas in this case following the procedure laid down in 
Article 14 paragraph 2 of Regulation (EC) No 2494/95 the Commission shall, without delay, 
submit to the Council a proposal relating to the measures to be taken; 
HAS ADOPTED THIS REGULATION: 
Article 1 
Annex I of Regulation (EC) No 1749/96 is replaced by Annexes la and lb of the present 
Regulation. 
Article 2 
In the first indent of Article 1 of Regulation (EC) No 1749/96 the word "initial" is deleted. 
Article 3 
Sub-paragraph (a) of Article 2 of Regulation (EC) No 1749/96 is replaced by the following: 
" (al) The 'coverage' of the HICP is defined as those goods and services which are included in 
household final monetary consumption expenditure (see Article 3 (a2) below). It is 
classified according to the 4-digit categories and sub-categories given in Annex la to 
this regulation, which derive from the COICOP international classification and shall be 
known as COICOP/HICP (classification of individual consumption by purpose adapted 
totheneedsofHICPs). 
(a2) 'Household final monetary consumption expenditure' is defined as that part of final 
consumption expenditure3 which is incurred by households4 in monetary transactions5 
in one or both of the time periods being compared, and specified in Annex lb to this 
regulation. Unless otherwise stated, Annex lb follows the definitions laid down in the 
European System of Accounts (ESA) 19956. 'Household final monetary consumption 
expenditure' consists of expenditure incurred on goods and services that are used for the 
direct satisfaction of individual needs or wants either by: 
(a2a) resident7 households on the domestic territory or abroad, or 
(a2b) resident and non-resident households on the domestic territory, or 
(a2c) the population of households within the scope of the national household budget 
survey. 
(a3) Prices used in the HICP are the purchaser prices8 paid by households to purchase 
individual goods and services9 in monetary transactions. Where goods and services 
3 Annex lb No 4 to 27 
4 Annex lb No 1 
5 Annex lb No 3 
6 Council Regulation (EC) No 2223/96 of 25.6.1996, OJL 310, 13.11.1996 
7 Annex lb No 2 
8 Annex lb No 28 r 
have been available to consumers free of charge, and subsequently an actual price is 
charged, then the change from a zero price to the actual price, and vice-versa, should be 
taken into account in the HICP. 
(a4) The 'weights' of the HICP are the aggregate expenditure by households on any set of 
goods and services covered by the HICP expressed as proportion of the total 
expenditure on all goods and services covered. " 
Article 4 
Article 3 of Regulation (EC) No 1749/96 is replaced by the following: 
" Coverage 
1. HICPs compiled from price changes and weights for each category of household final 
monetary consumption expenditure given in Annex la accounting for more than one 
part in a thousand of the total expenditure covered by all those categories included as 
specified in Articled (2), shall be deemed comparable. 
2, The coverage of the HICP shall be extended, as follows: 
(a) Starting with the production of the HICP for January 1997, Member States shall 
process the data collected covering those categories marked as 'initial coverage' 
as specified in Annex la. 
(b) On but not before the production of the HICP for December 1998, Member 
States shall process the data collected covering also those categories marked as 
'December 1998' as specified in Annex la. 
(c) On but not before the production of the HICP for December 1999, Member 
States shall process the data collected covering also those categories marked as 
'December 1999' as specified in Annex la. " 
Article 5 
In Article 4 of Regulation (EC) No 1749/96 the words "Annex I" are replaced by the word 
"Annex la". 
Article 6 
This Regulation shall enter into force on the twentieth day following that of its publication in the 
Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable in all Member States. 
Done at Brussels, For the Council 
9 Annex lb No 29 
ANNEX Ta 
The coverage of the HICP shall include the following categories of COICOP/HICP: 
Code 
01. 
01.1 
01.1.1 
01.1.2 
01.1.3 
01.1.4 
01.1.5 
01.1.6 
01.1.7 
01.1.8 
01.1.9 
01.2 
01.2.1 
01.2.2 
02. 
02.1 
02.1.1 
02.1.2 
02.1.3 
02.2 
02.2.1 
02.3 
02.3.1 
03. 
03.1 
03.1.1 
03.1.2 
03.1.3 
03.1.4 
03.2 
03.2.1 
03.2.2 
04. 
04.1 
04.1.1 
04.1.2 
04.2 
04.2.1 
04.2.2 COICOP/HICP Heading 
FOOD AND NON-ALCOHOLIC BEVERAGES 
Food 
Bread and cereals 
Meat 
Fish 
Milk, cheese and eggs 
Oils and fats 
Fruit 
Vegetables including potatoes and other tubers 
Sugar, jam, honey, syrups, chocolate and confectionery 
Food products n.e.c. 
Non-alcoholic beverages 
Coffee, tea and cocoa 
Mineral waters, soft drinks and juices 
ALCOHOLIC BEVERAGES AND TOBACCO 
Alcoholic beverages 
Spirits 
Wine 
Beer 
Tobacco 
Tobacco 
Narcotics 
Narcotics 
CLOTHING AND FOOTWEAR 
Clothing 
Clothing materials 
Garments 
Other articles of clothing and clothing accessories 
Dry-cleaning, repair and hire of clothing 
Footwear 
Shoes and other footwear 
Repair and hire of footwear 
HOUSING, WATER, ELECTRICITY, GAS AND 
OTHER FUELS 
Actual rentals for housing 
Actual rentals paid by tenants 
Other actual rentals 
Imputed rentals for housing 
Imputed rentals of owner-occupiers 
Other imputed rentals Initial 
Coverage 
Jan. 1997 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
part^ 
partlu Addition 
December 
1998 
full11 
full11 Addition 
December 
1999 
• 
i 
: Excluded 
• 
lllllilllll 
iiiiiili excluded 
: 
excluded u 
excluded12 
10 Relates to the practice followed in the national CPI 
1 ' Refers to all rentals actually paid by tenants, i.e. the rentals the tenant pays to the landlord regardless of any 
social benefits the tenant receives from public authorities (including payments which at the tenant's discretion 
go directly to the landlord); see also Annex lb No 12b 
12 This does not prejudge the coverage of owner occupied housing in general 
^ —-Pag?T' 
Code 
04.3 
04.3.1 
04.3.2 
04.4 
04.4.1 
04.4.2 
04.4.3 
04.4.4 
04.5 
04.5.1 
04.5.2 
04.5.3 
04.5.4 
04.5.5 
05. ... 
05.1 
05.1.1 
05.1.2 
05.1.3 
05.2 
05.2.1 
05.3 
05.3.1 
05.3.2 
05.3.3 
05.4 
05.4.1 
05.5 
05.5.1 
05.5.2 
05.6 
05.6.1 
05.6.2 
06. 
06.1 
06.1.1 COICOP/HICP Heading 
Regular maintenance and repair of the dwelling 
Products for the regular maintenance and repair of the 
dwelling 
Services for the regular maintenance and repair of the 
dwelling 
Other services relating to the dwelling 
Refuse collection 
Sewerage services 
Water supply 
Other services relating to the dwelling n.e.c. 
Electricity, gas and other fuels 
Electricity 
Gas 
Liquid fuels 
Solid fuels 
Hot water, steam and ice 
FURNISHINGS, HOUSEHOLD EQUIPMENT AND 
ROUTINE MAINTENANCE OF THE HOUSE 
Furniture, furnishings and decorations, carpets and other 
floor coverings and repairs 
Furniture and furnishings 
Carpets and other floor coverings 
Repair of furniture, furnishings and floor coverings 
Household textiles 
Household textiles 
Heating and cooking appliances, refrigerators, washing 
machines and similar major household appliances, 
including fittings and repairs 
Major household appliances whether electric or not 
Small electric household appliances 
Repair of household appliances 
Glassware, tableware and household utensils 
Glassware, tableware and household utensils 
Tools and equipment for house and garden 
Major tools and equipment 
Small tools and miscellaneous accessories 
Goods and services for routine household maintenance 
Non-durable household goods 
Domestic services and home care services 
HEALTH 
Medical products, appliances and equipment 
Medical products, appliances and equipment Initial 
Coverage 
Jan. 1997 
full13 
full13 
part14 
part14 
part14 
full 
full 
full 
full 
full 
full 
s-
% 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
full 
part16 Addition 
December 
1998 
•e 
full1* 
full15 
full15 
' 
s 
' '/'• 
full17 Addition 
December 
1999 
si 
% _,%\; Excluded 
; ,, 
: 
' 
i 
, * * 1 
; 
t f. ' 
13 Refers to expenditure which tenants or owner-occupiers incur on materials and services for minor maintenance 
and repairs; following a decision on the treatment of owner occupied housing, the coverage of this categories 
might need to be extended to include expenditure for major decoration, maintenance and repair of the dwelling 
and for extensions and conversions of the dwelling not typically paid by tenants; see also Annex lb No 4 and 
15 
Refers to expenditure according to consumption 
Refers to separately identifiable charges for specific services relating to the dwelling whether or not consumers 
pay according to consumption that is, excluding payments for services financed out of general taxation; see 
also Annex lb No 9 and 29 
Refers to health goods outside the social security system 
Code 
06.2 
06.2.1 
06.2.2 
06.2.3 
06.3 
06.3.1 
07. 
