Proposal for a Council Regulation on the harmonisation of Gross National Income at market prices
(‘GNI Regulation’)
(2003/C 45 E/06)
COM(2002) 558 final — 2002/0245(CNS)
(Submitted by the Commission on 15 October 2002)
EXPLANATORY MEMORANDUM
1. Gross National Product (GNP) and Gross Domestic Product (GDP) play a major role in the own resource
system and various Community policies, notably since the fourth GNP resource was set up in 1988.This makes it necessary to reinforce the comparability, reliability and exhaustiveness of Member States'GNP data.
2. Up to now, GNP calculations were based on the former European System of Integrated Economic
Accounts, the so-called ESA 79. Based on a Commission proposal, the Council adopted GNP Directive89/130/EEC, Euratom setting up a procedure to assess the comparability, reliability and exhaustivenessof GNP. This procedure is centred on the GNP Committee in which Member States and the Commissionco-operate closely in order to further harmonise and improve the quality of GNP.
3. Starting from the budgetary year 2002, the new European System of Accounts (the ESA 95) will be
used to calculate GNP (now called GNI or Gross National Income) according to Decision 2000/597/EC,Euratom on own resources. It is therefore necessary to redefine the legal framework for harmonisation
and improvement work on GNI, taking account of ESA 95 specificities.
4. This proposal for a Council GNI Regulation addresses this objective. Following the example of the
current GNP Directive, this proposal:
— defines the methods of calculation of GNI based on ESA 95,— specifies Member States' obligations concerning data transmission,— sets up the GNI Committee as the new forum for co-operation between Member States and the
Commission concerning verification and improvement work on GNI.
5. This proposal for a Regulation has been thoroughly discussed with Member States' representatives in
the GNP Committee.
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the EuropeanCommunity,
Having regard to the Treaty establishing the European Atomic
Energy Community,
Having regard to Council Decision 2000/597/EC, Euratom of
29 September 2000 on the system of the Communities' ownresources (
1), and in particular Article 8(2) thereof,Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,Whereas:
(1) The increasing share of the Community's own resource
based on the gross national product at market prices(hereinafter referred to as GNPmp) of the MemberStates, makes it necessary to further reinforce thecomparability, reliability and exhaustiveness of thisaggregate.EN 25.2.2003 Official Journal of the European Union C 45 E/61
(1) OJ L 253, 7.10.2000, p. 42.
(2) These data are also an important analytical tool for the
coordination of national economic policies and forvarious Community policies.
(3) For own resource purposes, Council Decision
2000/597/EC, Euratom states that GNPmp is equal togross national income at market prices (hereinafterreferred to as GNI) as provided by the Commission inapplication of the European system of national andregional accounts (hereinafter referred to as ESA 95) inaccordance with Council Regulation (EC) No 2223/96 (
1).
(4) GNI data must be comparable. These data can be
comparable only if the relevant definitions and accountingrules of ESA 95 are complied with. For that purpose, theassessment procedures and the basic data actually used
should permit the correct application of the definitions
and accounting rules of ESA 95.
(5) The sources and methods used to compile GNI must be
reliable. This means that sound techniques should beapplied to robust and suitable basic statistics as much aspossible.
(6) GNI data must be exhaustive. This means that they should
take account also of the activities that are not reported instatistical surveys or to fiscal, social and other adminis-trative authorities. Improved GNI coverage presupposesdeveloping suitable statistical bases and assessmentprocedures and making adequate adjustments.
(7) In order to fulfil its mission of providing GNI data for
own resource purposes, the Commission shall takemeasures aimed at improving the comparability, reliabilityand exhaustiveness of Member States' GNI.
(8) Council Directive 89/130/EEC, Euratom of 13 February
1989 on the harmonization of the compilation of grossnational product at market prices (
2) has set up a
procedure to verify and assess the comparability, relia-bility and exhaustiveness of GNP within the GNPCommittee in which Member States and the Commissionco-operate closely. This procedure should be adjusted totake account of the use of ESA 95 GNI for the purposesof own resources.(9) In accordance with Article 2 of Council Decision
1999/468/EC of 28 June 1999 laying down theprocedures for the exercise of implementing powersconferred on the Commission (
3), measures for the
implementation of this Regulation should be adopted byuse of the advisory procedure provided for in Article 3 ofthat Decision.
(10) The Statistical Programme Committee (SPC) has been
consulted in accordance with Article 3 of Decision89/382/EEC, Euratom (
4),
HAS ADOPTED THIS REGULATION:
CHAPTER I
Definition and calculation of gross national income at
market prices
Article 1
1. Gross National Income at market prices (GNI) and Gross
Domestic Product at market prices (GDP) shall be defined inaccordance with the European System of National and RegionalAccounts (ESA 95).
2. GDP is the final result of the production activity of
resident producer units. It can be defined in three ways:
(a) GDP is the sum of gross value added of the various insti-
tutional sectors or the various industries plus taxes and lesssubsidies on products (which are not allocated to sectorsand industries). It is also the balancing item in the total
economy production account.
(b) GDP is the sum of final uses of goods and services by
resident institutional units (actual final consumption andgross capital formation) plus exports and minus importsof goods and services.
