OPINION OF THE EUROPEAN MONETARY INSTITUTE
at a request of the Council of the European Union under Article 109 f (6) of the Treaty establishing the
European Community (“the Treaty”) and Article 5.3 of the Statute of the EMI
on a Draft Proposal for a Council Regulation concerning Short-Term Statistics
(COM(97)  313 final) (“the Draft Regulation”).
CON/97/19
1. The present opinion was requested in a letter dated 30  July 1997 from the Council of the European
Union which, for this purpose, transmitted to the EMI document “ COM(97)  313 final” containing the
Draft Regulation and its explanatory memorandum. The EMI is competent for this consultation, by
virtue of Articles 109f  (6) of the Treaty and Article  5.3 of the Statute of the EMI.
 
2. The objective of the Draft Regulation is to establish a framework for the production of short-term
business statistics. The EMI as the forerunner of the ECB has a keen interest in this initiative, since
the indicators covered under the Draft Regulation are of vital interest for the future single monetary
policy. They will provide the necessary economic background information and contribute to the
statistical basis on which monetary policy decisions will be taken.
 
3. In July 1996 the EMI set out the statistical requirements for Monetary Union and specified the
prospective requirements in the field of short-term statistics.1 In general, the ECB will need
sufficiently comparable, comprehensive and timely data from the start of Monetary Union in January
1999. Whilst the analysis of economic developments in individual Member States will continue to be
important, the focus of the single monetary policy will move to aggregated results for the Monetary
Union area as a whole. An important implication of this is that a common standard for all Member
States is essential and that exceptions from this standard must be avoided or minimised if they
challenge the compilation and quality of Monetary Union-wide statistics.
 
4. The current provision of short-term business statistics at a European level does not meet the
requirements of the future single monetary policy. Therefore the EMI strongly supports this initiative.
The EMI is conscious of the costs which the required changes may entail. These costs have to be
1 Implementation Package (Statistical Requirements for Stage Three of Monetary Union), EMI, July 1996.
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viewed against the opportunity to define and conduct policy with the benefit of better information. The
following comments are divided into general and more specific comments.
 
 A.General remarks
 
5. With a view to the start of Stage Three of Economic and Monetary Union in January 1999, the
EMI regards it as necessary that the Draft Regulation is adopted as soon as possible and that
further delays in the implementation of the Regulation are limited to the unavoidable minimum. The
information provided by the statistics covered under the Draft Regulation will play an important
role in the monetary policy decision-making process.
6. Most important for the EMI and the future ECB are timely short-term statistics with a sufficiently
broad coverage of the economy which should be available for all Member States in a comparable
fashion. From the point of view of the EMI, the following paragraphs 7. To 11. of this
Opinion would therefore have highest priority.
7. According to the Draft Regulation, the first data to be supplied are due in January 1998 . However,
the Draft Regulation provides for a general transition period of up to five years and, for a small
group of indicators, for a transition period of two years (Article 12(1) and Annex A to C(j)).
Complete EU-wide data may not therefore be available before the year 2003 or 2000 respectively.
Although the EMI acknowledges that the introduction of new statistics or the change to existing
collection systems may require significant efforts in the Member States concerned, the provision of
long transition periods is a serious shortcoming of the Draft and is not in line with the start of a
single monetary policy in January 1999.  The EMI therefore proposes that the general
transition period of five years should be reduced to a period of three years and the two-
year transition period to a period of one year.
 
8. In the context of the length of the transition periods and the timeliness of the data produced under
the Regulation, it is also emphasised that, for the purposes of macroeconomic and monetary policy
analysis, timely  aggregated indicators are more important than detailed breakdowns.
 
9. The EMI welcomes the provision in Article 8(3) for timely transmission of the results from the
Member States to the Statistical Office of the European Communities, enabling the Statistical
Office of the European Communities to release these data in a timely fashion. The upper limit of
six months for the transmission of statistics as provided for in Article 8(2) is regarded as
much too long for the purposes of short-term statistics.
 
10. The Draft Regulation provides for only a few legally binding measures for enhancing the
conceptual comparability of short-term statistics (Articles 7 and 11). The EMI underlines the
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importance of a sufficient comparability of national data for the purpose of aggregation. The
introduction of more comparable statistical methods should therefore be a priority after
the implementation of the Regulation.
 
11. The EMI welcomes the broad scope of the Draft Regulation. However, given the increasing
importance of the services sector in the economy, the EMI regrets the low priority which has been
given to “other services” (Annex D). The EMI accepts that studies may need to precede
the introduction of new statistics, in particular in order to identify the most relevant and
cyclical sub-sectors, but proposes that the envisaged timetable for the decision on and
introduction of quarterly statistics relating to the service sector should be shorter.
 