07.1 
07.1.1A 
07. LIB 
07.1.2 
07.1.3 
07.2 
07.2.1 
07.2.2 
07.2.3 
07.2.4 -
07.3 
07.3.1 
07.3.2 
07.3.3 
07.3.4 
07.3.5 
07.3.6 
08. 
08.1 
08.1.1 
08.1.2 
08.1.3 
09. 
09.1 
09.1.1 
09.1.2 
09.1.3 
09.1.4 
09.1.5 COICOP/HICP Heading 
Out-patient services 
Medical services 
Dental services 
Paramedical services 
Hospital services 
Hospital services18 
TRANSPORT 
Purchase of vehicles 
New motor cars 
Second-hand motor cars 
Motor cycles 
Bicycles 
Operation of personal transport equipment 
Spares parts and accessories 
Fuels and lubricants 
Maintenance and repairs 
Other services in respect of personal transport equipment 
Transports services 
Passenger transport by railway 
Passenger transport by road 
Passenger transport by air 
Passenger transport by sea and inland waterway 
Other purchased transport services 
Combined tickets 
COMMUNICATIONS 
Communications 
Postal services 
Telephone and telefax equipment 
Telephone, telegraph and telefax services 
RECREATION AND CULTURE 
Audio-visual, photographic and data processing 
equipment and accessories, including repairs 
Equipment for the reception, recording and reproduction of 
sound and pictures 
Photographic and cinematographic equipment and optical 
instruments 
Data processing equipment 
Recording media for pictures and sound 
Repair of audio-visual, photographic and data processing and 
accessories Initial 
Coverage 
Jan. 1997 
full 
full 
full 
full 
full 
full 
full 
fulliy 
full 
full 
full 
full 
full 
fuU*u 
full 
full 
full 
full 
full 
full 
full 
full Addition 
December 
1998 
r 
full17 
full17 
full17 Addition 
December 
1999 
, Excluded 
; 
-
; i 
i 
j 
i 
: 
: 
\ 
' 
17 
18 
19 
20 Full coverage refers to that part of expenditure on health goods and services (other than hospital out-patient 
services) which is paid by the consumer and not reimbursed by government, social security or NPISHs; see 
Annex lb No 12a and the methodological details of inclusion as specified in accordance with the procedure 
laid down in Article 14 of Council Regulation (EC) No 2494/95 
The methodological details and the timetable of inclusion shall be specified in accordance with the procedure 
laid down in Article 14 of Council Regulation (EC) No 2494/95 
Includes driving licences, road worthiness tests, motor associations fees, tolls for bridges, tunnels, shuttle-
ferries, and motorways; excludes licences to own or use vehicles; see also Annex lb No 9, 18, and 19b 
Refers to tickets covering two or more modes of transport and the expenditure cannot be apportioned between 
them 
^ Page tT 
Code 
09.2 
09.2.1 
09.2.2 
09.3 
09.3.1 
09.3.2 
09.3.3 
09.4 
09.4.1 
09.4.2 
09.4.3 
09.5 
09.5.1 
09.5.2 
09.5.3 .. 
09.5.4 
09.6 
09.6.1 
10. 
10.1 
10.1.1 
10.1.2 
10.1.3 
10.1.4 
11. 
11.1 
11.1.1 
11.1.2 
11.2 
11.2.1 
12. 
12.1 
12.1.1 
12.1.2 
12.1.3 
12.2 
12.2.1 
12.2.2 COICOP/HICP Heading 
Other major durables for recreation and culture 
Other major durables for recreation and culture 
Repair of other major durables for recreation and culture 
Other recreational items and equipment; flowers, 
gardens and pets 
Games, toys and hobbies, equipment for sport, camping and 
open-air recreation 
Gardening 
Pets 
Recreational and cultural services 
Sporting and recreational services 
Cultural services 
Games of chance 
Newspapers, books and stationery 
Books 
Newspapers and periodicals 
Miscellaneous printed matter 
Stationery and drawing materials 
Package holidays 
Package holidays 
EDUCATION 
Educational services 
Pre-primary and primary education 
Secondary education 
Tertiary education 
Education not definable by level 
HOTELS, CAFES AND RESTAURANTS 
Catering 
Restaurants and cafes 
Canteens 
Accommodation services 
Accommodation services 
MISCELLANEOUS GOODS AND SERVICES 
Personal care 
Hairdressing salons and personal grooming establishments 
Appliances, articles and products for personal care 
Personal care services n.e.c. 
Personal effects n.e.c. 
Jewellery, clocks and watches 
Other personal effects Initial 
Coverage 
Jan. 1997 
full 
full 
full 
full 
full 
full21 
full22 
part23 
full 
full 
part23 
full 
part25 
full 
part23 
part23 
full 
full 
full 
full Addition 
December 
1998 
full24 
full24 
full24 
full24 
full24 
full24 
full24 
full24 Addition 
December 
1999 
• 
. Excluded 
excluded 
excluded 
21 
22 
2A Includes fees or subscriptions to sport clubs and fitness centres; it also includes payments for hunting and 
fishing licences if the government uses the issue of licences to organise some proper regulatory function; see 
also Annex lb No 9 and 19b 
Includes entrance fees to museums, fees for libraries, and licence fees and subscriptions to TV and radio; see 
also Annex lb No 9 and 10 
Includes educational goods and services only if they are fully paid by consumers 
Full coverage refers to that part of expenditure on educational goods and services which is paid by the 
consumer and not reimbursed by government, social security or NPISHs; see Annex lb No 12a and the 
methodological details of inclusion as specified in accordance with the procedure laid down in Article 14 of 
Council Regulation (EC) No 2494/95 
Refers to computer courses, language courses, typing courses, and other such courses which are fully paid by 
the consumer 
A^ "PaueT 
Code 
12.3 
12.3.1 
12.4 
12.4.1 
12.4.2 
12.4.3 
12.4.4 
12.4.5 
12.5 
12.5.1 
12.5.2 
12.6 
12.6.1 COICOP/HICP Heading 
Social protection 
Social protection services 
Insurance 
Life insurance 
Insurance connected with the dwelling 
Insurance connected with health 
Insurance connected with transport 
Other insurance 
Financial services n.e.c. 
Financial services n.e.c. 
FISIM 
Other services n.e.c. 
Other services n.e.c. Initial 
Coverage 
Jan. 1997 
part27 
part31 
part34 
full36 Addition 
December 
1998 
part26 
full2* Addition 
December 
1999 
fuuzy, 3U 
full32'30 
6,1133.30 
full35 Excluded 
excluded 
excluded 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 Refers to crèches, nurseries, play-schools and kindergartens which are not an obligatory part of the educational 
system; covered are only those expenditure which are paid by the consumer and not reimbursed by 
government, social security or NPISHs; see also Annex lb No 12a; other items within code 12.3.1 such as 
retirement homes, schools for the disabled, home cleaning services, and meal programmes are subject to the 
same arrangement as described in footnote 18 
Refers to service charges for contents-insurance 
Refers to all service charges paid by owner-occupiers and tenants for the kinds of insurance typically taken out 
by tenants against fire, theft, water damage, etc.; see also Annex lb No 7, 8 and 24; following a decision on the 
treatment of owner occupied housing, the coverage of this categories might need to be extended to include 
service charges paid by owner-occupiers for the kinds of insurance for the dwelling typically taken out by 
landlords 
Refers to service charges for private sickness and accident insurance; see also Annex lb No 7, 8 and 24 and the 
methodological details of inclusion of category "06. Health" as specified in accordance with the procedure laid 
down in Article 14 of Council Regulation (EC) No 2494/95 
The methodological details and the timetable of inclusion shall be specified in accordance with the procedure 
laid down in Article 14 of Council Regulation (EC) No 2494/95. The implementation may be scheduled for an 
earlier date 
Refers to service charges for insurances in respect of personal transport equipment 
Refers to service charges in respect of personal transport equipment, travel insurance and luggage insurance; 
see also Annex lb No 7, 8 and 24 
Refers to service charges for insurance such as civil liability for injury or damage to third parties or their 
property not arising from the operation of personal transport equipment; see also Annex lb No 7, 8 and 24 
Refers to banking service charges which are not expressed as proportion of the transaction value 
Refers to financial services including banking services; not covered are service charges for private or public 
pension funds, which are a kind of life insurance but restricted to specific groups of persons, as well as interest 
payments; see also Annex lb No 21 and 23 
Includes fees for the issue of passports, birth, marriage or death certificates, and dues for membership to 
professional associations if they can be considered as payments for the services rendered; see Annex lb No 9 
and 19 
•nn 
ANNEX Th 
A Definition of Household final monetary consumption expenditure 
1. The household sector includes individuals or groups of individuals (as defined in ES A 
2.76.a and 2.76.b) and may or may not include institutional households (as defined in 
ESA 2.76.b). 