(c) GDP is the sum of uses in the total economy generation of
income account (compensation of employees, taxes onproduction and imports less subsidies, gross operatingsurplus and mixed income of the total economy).EN C 45 E/62 Official Journal of the European Union 25.2.2003
(1) OJ L 310, 30.11.1996, p. 1.
(2) OJ L 49, 21.2.1989, p. 26.(3) OJ L 184, 17.7.1999, p. 23.
(4) OJ L 181, 28.6.1989, p. 47.
3. GNI represents total primary income receivable by
resident institutional units: compensation of employees, taxeson production and imports less subsidies, property income(receivable less payable), gross operating surplus and grossmixed income. GNI equals GDP minus primary incomepayable by resident units to non-resident units plus primaryincome receivable by resident units from the rest of the world.
CHAPTER II
Forwarding of GNI data and additional information
Article 2
1. Member States shall establish GNI in accordance with
Article 1 in the context of regular national accounting.
2. Before 15 September each year, Member States shall
provide the Commission (Eurostat), in the context of nationalaccounting procedures, with figures for aggregate GNI and itscomponents, according to the definitions referred to inArticle 1. Totals for GDP and its components may bepresented according to the three approaches mentioned inArticle 1, paragraph 2. The figures provided shall cover thepreceding year and any changes made to the figures forprevious years.
3. When they communicate the data foreseen in para-
graph 2, Member States shall transmit a report on thequality of GNI data to the Commission (Eurostat). The reportshall supply the information necessary to show how the
aggregate was reached, and in particular describe any
significant changes in the procedures and basic statistics usedand explain the revisions made to earlier GNI estimates. Thecontent and format of this report shall follow the guidelineslaid down by the Commission after consulting the committeereferred to in Article 4.
Article 3
Member States shall provide the Commission (Eurostat), in
accordance with the guidelines laid down by the latter afterconsulting the committee referred to in Article 4, with aninventory of the procedures and basic statistics used tocalculate GNI and its components according to ESA 95.Member States shall improve and update their inventoryaccording to these guidelines.
CHAPTER III
Procedures and checks on the calculation of GNI
Article 4
1. The Commission shall be assisted by a committee,
referred to as the GNI Committee, composed of representativesof the Member States and chaired by the representative of theCommission.2. Where reference is made to this paragraph, the advisory
procedure laid down in Article 3 of Decision 1999/468/ECshall apply, in compliance with Article 7(3) thereof.
3. The Committee shall adopt its rules of procedure.
Article 5
1. The Commission shall verify the sources and methods
used by Member States to calculate GNI. Measures to make
GNI data more comparable, reliable and exhaustive shall beadopted in accordance with the procedure referred to inArticle 4 paragraph 2.
2. The Committee referred to in Article 4 shall examine
questions raised by its Chairman, either on his own initiativeor at the request of the representative of a Member State,relating to the implementation of this Regulation, in particularwith regard to:
(a) Compliance each year with the definitions referred to in
Article 1.
(b) The examination each year of the data forwarded under the
terms of Article 2(2) and the information forwarded underthe terms of Article 2(3) concerning the statistical sourcesand the procedures for calculating GNI and its components.This examination shall lead to a GNI Committee's opinionon the appropriateness of Member States' GNI data for ownresource purposes with respect to reliability, comparabilityand exhaustiveness. This opinion will indicate the maindocuments on which the examination is based. Reliability,comparability and exhaustiveness of GNI and itscomponents must be assessed taking account of the cost-benefit principle.
In this context, the cost-benefit principle entails a
judgement on the potential size and significance ofspecific activities or transactions based on whateverinformation is available. This information is often quali-
tative, though it may be quantitative in some cases. The
Commission (Eurostat) examines the comparability in thetreatment of similar cases in the Member States and reportsto the GNI Committee on all cases where the cost-benefitprinciple is considered to apply. The application of thisprinciple should avoid committing disproportionateresources to calculate insignificant items.
(c) Expressing its views, without prejudice to Article 4, on
Commission proposals aiming to improve GNI calculations,including interpreting ESA 95 definitions where necessaryand quantifying the impact of these proposals on GNI.
3. The Committee shall dedicate particular efforts to the
improvement of Member States' GNI compilation practicesand to the dissemination of best practices in this domain.EN 25.2.2003 Official Journal of the European Union C 45 E/63
It shall also deal with questions relating to the revision of GNI
data and the problem of the exhaustiveness of GNI.
It shall, if necessary, suggest to the Commission measures to
make GNI data more comparable and more reliable.
Article 6
Without prejudice to the inspections foreseen in Article 19 of
Council Regulation (EEC, Euratom) No 1150/2000 (1), joint
GNI information visits may, where deemed appropriate, becarried out to Member States by the Commission's servicesand representatives from other Member States in consultationwith the Member States visited. The participation of MemberStates in these visits is voluntary.CHAPTER IV
Final provisions
Article 7
Before the end of 2005, the Commission shall submit a report
on the application of this Regulation to the EuropeanParliament and to the Council.
Article 8
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.EN C 45 E/64 Official Journal of the European Union 25.2.2003
(1) OJ L 130, 31.5.2000, p. 1.