12. The scope of the Regulation includes all market activities in the financial intermediation sector as
defined in the NACE Rev.1. Given the responsibilities of the future ECB in the field of
financial statistics, the EMI proposes that the first sentence of Article 16 of the Draft
Regulation is amended by the following addition after “...laid down in Article 17”:
 “... and, for all implementation measures concerning Section  J of NACE  Rev.1,
after consultation of the European Central Bank and the Committee on
Monetary, Financial and Balance of Payments Statistics,...”
 
13. With reference to the scope of the Draft Regulation the EMI also notes that the production of
import price statistics  is not covered by the Regulation. Considering the importance of such data
for the purposes of inflation analysis, the EMI suggests that this variable should be added to the
catalogue of indicators covered by the Draft Regulation.
 
14. Concerning Article  10 of the Draft Regulation the EMI suggests that the regular weight
adjustments of the indicators should be carried out in a co-ordinated manner as far as possible in
order to avoid frequent weight changes in the derived EU- and MU-aggregates as a consequence
of adjustments of national weighting schemes.
 
 
 
 
 B.Specific remarks
 
 Annex  A (Industry module)
15. The EMI welcomes the inclusion of industrial order statistics  in the Draft Regulation, deeming
these essential for detecting trends and turning points in the economy in a timely fashion. For the
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ECB it will be important to know the geographical origin of orders or, more specifically, to be able
to separate orders originating from the single currency area from orders originating from
other countries . The traditional split into national and foreign orders will not suffice for this, since
total export orders will cover orders from other Monetary Union countries as well as orders from
third countries. Moreover, for the ECB this breakdown will be more relevant than the breakdown
into intra-EC and extra-EC export market variables for which the Draft Regulation foresees in
Annex  A(h) the launch of a voluntary pilot study. The EMI considers that a legal initiative, which
will start producing statistical results at broadly the same time as the start of the single monetary
policy, should make provision for this important variable.
 A corresponding modification of the Draft Regulation i s proposed for industrial output prices .
The current Draft does not allow for the compilation of output prices for Monetary Union area-
wide sales, although this is likely to be the most important producer price indicator for the ECB.
 
16. The EMI supports the proposed calculation frequencies  and deadlines for data transmission.
They provide a good basis for the purposes of short-term economic analysis. Given the importance
of order statistics for conjunctural analysis, however, a shorter transmission delay for this variable
would be desirable.
 
 Annex  B (Construction module)
17. The EMI welcomes the comprehensive list of indicators envisaged for the construction sector. The
planned statistics on output prices  and construction costs  are important indicators for inflation
analysis.
 
18. Concerning the variable new orders received , the EMI proposes that a breakdown should be
added between residential, industrial and public construction orders. Such a breakdown can provide
valuable information for cyclical analysis.
 
19. The EMI notes that the limitation of construction output prices  and construction costs  to new
residential buildings significantly reduces the information provided by these variables. A wider
coverage of these indicators would be preferable.
 
20. Moreover, the EMI notes that the envisaged transmission delays  for construction statistics are in
several cases too long. This concerns in particular the variables for new orders, output prices and
construction costs, for which the EMI proposes that the envisaged timeliness should be about 60
calendar days instead of 90 calendar days.
 
 
 
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 Annex C (Retail trade module)
21. Given that retail trade turnover  data is the most important short-term information on household
demand, the timely provision of sufficiently reliable results is essential. The foreseen transmission
delays of three to six months appear unduly long. Moreover, the nature and the quality of the
“special estimated advance variables”, which are to be transmitted on the highest aggregation level
within two months, are not sufficiently clear. It is therefore proposed that the delay for all
preliminary results should be reduced from three to two months.
22. Corresponding to what is envisaged for the industry and construction module, the EMI would
suggest the addition of a variable for gross wages and salaries which is an important indicator for
monetary policy analysis.
 
 
 Annex D (Other services module)
23. According to the Draft Regulation, pilot studies are to be carried out by the end of 2002 before any
decision is taken regarding the introduction of short-term services sector statistics. Against this
background, the EMI regards it as premature to propose a transmission delay of six months after
the end of the reference period. This specification should await the outcome of the planned pilot
studies. In any case, transmission delays of six months are not compatible with the objectives of
short-term statistics.
 
24. The EMI would suggest the addition of a variable for gross wages and salaries and, if practicable,
also output prices to the two variables (turnover and persons employed) which are planned to be
subject of a pilot study.
25. This opinion will be published in the Official Journal of the European Communities.
11 September 1997