2. A resident household has its centre of economic interest within the economic territory 
of the Member State, which may or may not include territorial or extraterritorial 
enclaves (as defined in ESA 2.04. to 2.07.). 
3. A monetary transaction is an economic flow that is an interaction between 
institutional units by mutual agreement, where the units involved make or receive 
payments, or incur liabilities or receive assets denominated in units of currency. By 
convention the collection of household refuse shall be considered as interaction by 
mutual agreement. Transactions that do not involve the exchange of cash, or assets or 
liabilities denominated in units of currency, are non-monetary transactions. Intra-unit 
transactions are normally non-monetary transactions. Non-monetary transactions 
involving more than one institutional unit occur among transactions in products (barter 
of products), distributive transactions (remuneration in kind, transfers in kind, etc.) and 
other transactions (barter of non-produced non-financial assets). 
Household final monetary consumption expenditure covers 
the following borderline cases: 
4. It covers items not treated as intermediate consumption, like materials for small repairs 
to and interior decoration of dwellings of a kind typically carried out by tenants as well 
as owners, and materials for repairs and maintenance to consumer durables, including 
vehicles. 
5. It covers items not treated as capital formation, in particular consumer durables, that 
continue to perform their function in several accounting periods; this includes the 
transfer of ownership of some durables from an enterprise to a household. 
6. It covers financial services directly charged. 
7. It covers non-life insurance services by the amount of the implicit service charge. 
8. It covers all expenditure financed out of non-life insurance claims, including payments 
made directly by the insurance companies to the garages, hospitals, doctors, etc. This 
implies that the full price paid by households or by insurance companies to the garages, 
hospitals, doctors, etc. is covered by the HICP. 
Non-life insurance claims are the amounts which insurance enterprises are obliged to 
pay in settlement of injuries or damage suffered by persons or goods. They are current 
transfers from the insurance companies to the receiving households and, therefore, enter 
into the households' disposable income. Any expenditure made as a result, for example 
payments to garages, hospitals, or doctors, is treated as being incurred by the 
households and not by the insurance companies. It is irrelevant whether the households 
actually make the expenditure before the claims are paid out, which then look like 
social security reimbursements, or whether the payments are made directly by the 
insurance companies to the garages, hospitals, etc. In the latter case, the companies are 
treated merely as agents acting on behalf of the households who are still treated as 
incurring the expenses. 
9. It covers payments by households for licences, permits, etc. which are regarded as 
purchases of services. If the government uses the issue of licences to organise some 
proper regulatory function, such as checking the competence or qualification of the 
person concerned, the payments made should be treated as a purchase of services from 
government and the prices taken in the HICP, but if the licences are being granted 
automatically on payment of the amounts due, payments should be treated as direct 
taxes and not prices. Driving or pilot's licences, television or radio licences, firearm 
licences, museum or library admissions, garbage disposal fees, etc. are treated in most 
cases as purchases of services rendered by government, whereas licences on the use of 
vehicles, boats or aircraft are treated in most cases as taxes. 
10. It covers the purchase of output at not economically significant prices, e.g. entrance 
fees for a museum. 
Household final monetary consumption expenditure does not cover 
the following borderline cases: 
11. It does not cover income in kind because it is no monetary transaction (although 
according to ES A 3.76.b it is included in final consumption expenditure). 
12. (a) It does not cover social transfers in kind received by households, including those 
parts of expenditure initially made by households for which they are subsequently 
reimbursed by social security, government units or NPISHs, e.g. for medical 
expenses or education. When a household purchases a good or service for which 
it is subsequently reimbursed in part or in whole, the household is treated merely 
as agents acting on behalf of a social security fund, government unit or NPISH. 
The amounts reimbursed to households are treated as social transfers in kind 
made by social security, government units or NPISHs. They are not recorded as 
cash transfers to households and do not form part of households' disposable 
incomes. This accounting treatment leads to the same result as when a social 
security fund purchases the goods and services from market producers and then 
re-sells them to households at low non-market prices. This implies that the price 
taken for the HICP is the amount paid by the household less the reimbursement. 
(b) All other rebates by public authorities, especially housing payments to tenants in 
order to reduce their rents (including payments which at the tenant's discretion go 
directly to the landlord), are considered as social benefits in cash and, therefore, 
enter into households' disposable income. This implies that the full price of the 
good or service before the rebate is covered by the HICP. 
13. It does not cover services of owner occupied dwellings, because these are no monetary 
transactions (although according to ES A 3.76.a it is included in final consumption 
expenditure). 
13 
14. It does not cover the purchase of dwellings, and items treated as acquisitions of a non-
produced assets, in particular the purchase of land. 
15. It does also not cover expenditure that an owner-occupier incurs on the decoration, 
maintenance and repair of the dwelling not typically carried out by tenants. 
16. It does not cover the expenditure on valuables. 
17. It does not cover expenditure by households owning un-incorporated enterprises when 
incurred for business purposes. 
18. It does not cover current taxes on income and wealth, which are all compulsory, 
unrequited payments, in cash or in kind, levied periodically by general government and 
by the rest of the world on the income and wealth of institutional units, and some 
periodic taxes which are assessed neither on the income nor the wealth. Other current 
taxes include all those payments by households for licences which are to be regarded as 
. taxes, such as licences to own or use vehicles, boats or aircraft, etc. 
19. (a) It does not cover subscriptions, contributions and dues paid by households to 
NPISHs, like trade unions, professional societies, consumers' associations, 
churches and social, cultural, recreational and sports clubs. 
(b) However, if a club, union, society or association can be considered as a market 
producer selling its services at an economically significant price, which usually is 
the case even though the legal status may be a non-profit organisation, then the 
subscriptions, contributions and dues paid by households are considered as 
payments for the services rendered - not as a transfer - and, thus, covered by the 
HICP. 
20. It does not cover voluntary transfers in cash or in kind by households to charities, relief 
and aid organisations. 
21. It does not cover payments of property income, including interest. Property income is 
the income receivable by the owner of a financial asset or a tangible non-produced asset 
in return for providing funds to, or putting the tangible non-produced asset at the 
disposal of, another institutional unit. Under the terms of the financial instrument 
agreed between them, interest is the amount that the debtor becomes liable to pay to the 
creditor over a given period of time without reducing the amount of principal 
outstanding. 
22. It does not cover compulsory or voluntary social contributions, such as employers' 
actual social contributions to social security funds, insurance enterprises or autonomous 
as well as non autonomous pension funds administering social insurance schemes to 
secure social benefits for their employees, or employees' social contributions payable 
to social security, private funded and unfunded schemes. 
23. It does not cover life insurance and pension funding services (although according to 
ES A 3.76.f and g such services are included in final consumption expenditure by the 
amount of the implicit service charge). 
/]^f —PagrïT 
24. It does not cover net non-life insurance premiums. These are premiums payable under 
policies taken out by institutional units. The policies taken out by individual households 
are those taken out on their own initiative and for their own benefit, independently of 
their employers or government and outside any social insurance scheme. Net non-life 
insurance premiums comprise both the actual premiums payable by policy holders to 
obtain insurance cover during the accounting period (premiums earned) and the 
premium supplements payable out of the property income attributed to insurance policy 
holders, after deducting the service charges of insurance enterprises arranging the 
insurance. (NB: This service charge is covered by the household final monetary 
consumption expenditure!). Net non-life insurance premiums are the amounts available 
to provide cover against various events or accidents resulting in damage to goods or 
property, or harm to persons as a result of natural or human causes, for example fires, 
floods, crashes, collisions, sinkings, theft, violence, accidents, sickness, or against 
financial losses resulting from events such as sickness, unemployment, accidents, etc. 
25. It does not cover current transfers between households, which consist of all current 
transfers in cash or in kind made, or received, by resident households to, or from, other 
..resident or non-resident households. 
26. It does not cover fines and penalties. They are imposed on institutional units by courts 
of law or quasi-judicial bodies and treated as compulsory current transfers. Also not 
covered are fines and penalties imposed by tax authorities for the evasion or late 
payment of taxes, which cannot usually be distinguished from the taxes themselves. 
