Supplementing the MIP scoreboard indicators, a list of 28 auxiliary indicators (see Table 2) provides additional information on aspects linked to the general macroeconomic situation, nominal and real convergence inside and outside the European Union and the euro area, detailed data on external liabilities, including foreign direct investment and net external debt, and social statistics. The auxiliary indicators enhance the information base for understanding potential imbalances, as well as the adjustment capacity of the economy. The auxiliary indicators are also presented in this Statistical Annex by year (in Chapter 2) and by country (in Chapter 5).

The cut-off date for the data, that is the date on which the data were extracted from the Eurostat database for the preparation of this document, was 25th October 2019. For additional information about the data, please contact ESTAT-MIP@ec.europa.eu .

The MIP Scoreboard consists of fourteen scoreboard indicators measuring internal and external imbalances as well as social and labour market developments. The MIP scoreboard indicators for the last ten years are displayed in this statistical annex by year in chapter 1, and by country in chapter 4. Table 1 lists the MIP scoreboard indicators together with detailed information on their data sources.

The policy framework of the MIP relies on timely and high quality socio-economic and financial statistics. Since the publication of the first Statistical Annex in 2012, significant progress has been achieved towards enhancing the standards and methods used for the compilation of underlying data as well as strengthening the statistical quality assurance framework.

This Statistical Annex to the 2020 Alert Mechanism Report (AMR 2020) presents the Macroeconomic Imbalance Procedure (MIP) scoreboard and auxiliary indicators used in the economic reading of the MIP scoreboard. Eurostat mainly compiles these indicators from data transmitted by Member States, following European legislation. The MIP scoreboard indicators are presented with their indicative thresholds (used in the AMR) while no threshold is applied to the auxiliary indicators.

In Chapter 3, the data are presented by indicator to allow easy comparison of Member States for the 10-year time series. In addition, short descriptions of the indicators and detailed information on sources and methods employed for their compilation are provided.

Statistical methodology improvements

Since 2014, MIP indicators stemming from the National Accounts (NA) and Balance of Payments (BoP) and International Investment Position (IIP) domains have been computed following the ESA 2010 and BPM6 statistical standards (the European System of Accounts 2010 and the Balance of Payments and International Investment Position Manual, 6th edition) that guarantee a high level of comparability across European Union Member States. The successful implementation of these standards improved the quality of the MIP underlying data.

In particular, concerning indicators from the Balance of Payments and International Investment Position, the revision of international standards and changeover to BPM6 was translated into new data requirements via the adoption of Commission Regulation (EU) No 555/2012 and ECB Guideline (ECB/2011/23). According to the legislation, Member States shall submit to the Commission (Eurostat) data following the BPM6 requirements from 2014 onwards only. In order to maintain comparability over time, either countries themselves or Eurostat in cooperation with them, have back-calculated the main BoP time series according to the new standards. As a result, data coverage for the ten years timespan needed for this year's Statistical Annex (2009-2018) is complete.

The implementation of the standards ensures conceptual consistency between National Accounts and Balance of Payments/ International Investment Position. However, in practice, differences in the different components of the accounts (the BoP/IIP and NA Rest of the world data) still persist.

Eurostat has further elaborated on the reconciliation of the Balance of Payments and the Rest of the World (RoW) account at national level. After the implementation of the BPM6 methodology in 2014, Eurostat has regularly assessed the state of consistency between Balance of Payments and National Accounts statistics.

Additional changes in 2019

The implementation of the harmonised European revision policy (HERP) for National Accounts and balance of payments statistics covering benchmark and routine revisions is progressing on a voluntary basis. The policy includes differentiated guidelines regarding the timing and depth of routine and benchmark revisions to quarterly and annual data. It aims at improving adherence to the twofold principle of alignment at national level between statistical domains and coordinated alignment at European Union level across the countries.

According to the recommendations of the HERP, Member States should carry out benchmark revisions typically every 5 years. Since Member States implemented the last benchmark revision in 2014 in the context of the implementation of the revised methodologies ESA 2010 and BPM6, 2019 is the recommended implementation year of a new benchmark revision, even though some countries have decided to deviate from this recommended practice. In 2019, 17 Member States, namely Belgium, Bulgaria, Germany, Estonia, Spain, Italy, Cyprus, Latvia, Lithuania, Hungary, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom, as well as Norway carried out coordinated benchmark revisions of national accounts and balance of payments. It is worth noting that France and the Netherlands already implemented their benchmark revisions in 2018 and Austria in 2016. While the introduction of benchmark revisions is usually associated with more significant revisions, they improve the overall quality and consistency of data through further improvements in the methodology, sources or estimation techniques applied.