27. It does not cover lotteries and gambling; neither the payment of the service charge to 
the unit organising the lottery or gambling, nor the residual current transfer that is paid 
out to the winners (although according to ES A 4.135 the service charge is included in 
final consumption expenditure). 
B Definition of Price 
28. At the time of purchase, the purchaser's price is the price for the products the 
purchaser actually pays; including any taxes less subsidies on the products; after 
deductions for discounts for bulk or off-peak-purchases from standard prices or 
charges; excluding interest or services charges added under credit arrangements; 
excluding any extra charges incurred as a result of failing to pay within the period 
stated at the time the purchases were made. 
29. Goods and services for individual consumption ('individual goods and services') are 
acquired by a household and used to satisfy the needs and wants of members of that 
household. Individual goods and services have the following characteristics: 
(a) It must be possible to observe and record the acquisition of the good or services 
by an individual household or member thereof and also the time at which it took 
place; 
(b) the household must have agreed to the provision of the good or service and take 
whatever action is necessary to make it possible, for example by attending a 
school or clinic; 
AS -Page 12' 
(c) the good or service must be such that its acquisition by one household or person, 
or possibly by a small, restricted group of persons, precludes its acquisition by 
other households or persons. 
All household final consumption expenditure is individual. By convention, all goods 
and services provided by NPISHs are treated as individual. 
By convention, all government final consumption expenditure on education, health, 
social security and welfare, sport and recreation, and culture should be treated as 
expenditure on individual consumption services except for expenditure on general 
administration, regulation, research, etc. In addition, expenditure on the provision of 
housing, the collection of household refuse, and the operation of transport system 
should also be treated as individual. The collective consumption expenditure is the 
remainder of the government final consumption expenditure. It consists in particular of 
management and regulation of society, the provision of security and defence, the 
maintenance of law and order, legislation and regulation, the maintenance of public 
health, the protection of the environment, research and development, and the 
infrastructure and economic development. 
'f £ Page 19* 
FINANCIAL STATEMENT 
1. Title of operation 
Council Regulation (EC) amending Regulation (EC) No 1749/96 concerning the 
coverage of goods and services of the Harmonized Index of Consumer Prices. 
2. Budget heading involved 
Article B5-604. 
3. -Legal basis 
Council Regulation (EC) No 2494/95. 
4. Description of operation 
4.1 General objective 
The aim of the Council Regulation is to expedite the programme of work leading 
to Harmonized Indices of Consumer Prices (HICPs) in line with the convergence 
criteria requirements of the Treaty establishing the European Community. Council 
Regulation (EC) No 2494/95 provides the framework for detailed Commission 
Regulations requiring Member States to produce HICPs following concepts 
methods and practices which have been proposed by the Working Party1 on CPI 
Harmonization and approved by the Statistical Programme Committee following 
the Regulatory Committee procedure. 
Commission Regulation (EC) No 1749/96 of 9 September 1996 gives measures on 
initial coverage, treatment of newly significant goods and services, minimum 
standards for procedures of quality adjustment, minimum standards for prices, 
price indices for elementary aggregates, and minimum standards for sampling. 
Commission Regulation (EC) No 2214/96 of 20 November 1996 defines the sub-
indices of the HICPs which are produced, transmitted and disseminated each 
month starting with the index for January 1997. 
Commission Regulation (EC) No 2454/97 of 10 December 1997 defines 
minimum standards for the quality of the weights used in the computation of the 
HICP. 
Group of experts 
Ol 
The Commission Decision of 9 September 1996 [ref. No C(96)2452] provides for 
the funding of part of the additional costs to Member States. 
This draft Council Regulation amends Regulation (EC) No 1749/96 with regard to 
the coverage of goods and services. It proposes a staged procedure for extending 
the coverage of the HICP to include difficult categories such as health and 
educational services, where there are major institutional differences between 
Member States. 
In parallel consultation is proceeding on a draft Council Regulation amending 
Regulation (EC) No 1749/96 with respect to the geographic and population 
coverage of the Harmonized Index of Consumer Prices. 
4.2 Period covered and arrangements for renewal 
The Council Regulation requires an implementation in stages of progressive 
harmonization. The first, in February 1996, involved minimal resources and was 
based almost entirely on existing Consumer Price Indices (CPIs). The second, in 
January 1997, involved substantial resources. The third and fourth, in December 
1998 and 1999, will also involve substantial resources. 
5. Classification of expenditure or revenue 
DNO : CD. 
6. Type of expenditure or revenue 
Subvention cofinancing (66.6%) with national administrations; 
Administrative expenditure - see paragraph 10. 
7. Financial impact 
7.1 Method of calculating the total cost of the action 
The proposed extensions to the coverage of the HICP are necessary to achieve 
comparability. However, they will involve significant additional resources in 
Member States, and in accordance with Article 13 of Council Regulation (EC) No. 
2494/95 the Commission (Eurostat) will bear two-thirds of these additional costs 
until the end of the second year of implementation of the measures. It is estimated 
that costs will not exceed 4,5 million Ecu up to 1998 for the implementation of the 
measures required by the Council Regulation (EC) No. 2494/95 of which the costs 
of this fourth regulation will not exceed 0,5 million Ecu during the above period. 
The costs to the Commission of this fourth Regulation will therefore not exceed 
2/3 of 0,5 million Ecu. Some Member States are better equipped to handle the 
necessary system changes than others. 
1*6 
7.2 Breakdown of the cost of the action 
Member States will produce a breakdown of the costs of their action as part of the 
process of agreeing contracts. 
8. Fraud prevention measures 
Contractual arrangements with Member States will be set in place to ensure appropriate 
actions are undertaken and properly accounted for. 
9. Elements of cost-effectiveness analysis 
9.1 Specific and quantified objectives; target population 
Specific objectives: 
Improved and comparable indices of consumer prices. 
Target population: 
Users of price indices in Member States will benefit from improved measures as 
will decisions by the EMI and the Commission as regards both Monetary Union 
and other macro-economic developments. 
9.2 Grounds for the operation 
The Council Regulation should lead to improved reliability and international 
comparability of the CPIs of Member States. It should lead too to a sharing of 
expertise and technological applications on CPI compilation between Member 
States. 
Main factor of uncertainty: 
The Council Regulation provides only a framework within which many technical 
details must be resolved in collaboration with Member States. 
9.3 Monitoring and evaluation of the operation 
The implementing measures provide for extensive monitoring and the 
development of appropriate performance indicators by means of questionnaires 
and Eurostat audit missions (see below for costs). 
The Council Regulation provides for a review by November 1997 and again by 
November 1999. The 1997 review has already been sent to the Secretariat General 
of the Commission for submission to the Council of Ministers. 
10. Administrative expenditure (Section III, Part A of the budget) 
4<3 
Actual mobilisation of the necessary administrative resources will depend on the 
Commission's annual decision on the allocation of resources, taking into account the 
number of staff and additional amounts authorised by the budgetary authority. 
10.1 Effect on the number of posts 
Type of post 
Officials or 
temporary 
staff A 
B 
C 
Other resources 
(experts) 
A-7000 
Total Staff to be assigned to managing 
the operation 
Permanent 
posts 
VA 
2 
1 
2 
VA Temporary 
posts Source 
Existing 
resources in 
the DG or 
department 
concerned 
VA 
2 
1 
1 
VA Additional 
resources Duration 
3 years 
The annual cost of existing resources is: 
Officials (titles Al, A2, A4, A5) 
Experts (A-1178) = 682.500 Ecu x 3 years 
= 98.000 Ecu x 3 years 
Total = 2.047.500 
= 294.000 
= 2.341.500 
10.2 Overall financial impact of additional human resources 
none 
10.3 Increase in other administrative expenditure as a result of the operation 
Ecu 
Budget heading Amounts Method of calculation 
A - 7031 Working groups of the 96.000 4 meetings at 8 K Ecu covering 
Statistical Programme delegates expenses (x 3 years) 
Committee 
The costs of the audit missions to ten Member States per year - three days at 120 Ecu 
per day + fares - is estimated at 31.800 Ecu: 
A-701 31.800 Ecu x 3 years = 95.400 
STATEMENT OF IMPACT OF THE PROPOSAL ON 
INDUSTRY AND IN PARTICULAR ON SMALL AND 
MEDIUM ENTERPRISES 
Title of proposal: 
Proposal for Council Regulation (EC) amending Regulation (EC) No 1749/96 concerning the 
coverage of goods and services of the Harmonized Index of Consumer Prices 
The proposal: 
1. Taking account of the principle of subsidiarity why is Community legislation 
necessary in this area and what are the main aims? 
The aim is to expedite a programme of work leading to Harmonized Indices of Consumer 
Prices (HICPs) in line with the convergence criteria requirements of the Treaty 
establishing the European Community. HICPs are designed for international comparisons 
of consumer price inflation. They will be used in particular by the European Commission 
and the European Monetary Institute for the assessment of inflation convergence under 
Article 109 (j) of the Treaty establishing the European Community. HICPs will 
subsequently form the basis of the Monetary Union Index of Consumer Prices (MUICP) 
to be used by, among others, the future European Central Bank for the monitoring of 
inflation in the Economic and Monetary Union. 
Council Regulation (EC) No 2494/95 provides the framework for detailed Commission 
Regulations requiring Member States to produce HICPs following concepts methods and 
practices which have been proposed by the Working Party1 on CPI Harmonization and 
approved by the Statistical Programme Committee following the Regulatory Committee 
procedure. In accordance with Article 5 (3) of the Council Regulation, implementing 
measures are necessary for ensuring comparability of HICPs and for maintaining and 
improving their reliability. So far the Commission has adopted three detailed regulations 
establishing specific statistical standards governing the production of the HICP. The first, 
Commission Regulation (EC) 1749/96 on initial implementing measures, covers six 
technical areas: initial coverage, newly significant goods and services, elementary 
aggregates, and minimum standards for quality adjustment, sampling and prices. The 
second, Commission Regulation (EC) No 2214/96, relates to the HICP and its sub-indices 
that will be transmitted to and disseminated by Eurostat. The third, Commission 
Regulation (EC) No 2454/97, defines minimum standards for the quality of the weights 
used to construct the HICP. 
On 7 March 1997 Eurostat published the first set of Harmonized Indices of Consumer 
Prices (HICPs) as required by Article 5 (1) (b) of Council Regulation 2494/95. The 
HICPs provide the best statistical basis for international comparisons of consumer price 
inflation and very considerable progress has been made in harmonizing methodologies. 
Group of experts 
£-1 
However, more work remains to be done to achieve further harmonization of consumer 
price indices. 
Article 3 of Commission Regulation (EC) 1749/96 defines the initial coverage of the 
HICPs from January 1997. Some difficult categories such as health and educational 
services, where there are major institutional differences between Member States, are not 
fully covered by the HICP. The proposed regulation amends Commission Regulation 
(EC) 1749/96 with regard to coverage. The concept "household final monetary 
consumption expenditure" in the draft regulation defines both the goods and services to 
be covered by the HICP and the prices used in the HICP, which should be taken net of 
reimbursements, subsidies, and discounts. The draft regulation follows the definitions laid 
down in the European System of Accounts (ESA 1995) where they are appropriate for 
international comparisons of inflation. It defines that the coverage of the HICP shall be 
completed in two stages, in December 1998 and December 1999, as follows: 
a) Rents: By December 1998 the treatment of subsidised rents will be harmonized. 
b) Services connected with the dwelling: By December 1998 the coverage of refuse 
collection, sewerage services and water supply, unless they are financed out of 
-general taxation, will be extended. 
c) Financial services: By December 1999 the HICP will cover the remaining financial 
services, e.g. charges for tax consultancy or investment advice. 
d) Education: By December 1998 the HICP will cover all educational goods and 
services in a harmonized way. Education will be covered on a net basis, i.e. the 
weight and the prices will refer to the amounts actually paid by consumers net of 
reimbursements by government. This applies to school books and other materials, 
school meals, and to educational services provided by all types of schools and 
universities. To solve some of the methodological details, including the treatment of 
income dependent prices, a special Task Force has been set up by Eurostat. 
e) Health: By December 1998 the HICP will cover all health goods and services (apart 
from hospital services) in a harmonized way. Health will be covered on a net basis, 
i.e. the weight and the prices will refer to the amount actually paid by consumers net 
of reimbursements by social security. The Task Force will look at the methodological 
details of implementation. The methodology for the inclusion of hospital services 
will be settled no later than December 1998. The category will be included as soon as 
possible thereafter. 
f) Insurance: By December 1998 the HICP will cover all insurances connected with the 
dwelling, not only contents insurance. By December 1999 at the latest the HICP will 
also cover private health, civil liability, and travel insurance. The methodology will 
be settled by another special Task Force set up by Eurostat. If the Task Force finds an 
early solution, the implementation could be scheduled for an earlier date. 
g) Social protection services: By December 1998 the HICP will cover the services 
provided by crèches, nurseries, play-schools and kindergartens in a harmonized way. 
They will be covered on a net basis, i.e. the weight and the prices refer to the amount 
actually paid by the consumer net of reimbursements by government. Other social 
protection services, especially retirement homes, give rise to similar implementation 
problems as hospital services. However, since those services are of growing 
importance they should be covered by the HICP. The methodology for the inclusion 
of, for example, retirement homes will be settled no later than December 1998. The 
category will be included as soon as possible thereafter. 
2Z 
Taking into account the current state of the technical discussions, the following goods and 
services will not be covered by the HICP at least until the year 2000: narcotics, imputed 
rentals of owner occupiers, other imputed rentals, games of chance, certain personal care 
services, life insurance and financial intermediation services indirectly measured. 
The impact on business: 
2. Who will be affected by the proposal? 
• which sector of business 
Consumer price indices are compiled using prices and weights. The weights are mainly 
derived from already existing information. The prices are collected from all businesses 
providing goods and services for the direct satisfaction of consumer needs within the scope of 
household final monetary consumption expenditure, hereafter referred to as "retailers". 
According to the principle of subsidiarity, the sample of retailers is defined by the National 
Statistical Institutes. They already send price collectors to retailers to collect the prices for 
calculating their national consumer price indices (CPIs). The HICPs are mainly based on that 
information. However, the proposed regulation might involve new data collection in some 
Member States. The goods and services that will be added to the HICP are to a large extent 
provided by the government sector. 
• which size of business? (what is the concentration of small and medium sized 
firms?) 
The size of the business is only relevant to the extent that the prices collected should correctly 
reflect the price development of all businesses within the concept of household monetary 
consumption expenditure. In principle, all sizes of retailers are concerned. According to the 
principle of subsidiarity, the sample of retailers is defined by the National Statistical 
Institutes. 
• are there any particular geographic areas of the EU where these businesses are 
found? 
The geographic area is only relevant to the extent that the prices collected should correctly 
reflect the price development of the whole economic territory of the Member States within the 
concept of household monetary consumption expenditure. All Member States of the European 
Union, Norway and Iceland are concerned. 
3. What will businesses have to do to comply with the proposal? 
National Statistical Institutes send out price collectors to retailers. To comply with the 
proposed regulation the retailers need to give price collectors access to their premises and 
permission to collect the prices. In practice, the participation in such surveys is on a voluntary 
basis. 
4. What economic effect is the proposal likely to have? 
• on employment? 
• on investment and the creation of new businesses? 
2 3 
• on the competitive position of businesses? 
An indirect effect, in so far as the HICPs allow international comparisons of consumer price 
inflation, and provide the statistical basis for the assessment of inflation convergence under 
Article 109 (j) of the Treaty establishing the European Community. In Stage III of EMU, the 
HICPs will be used to compile the Monetary Union Index of consumer prices (MUICP), 
which will be the indicator for monetary policy of the future European Central Bank. A single 
and stable currency is an important step to advance European integration and to promote 
economic progress with important impact on employment, investment and competition. 
5. Does the proposal take account of the specific situation of small and medium-sized 
firms (reduced or different requirements etc.)? 
According to the principle of subsidiarity, the sample of retailers is defined by the National 
Statistical Institutes. They already send price collectors to retailers to collect the prices for 
calculating their national consumer price indices (CPIs). The HICPs are mainly based on that 
information. The goods and services that will be added to the HICP are to a large extent 
provided by the government sector. In general, the participation in such surveys is on a 
voluntary basis. However, the proposed regulation might involve new data collection in some 
Member States. 
Consultation: 
6. List the organisations which have been consulted about the proposal and outline 
their main views. 
The European Advisory Committee on Statistical Information in the Economic and Social 
Spheres (CEIES)2, DG II of the Commission, the European Monetary Institute, and Central 
banks of Member States are participating actively in the meetings of the Working Party3 on 
CPI Harmonization and its Task Forces. They emphasised that the HICP should have as broad 
a coverage as possible and are, therefore, in favour of the proposed regulation. 
established by Council Decision 91/116/EEC; the Committee is made up of representatives from the 
scientific, economic and social fields covering producers and users of statistical information 
Group of experts 
£v 
COMPLEMENTARY STATEMENT CONCERNING EFTA 
COUNTRIES 
Title : Proposal for Council Regulation (EC) amending Regulation (EC) No 1749/96 
concerning the coverage of goods and services of the Harmonized Index of 
Consumer Prices 
Impact on EFTA countries 
EFTA countries have been involved in discussions of the Statistical Programme Committee 
and the Working Party on the Harmonization of Consumer Price Indices. They are fully 
aware of the proposals for a Regulation and their views have been taken into account in 
preparing the draft. They intend to compile Harmonized Indices of Consumer Prices 
(HICPs) in accordance with this Regulation. 