In the Balance of Payments domain, progress has been made concerning the asymmetries in trade in goods and services. To address the problem of asymmetries in mirror trade data, Eurostat organised several workshops under the umbrella of its Balance of Payments Working Group with Member States. During these workshops, experts from Member States had the opportunity to exchange experiences, discuss bilaterally and decide on specific actions to resolve their corresponding trade asymmetries. Member States have also been invited to present their experiences and approaches to address bilateral asymmetries with partner countries. Furthermore, a recent paper jointly drafted by the Bureau of Economic Analysis (BEA) and Eurostat, analysed current account asymmetries with a focus on bilateral trade in services asymmetries and cross-border income flows between the United States and the European Union. The paper finds that EU-US bilateral asymmetries have shown an increasing trend in recent years. One of the identified reasons for asymmetries is that the US has not yet fully implemented the international methodological guidance (BPM6) while the Commission has ensured its implementation in all EU Member States by means of Commission Regulation (EU) No 555/2012.

Eurostat is working closely with the BEA and EU Member States to address these shortcomings, and further bilateral work between the BEA and Eurostat is foreseen. Specific treatments of Direct Investment will also be examined, such as the reinvestment of the profits of the Direct Investment companies, the valuation criteria of the equity participations of a Direct Investment company, and the creation of notional resident units.

In the domain of Financial Accounts, regarding Total Financial Sector Liabilities, work is ongoing to ensure a comprehensive and timely coverage of Other financial institutions (OFIs). Other areas of ongoing or planned statistical work which are important for the quality of MIP indicators concern the recording of other equity, of derivatives, of loans between non-financial corporations, of foreign-controlled corporations, and of the vertical discrepancy with non-financial sector accounts.

Concerning the Labour Force Survey, no major changes affected the data during 2018/19. In view of the entry into force of the Integrated European Social Statistics Framework Regulation (IESS FR), expected for the beginning of 2021, all countries are postponing methodological changes to that date, in order to introduce them together with the new standards provided by the regulation. The strategy is to impact the data time series with a unique major break, instead of perturbing the series for a longer period. A common strategy for the production and dissemination of back-calculated series is under development, led by Eurostat.

In the House Prices domain, the Index for Germany has been revised upwards in 2016 and 2017 to better capture the locations of property transactions and therefore to better reflect strong rise of prices in large cities. For Hungary, the index has been revised upwards in 2017 and 2018 following an adjustment of the housing quality composition index. The change concerned the composition of sold houses, which shifted more towards lower-quality housing than previously estimated in 2015. As a result of the adjustment, the 2017-2018 quality composition Index has been revised downwards, thus resulting in higher pure price index values than previously reported.

General Government Gross Debt data notified for the years 2015 to 2018 have been released on 21st October 2019 within the EDP notification. For more information on main revisions between the April 2019 and the October 2019 notifications please see the latest EDP news release .

The MIP quality framework

The credibility of the MIP and its smooth implementation depends critically on the availability and quality of the MIP underlying statistics. The statistics used in the procedure have to be fit for the purpose, reliable and comparable among Member States and in time. For that reason, the scoreboard indicators are regularly reviewed; the underlying statistical methodology and the statistical production processes are constantly improved. Statistics underlying the MIP indicators are based on European Union legislation and compiled by the European Statistical System (ESS) and in part by the European System of Central Banks (ESCB).

In 2016, the Economic and Financial Affairs Council (ECOFIN) recalled that the MIP must rely upon sound and harmonised official statistics and since 2011 it has emphasised the importance of close cooperation between the ESS and the ESCB in assessing the reliability of the statistics underlying the MIP and improving their quality. Following the invitation of the Council to take all necessary initiatives to assure a reliable procedure for the compilation of MIP indicators as well as a continuous improvement of the underlying statistical information, a Memorandum of Understanding (MoU) was signed between Eurostat and the Directorate General Statistics of the European Central Bank in November 2016, which mutually recognises both quality assurance frameworks and enables an even closer cooperation on the respective quality reports in the field of BoP/IIP and Financial Accounts.

The MIP quality assurance framework, developed jointly by Eurostat and the Directorate General Statistics of the European Central Bank, follows a three-level structure. A comprehensive webpage with information and links to all relevant quality documents is available on the MIP dedicated section of Eurostat website. In this framework, the work performed in 2018 consisted of the following actions:

·Level 1: preparation of an annual ESS-ESCB quality assessment report on MIP statistics by Eurostat and the ECB towards the European Parliament and Council, policy makers and the public at large, to assess the reliability and comparability of MIP underlying statistics and address the most relevant quality issues. The fifth report was published in June 2019 on the websites of Eurostat, the ECB, and of the Committee on Monetary, Financial and Balance of Payments Statistics (CMFB). This year's report has been streamlined, with better separation of recent developments from more permanent features.