2s-
EXPLANATORY MEMORANDUM 
Reference : Proposal for Council Regulation (EC) amending Regulation (EC) No 
1749/96 concerning the geographic and population coverage of the 
Harmonized Index of Consumer Prices 
1. On 7 March 1997 Eurostat published the first set of Harmonized Indices of Consumer 
Prices (HICPs) as required by Article 5 (1) (b) of Council Regulation 2494/95. The 
HICPs provide the best statistical basis for international comparisons of consumer price 
inflation and will be used in particular by the European Commission and the European 
Monetary Institute for the assessment of inflation convergence under Article 109 (j) of the 
Treaty establishing the European Community. They will subsequently form the basis of 
the Monetary Union Index of Consumer Prices (MUICP) to be used by, among others, the 
future European Central Bank for the monitoring of inflation in the Economic and 
Monetary Union. The requirement to produce HICPs in no way puts in question the right 
of Member States to publish their national, non-harmonised, inflation indices, which they 
may wish to use for national policy purposes. 
2. Under Council Regulation 2494/95, the Commission has so far adopted three detailed 
regulations establishing the specific implementing measures governing the production of 
the HICP. The first, Commission Regulation (EC) 1749/96 on initial implementing 
measures, covers six technical areas: initial coverage, newly significant goods and 
services, elementary aggregates, and minimum standards for quality adjustment, sampling 
and prices. The second, Commission Regulation (EC) No 2214/96, relates to the HICP 
and its sub-indices that are transmitted to and disseminated by Eurostat. The third, 
Commission Regulation (EC) No 2454/97, defines minimum standards for the quality of 
the weights used to construct the HICP. 
3. Article 3 of Council Regulation (EC) No 2494/95 requires that the HICP shall be based 
on the prices of goods and services available for purchase on the economic territory of the 
Member State for the purposes of directly satisfying consumer needs. However a 
harmonized definition of the geographic and population coverage of the HICP is still 
needed and the draft regulation seeks to provide this. It specifies that the coverage, for the 
calculation of HICP weights, should include all household final monetary consumption 
expenditure which takes place on the economic territory of that Member State. In 
particular the coverage should include expenditure by foreign visitors (the "domestic 
concept") and individuals living in institutions, and exclude the expenditure of residents 
whilst in a foreign country. All private households should also be included irrespective of 
the area in which they live or their position in the income distribution. Expenditure 
incurred for business purposes should be excluded. 
4. A harmonized definition of the geographic and population coverage of the HICP is 
required for the purpose of achieving comparability and also to avoid gaps or double 
counting when aggregating the HICPs of Member States to calculate the European index 
of consumer prices (EICP) and the Monetary Union index of consumer prices (MUICP) 
which will be main indicator for monitoring the success of the price stability policy of the 
future European Central Bank (ECB). 
ZC 
5. The reasons for requiring the domestic concept to be used are as follows. The purpose of 
the HICP is to provide the measure for the price stability criterion and to serve as the basis 
for the future MUICP. The objective is to measure the price changes within each of the 
territories of the individual Member States rather than the price changes affecting selected 
households, such as resident households. The price changes which need to be measured 
within the territory of a Member State include those affecting foreign visitors and exclude 
those affecting residents whilst in a foreign country. Therefore, for the purpose of 
measuring convergence, the domestic concept should be used. Additionally, for the 
purpose of stage III of EMU, the European Central Bank (ECB) will have to focus on the 
MUICP. The objective of the ECB is to maintain price stability in the Euro area, and the 
MUICP will be the main indicator for monitoring the success of the stability policy. 
Therefore it is necessary to have a coinciding definition of the Euro area and the area to 
which the MUICP relates. This property is fulfilled by the domestic concept. 
6. The expenditure of people living in institutional households, for example in retirement 
homes, should be included for the following reason. The coverage of the HICP is defined 
as those goods and services which are included in household final monetary consumption 
expenditure. The household sector includes people living in institutions and therefore their 
expenditure should be included in the weights of the HICP. As a result of the demographic 
changes in the EU the expenditure of people living in institutional households, especially in 
retirement homes, is of increasing importance and should therefore not be neglected in a 
measure of consumer price inflation. 
7. The draft regulation only requires extensions to the coverage where non-comparability 
would exist if the extension did not occur. It defines the complete set of households which 
the HICP should cover. In effect this is all households: rich and poor; rural and urban, 
resident or non-resident; private and institutional households. However the draft regulation 
allows a portion of these households to be excluded from a sub-index if the expenditure of 
that portion on items in that particular sub-index is not significant. In this context "not 
significant" is defined as less than one part per thousand of the total expenditure covered 
by the HICP. The portion of households which may be excluded can be made up of any 
type of households, for example institutional households and foreign visitors together, or 
foreign visitors alone. 
8 The HICPs of the Member States currently cover more than 90% of "household final 
monetary consumption expenditure". The remaining 10% will be added by December 1999. 
4% refers to the geographic and population coverage of the HICP. The remaining 6% 
refers to goods and services to be added in December 1998 and December 1999. 
Consultation is proceeding in parallel on a draft regulation defining a stepwise procedure 
on how and when to include the additional goods and services. 
9. The HICP Working Party1 and its Task Forces have spent many hours in numerous 
meetings over two years discussing the geographic and population coverage of the HICP. 
The proposal has obtained the agreement of almost all members of the HICP Working 
Party including the main users, DG II and the EMI2. They emphasised that a harmonized 
definition of the geographic and population coverage of the HICP was required for the 
purpose of achieving comparability and essential for assuring that the there would be no 
1 Group of experts 
2 However, the EMI has not been formally consulted 
ZP[ 
gaps or double counting in the coverage of the Monetary Union index of consumer prices 
(MUICP) which needs to be calculated from January 1999 as the main indicator for 
monitoring the price stability policy of the ECB. 
Z % 
Proposai for 
COUNCIL REGULATION (EC) No [xx/98] 
of [date] 
amending Regulation (EC) No 1749/96 
concerning the geographic and population coverage 
of the Harmonized Index of Consumer Prices 
(Text with EEA relevance) 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) No 2494/95, of 23 October 1995 concerning 
harmonized indices of consumer prices1, and in particular Articles 4 and 5(3) thereof, 
Having regard to the proposal from the Commission, 
After consulting the European Monetary Institute, 
Whereas, by virtue of Article 5 (1) (b) of Regulation (EC) No 2494/95, each Member State is 
required to produce a Harmonized Index of Consumer Prices (HICP) starting with the index 
for January 1997; the requirement to produce HICPs in no way puts in question the right of 
Member States to publish their national, non-harmonised, inflation indices, which they may 
wish to use for national policy purposes; 
Whereas Commission Regulation (EC) No 1749/962 set down the initial coverage for HICPs 
that was restricted to those goods and services covered by all or most national Consumer 
Prices Indices (CPIs); 
Whereas Council Regulation (EC) No [xx/98] amending Commission Regulation (EC) No 
1749/963 defined the coverage of the HICP as those goods and services which are included 
in household final monetary consumption expenditure; 
Whereas Article 3 of Regulation (EC) No 2494/95 requires that the HICP should be based on 
the prices of goods and services available for purchase in the economic territory of the 
Member State for the purposes of directly satisfying consumer needs; whereas the weights of 
the HICP require a harmonized definition of their geographic and population coverage; 
Whereas the compilation of the Monetary Union index of consumer prices (MUICP) and the 
European index of consumer prices (EICP) requires a harmonized geographic concept for the 
HICPs; 
OJ No L 257 of 27.10.1995, p. 1 
OJL229, 10.9.1996, p.3. 
OJ L xxx, [date], p.x. 
Whereas the Statistical Programme Committee (SPC) has not delivered an opinion within the 
time limit laid down by the chairman; whereas in this case following the procedure laid down in 
Article 14 paragraph 2 of Regulation (EC) No 2494/95 the Commission shall, without delay, 
submit to the Council a proposal relating to the measures to be taken; 
HAS ADOPTED THIS REGULATION: 
Article 1 
Sub-paragraph (a2) of Article 2 of Regulation (EC) No 1749/96 is replaced by the following: 
" 'Household final monetary consumption expenditure' is defined as that part of final consumption 
expenditure4 which is incurred: 
- by households5 irrespective of nationality or residence status; and 
- in monetary transactions6; and 
- on the economic territory7 of the Member State; and 
- on goods and services that are used for the direct satisfaction of individual needs or 
wants; and 
- in one or both of the time periods being compared. 
Household final monetary consumption expenditure is specified in Annex lb of the present 
Regulation and follows the definitions laid down in the European System of Accounts (ESA) 
19958." 
Article 2 
In Article 3 of Regulation (EC) No 1749/96 the following third paragraph is added: 
"3. HICPs compiled using sub-index9 weights which reflect final monetary consumption 
expenditure of a sub-set of households10, rather than of all households, shall be deemed 
comparable, where this difference in practice accounts for less than one part in a thousand of the 
total expenditure covered by the HICP. Any amendments of the weights necessary to secure 
comparability as defined in this paragraph shall be implemented by December 1998 at the latest." 
Article 3 
In Annex lb of Regulation (EC) No 1749/96 paragraphs 1 and 2 are replaced by the following: 
"1. The household sector consists of households which include all individuals or groups of 
individuals (as defined in ESA 2.76.a and 2.76.b) irrespective of, in particular, the type of area in 
which they live, their position in the income distribution and their nationality or residence status. 
4 Annex lb No 4 to 27 
- Annex lb No 1 
6 Annex lb No 3 
7 Annex lb No 2 
8 Council Regulation (EC) No 2223/96 of 25.6.1996, OJ L 310, 13.11.1996 
9 Article 2 of Commission Regulation (EC) No 2214/96 of 20.11.1996, OJ L 296, 21.11.1996, p. 8. 
Annex lb No 1 10 
So Paec2 
It includes individuals living in institutional households (as defined in ESA 2.76b). It does not 
include businesses. 
2. The economic territory is as defined in ESA 2.05 except that the extraterritorial enclaves 
situated within the boundaries of the country are included and the territorial enclaves situated in 
the rest of the world are excluded." 
Article 4 
This Regulation shall enter into force on the twentieth day following that of its publication in the 
Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable in all Member States. 
Done at Brussels, For the Council 
3^ -Page* 
FINANCIAL STATEMENT 
1. Title of operation 
Council Regulation (EC) amending Regulation (EC) No 1749/96 concerning the 
geographic and population coverage of the Harmonized Index of Consumer Prices. 
2. Budget heading involved 
Article B5-604. 
3. Legal basis 
Council Regulation (EC) No 2494/95. 
4. Description of operation 
4.1 General objective 
The aim of the Council Regulation is to expedite the programme of work leading 
to Harmonized Indices of Consumer Prices (HICPs) in line with the convergence 
criteria requirements of the Treaty establishing the European Community. Council 
Regulation (EC) No 2494/95 provides the framework for detailed Commission 
Regulations requiring Member States to produce HICPs following concepts 
methods and practices which have been proposed by the Working Party1 on CPI 
Harmonization and approved by the Statistical Programme Committee following 
the Regulatory Committee procedure. 
Commission Regulation (EC) No 1749/96 of 9 September 1996 gives measures on 
initial coverage, treatment of newly significant goods and services, minimum 
standards for procedures of quality adjustment, minimum standards for prices, 
price indices for elementary aggregates, and minimum standards for sampling. 
Commission Regulation (EC) No 2214/96 of 20 November 1996 defines the sub-
indices of the HICPs which are produced, transmitted and disseminated each 
month starting with the index for January 1997. 
Commission Regulation (EC) No 2454/97 of 10 December 1997 defines minimum 
standards for the quality of the weights used in the computation of the HICP. 
The Commission Decision of 9 September 1996 [ref. No C(96)2452] provides for 
the funding of part of the additional costs to Member States. 
Group of experts 
3 cf 
This draft Council Regulation amends Regulation (EC) No 1749/96 with respect to 
the geographic and population coverage of the Harmonized Index of Consumer 
Prices. It proposes a coinciding definition of the Euro area and the area to which 
the Monetary Union index of consumer prices (MUICP) relates, which will be used 
by, among others, the future European Central Bank for the monitoring of inflation 
in the Economic and Monetary Union from January 1999. 
In parallel consultation is proceeding on a draft Council Regulation amending 
Regulation (EC) No 1749/96 with respect to coverage of goods and services of the 
Harmonized Index of Consumer Prices. 
4.2 Period covered and arrangements for renewal 
The Council Regulation requires an implementation in stages of progressive 
harmonization. The first, in February 1996, involved minimal resources and was 
based almost entirely on existing Consumer Price Indices (CPIs). The second, in 
January 1997, involved substantial resources. The third and fourth, in December 
1998 and 1999, will also involve substantial resources. 
5. Classification of expenditure or revenue 
DNO : CD. 
6. Type of expenditure or revenue 
Subvention cofinancing (66.6%) with national administrations; 
Administrative expenditure - see paragraph 10. 
7. Financial impact 
7.1 Method of calculating the total cost of the action 
The draft regulation is necessary to achieve comparable measures of inflation, 
and essential for a coinciding definition of the Euro area and the area to which 
the Monetary Union index of consumer prices (MUICP) relates, which will be 
used by, among others, the future European Central Bank for the monitoring of 
inflation in the Economic and Monetary Union from January 1999. However, it 
will involve additional resources in Member States, and in accordance with Article 
13 of Council Regulation (EC) No 2494/95 the Commission (Eurostat) is expected 
to bear two-thirds of these additional costs until the end of the second year of 
implementation of the measures. It is estimated that costs will not exceed 900.000 
Ecu for the implementation of this draft Council Regulation. The costs to the 
Commission of this regulation will therefore not exceed 600.000 Ecu. Some 
Member States are better equipped to handle the necessary system changes than 
others. In accordance with Article 13 Member States are not obliged to 
implement the draft regulation unless the Commission (Eurostat) will bear two-
thirds of the additional costs 
-3.5 
7.2 Breakdown of the cost of the action 
Member States will produce a breakdown of the costs of their action as part of the 
process of agreeing contracts. 
8. Fraud prevention measures 
Contractual arrangements with Member States will be set in place to ensure appropriate 
actions are undertaken and properly accounted for. 
9. Elements of cost-effectiveness analysis 
9.1 Specific and quantified objectives; target population 
Specific objectives: 
Improved and comparable indices of consumer prices. 
Target population: 
Users of price indices in Member States will benefit from improved measures as 
will decisions by the EMI and the Commission as regards both Monetary Union 
and other macro-economic developments. 
9.2 Grounds for the operation 
The Council Regulation should lead to improved reliability and international 
comparability of the CPIs of Member States. It should lead too to a sharing of 
expertise and technological applications on CPI compilation between Member 
States. 
Main factor of uncertainty: 
The Council Regulation provides only a framework within which many technical 
details must be resolved in collaboration with Member States. 
9.3 Monitoring and evaluation of the operation 
The implementing measures provide for extensive monitoring and the development 
of appropriate performance indicators by means of questionnaires and Eurostat 
audit missions (see below for costs). 
The Council Regulation provides for a review by November 1997 and again by 
November 1999. The 1997 review has already been sent to the Secretariat General 
of the Commission for submission to the Council of Ministers. 
ZH 
10. Administrative expenditure (Section III, Part A of the budget) 
Actual mobilisation of the necessary administrative resources will depend on the 
Commission's annual decision on the allocation of resources, taking into account the 
number of staff and additional amounts authorised by the budgetary authority. 
10.1 Effect on the number of posts 
Type of post 
Officials or 
temporary 
staff A 
B 
C 
Other resources 
(experts) 
A-7000 
Total Staff to be assigned to 
managing the operation 
Permanent 
posts 
VA 
2 
1 
2 
VA Temporary 
posts Source 
Existing 
resources in 
the DG or 
department 
concerned 
VA 
2 
1 
1 
VA Additional 
resources Duration 
3 years 
The annual cost of existing resources is: 
Officials (titles Al, A2, A4, A5) 
Experts (A-1178) = 682.500 Ecu x 3 years 
= 98.000 Ecu x 3 years 
Total = 2.047.500 
= 294.000 
= 2.341.500 
10.2 Overall financial impact of additional human resources 
none 
10.3 Increase in other administrative expenditure as a result of the operation 
Ecu 
Budget heading Amounts Method of calculation 
A - 7031 Working groups of the 
Statistical Programme Committee 96.000 4 meetings at 8 K Ecu covering 
delegates expenses (x 3 years) 
The costs of the audit missions to ten Member States per year - three days at 120 Ecu 
per day + fares - is estimated at 31.800 Ecu: 
A-701 31.800 Ecu x 3 years = 95.400 
STATEMENT OF IMPACT OF THE PROPOSAL ON 
INDUSTRY AND IN PARTICULAR ON SMALL AND 
MEDIUM ENTERPRISES 
Title of proposal: 
Proposal for Council Regulation (EC) amending Regulation (EC) No 1749/96 concerning the 
geographic and population coverage of the Harmonized Index of Consumer Prices 
The proposal: 
1. Taking account of the principle of subsidiarity why is Community legislation 
necessary in this area and what are the main aims? 
The aim is to expedite a programme of work leading to Harmonized Indices of Consumer 
Prices (HICPs) in line with the convergence criteria requirements of the Treaty 
establishing the European Community. HICPs are designed for international comparisons 
of consumer price inflation. They will be used in particular by the European Commission 
and the European Monetary Institute for the assessment of inflation convergence under 
Article 109 (j) of the Treaty establishing the European Community. HICPs will 
subsequently form the basis of the Monetary Union Index of Consumer Prices (MUICP) to 
be used by, among others, the future European Central Bank for the monitoring of 
inflation in the Economic and Monetary Union. 
Council Regulation (EC) No 2494/95 provides the framework for detailed Commission 
Regulations requiring Member States to produce HICPs following concepts methods and 
practices which have been proposed by the Working Party1 on CPI Harmonization and 
approved by the Statistical Programme Committee following the Regulatory Committee 
procedure. In accordance with Article 5 (3) of the Council Regulation implementing 
measures are necessary for ensuring comparability of HICPs and for maintaining and 
improving their reliability. So far the Commission has adopted three detailed regulations 
establishing specific statistical standards governing the production of the HICP. The first, 
Commission Regulation (EC) 1749/96 on initial implementing measures, covers six 
technical areas: initial coverage, newly significant goods and services, elementary 
aggregates, and minimum standards for quality adjustment, sampling and prices. The 
second, Commission Regulation (EC) No 2214/96, relates to the HICP and its sub-indices 
that will be transmitted to and disseminated by Eurostat. The third, Commission 
Regulation (EC) No 2454/97, defines minimum standards for the quality of the weights 
used to construct the HICP. 
On 7 March 1997 Eurostat published the first set of Harmonized Indices of Consumer 
Prices (HICPs) as required by Article 5 (1) (b) of Council Regulation 2494/95. The HICPs 
provide the best statistical basis for international comparisons of consumer price inflation 
and very considerable progress has been made in harmonizing methodologies. However, 
. more work remains to be done to achieve further harmonization of consumer price indices. 
Group of experts 
3& 
Article 3 of Council Regulation (EC) No 2494/95 requires that the HICP shall be based on 
the prices of goods and services available for purchase on the economic territory of the 
Member State for the purposes of directly satisfying consumer needs. However, a 
harmonized définition of the geographic and population coverage of the HICP is still 
needed and the draft regulation seeks to provide this. It specifies that the coverage, for the 
calculation of HICP weights, should include all household final monetary consumption 
expenditure which takes place on the economic territory of that Member State. In 
particular the coverage should include expenditure by foreign visitors (the "domestic 
concept") and individuals living in institutions. All private households should also be 
included irrespective of the area in which they live or their position in the income 
distribution. Expenditure incurred for business purposes should be excluded. 
A harmonized definition of the geographic and population coverage of the HICP is 
required for the purpose of achieving comparability and also to avoid gaps or double 
counting in the coverage of the Monetary Union index of consumer prices (MUICP) and 
the European index of consumer prices (EICP). 
The reasons for requiring the domestic concept to be used are as follows. The purpose of 
the HICP is to provide the measure for the price stability criterion and to serve as the basis 
for the future MUICP. The objective is to measure the price changes within each of the 
territories of the individual Member States rather than the price changes affecting selected 
households, such as resident households. The price changes which need to be measured 
within the territory of a Member State include those affecting foreign visitors. Therefore, 
for the purpose of measuring convergence, the domestic concept should be used. 
Additionally, for the purpose of stage III of EMU, the European Central Bank (ECB) will 
have to focus on the MUICP. The objective of the ECB is to maintain price stability in the 
Euro area. Therefore it is necessary to have a coinciding definition of the Euro area and 
the area to which the MUICP relates. This property is fulfilled by the domestic concept. 
The expenditure of people living in institutional households should be included for the 
following reason. The coverage of the HICP is defined as those goods and services which 
are included in household final monetary consumption expenditure. The household sector 
includes people living in institutions, and therefore their expenditure should be included in 
the weights of the HICP. 
The impact on business: 
2. Who will be affected by the proposal? 
• which sector of business 
Consumer price indices are compiled using prices and weights. For most Member States the 
draft regulation will involve extending the coverage of the information used to calculate the 
HICP weights. For example they will have to include expenditure by foreign visitors or 
individuals living in institutions such as retirement homes. According to the principle of 
subsidiarity it is up to the National Statistical Institutes to decide how and where to collect that 
information. To a large extent the data could be obtained from already existing sources such as 
tourism statistics. Furthermore, information on people living in institutional households could 
be collected from non-profit organisations serving households or the government sector. 
• which size of business? (what is the concentration of small and medium sized 
firms?) 
^ 
The size of the business is only relevant to the extent that the weights should correctly reflect 
the expenditure of all households, including people living in institutional households such as 
retirement homes. According to the principle of subsidiarity, the data sources are selected by 
the National Statistical Institutes. 
• are there any particular geographic areas of the EU where these businesses are 
found? 
The geographic area is only relevant to the extent that the weights should correctly reflect the 
household monetary consumption expenditure on the whole economic territory of the Member 
States. All Member States of the European Union, Norway and Iceland are concerned. 
3. What will businesses have to do to comply with the proposal? 
National Statistical Institutes collect the necessary information about the expenditure of all 
households on the economic territory from already existing data sources such as for example 
household budget surveys, tourism statistics, and national accounts. In some cases it might be 
necessary to extend the existing surveys or to collect the information directly from non-profit 
organisations serving households, government agencies, or retirement homes. In general, the 
participation in such surveys is on a voluntary basis. 
4. What economic effect is the proposal likely to have? 
• on employment? 
• on investment and the creation of new businesses? 
• on the competitive position of businesses? 
An indirect effect, in so far as the HICPs allow international comparisons of consumer price 
inflation, and will provide the statistical basis for the assessment of inflation convergence under 
Article 109 (j) of the Treaty establishing the European Community. In Stage III of EMU, the 
HICPs will be used to compile the Monetary Union Index of consumer prices (MUICP), which 
will be the indicator for monetary policy of the future European Central Bank. A single and 
stable currency is an important step to advance European integration and to promote economic 
progress with important impact on employment, investment and competition. 
5. Does the proposal take account of the specific situation of small and medium-sized 
firms (reduced or different requirements etc.)? 
According to the principle of subsidiarity, the data sources are defined by the National 
Statistical Institutes. They already collect similar information on weights for calculating their 
national consumer price indices (CPIs). The HICPs are mainly based on that information. 
However, the proposed regulation might involve new data collection in some Member States. 
To a large extent the data could be obtained from already existing sources such as tourism 
statistics. Furthermore, information on people living in institutional households could be 
collected from non-profit organisations serving households or the government. In general, 
participation in such surveys is on a voluntary basis. 
3^ 
Consultation: 
6. List the organisations which have been consulted about the proposal and outline 
their main views. 
The European Advisory Committee on Statistical Information in the Economic and Social 
Spheres (CELES)2, DG II of the Commission, the European Monetary Institute, and Central 
banks of Member States are participating actively in the meetings of the Working Party3 on 
CPI Harmonization and the Task Forces. They emphasised that a harmonized definition of the 
geographic and population coverage of the HICP was required for the purpose of achieving 
comparability and essential for assuring that the there would be no gaps or double counting in 
the coverage of the Monetary Union index of consumer prices (MUICP) which needs to be 
calculated from January 1999. They are therefore in favour of the proposed regulation. 
established by Council Decision 91/116/EEC; the Committee is made up of representatives from the 
scientific, economic and social fields covering producers and users of statistical information 
Group of experts 
3<5> 
COMPLEMENTARY STATEMENT CONCERNING EFTA 
COUNTRIES 
Title : Proposal for Council Regulation (EC) amending Regulation (EC) No 1749/96 
concerning the geographic and population coverage of the Harmonized Index 
of Consumer Prices 
Impact on EFTA countries 
EFTA countries have been involved in discussions of the Statistical Programme Committee 
and the Working Party on the Harmonization of Consumer Price Indices. They are fully 
aware of the proposals for a Regulation and their views have been taken into account in 
preparing the draft. They intend to compile Harmonized Indices of Consumer Prices 
(HICPs) in accordance with this Regulation. 
M ^j 


ISSN 0254-1475 
COM(98) 323 final 
DOCUMENTS 
EN 10 09 06 17 
Catalogue number : CB-C0-98-331-EN-C 
ISBN 92-78-36385-5 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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