OPINION OF THE EUROPEAN MONETARY INSTITUTE
following a consultation by the Council of the European Union under Article 109f(6) of the Treaty
establishing the European Community (“the Treaty”) and Article 5.3 of the Statute of the EMI (“the
Statute”);
on a Proposal for a Council Regulation (EC) on the European System of National and Regional
Accounts in the European Community (COM(94) 593 final, dated 16th December 1994).
CON/95/7
1. The present consultation was initiated on 28th April 1995 by the Counci l of the European Union
which, for this purpose, transmitted document COM(94) 593 final containing the Proposal for a
Council Regulation (EC) on the European System of National and Regional Accounts in the
European Community (“the proposed Council Regulation”) to the EMI.
2. The purpose of the proposed Council Regulation is to adapt the European System of Integrated
Economic Accounts by providing for (a) a methodology on common standards, definitions,
classifications and accounting rules, referred to as the European System of Accounts 95
(ESA  95), and (b) a programme for transmitting for Community purposes on precise dates the
accounts and tables compiled according to the ESA 95. ESA 95 is given in Annex A and the
transmission programme of national accounts data is specified in Annex B of the proposed
Council Regulation.
3. Amendments to the ESA 95 shall be adopted by Commission Decision in accordance with the
procedure provided for in Article 5 of the proposed Council Regulation, provided that they do not
change the underlying concepts of ESA 95, do not require additional resources for their
implementation and do not cause an increase in own resources in the Community. In addition,
any changes in the data requested from the Member States may also be the subject of
Commission Decisions in accordance with the procedure provided for in Article 5 of the
proposed Council Regulation.
4. The procedure provided for in Article 5 refers to the Statistical Programme Committee (SPC)
established by Council Decision 89/382/EEC, Euratom of 19th June 1989. In addition, according
to Article 4 of the proposed Council Regulation, the SPC shall examine all matters relating to its
implementation that are raised by its chairman, either on his own initiative or at the request of a
Member State. The SPC is composed of representatives of the statistical institutes of the
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Member States and chaired by a representative of the Commission (the Director-General of the
Statistical Office of the European Communities).
According to Article 6 of the proposed Council Regulation, headed co-operation with other
committees, the Commission shall request the opinion of the Committee on Monetary, Financial
and Balance of Payments Statistics (CMFB) established by Council Decision 91/115/EEC of
25th February 1991 on all matters falling within its competence. The CMFB shall be composed
of one, two or three representatives per Member State coming from the institutions principally
concerned with financial, monetary and balance of payments statistics, up to three
representatives of the Commission and up to three representatives of the EMI.
5. The EMI considers the proposed Council Regulation as a major contribution to the establishment
and multilateral surveillance of an Economic and Monetary Union. In addition, the EMI
acknowledges that the ESA 95 is consistent with the System of National Accounts 1993. This
will facilitate comparisons between the economic developments of the European Union, including
the future Monetary Union, and other developed market economies.
6. The EMI welcomes in particular the integration of the concept of Monetary Financial Institutions
(MFIs) for statistical purposes, as defined by the EMI, in the ESA 95 classification of
institutional sectors. Subject to the proviso that the proposed definitions of the Financial
Corporations sector and sub-sectors remain unaltered in the final text enacted by the Council of
the European Union, the ESA 95 will provide the uniform standard for the sector classification of
Monetary Union money and banking statistics. This approach complies with the users
requirements for monetary analysis within a wide and integrated framework and enables also
significant savings to be made in the reporting burden since it avoids divergent classification
standards in the different fields of statistics.
7. The EMI takes also favourably note of the improvements achieved in the methodology of
financial accounts statistics to which several of the National Central Banks (NCBs) have
actively contributed. It supports, in particular, the implementation of financial balance sheets for
the institutional sectors and the integration of measures of money in the financial accounts
statistics, as outlined in the Annex of the ESA 95 financial transactions chapter. Financial
accounts statistics, both balance sheets and flows, may be needed by the European Central Bank
(ECB) in order to assess the effect of monetary policy and the influence of external
developments on the different sectors of the Monetary Union. This includes, in particular,
monitoring the development of sectoral monetary and financial positions and assessing the
working of the transmission mechanism in the Monetary Union. Financial accounts statistics may
also help analysis when disintermediation occurs.
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8. The transm ission programme of the accounts and tables, laid down in Annex B of the proposed
Council Regulation, includes annual financial transactions (table 8) and financial balance sheets
(table 9) of institutional sectors and sub-sectors. Both sets of tables shall be provided
commencing with the year 1999 and shall be available within nine months after the recording
date. In view of the timetable scheduled by the Treaty for the third stage for achieving Economic
and Monetary Union, the EMI would consider that delay in the transmission of financial accounts
statistics based on ESA 95 would not be warranted. The deadline of nine months after the
recording date should be seen as a maximum workable for policy use of these tables.
9. The EMI has strong reservations abo ut the procedure provided for in Article 5 of the proposed
Council Regulation which refers to the SPC only. According to Article 109f (3) of the Treaty
and Article 4.2 of the Statute, the EMI shall, for the preparation of the third stage for achieving
Economic and Monetary Union, promote the harmonisation, where necessary, of the rules and
practices governing the collection, compilation and distribution of statistics in the areas within its
field of competence. The EMI considers financial accounts statistics as one of the statistical
areas, where the EMI and later the ECB should share competence with the Commission, closely
co-operating in a partnership of independent institutions. The reason is that these statistics meet
a variety of policy needs of both the ECB and the Commission. Within the shared competence,
one partner would take the lead in those conceptual questions and in providing instructions for
the collection of those data where it had a clear policy need and expertise.
Furthermore, when financi al accounts statistics based on ESA 95 will have to be reported the
first time by end of September 1999, the European System of Central Banks (ESCB) shall be
well established and shall collect statistical information in accordance with Article 5 of its
Statute. At the same time, in the majority of the Member States of the European Union in which
financial accounts statistics are regularly available, the NCBs are responsible for producing
them. Commission Decisions in accordance with the procedure provided for in Article 5 of the
proposed Council Regulation on changes in the data requested from the Member States are
binding in their entirety upon those to whom they are addressed and these are typically the
NCBs when the changes refer to financial accounts statistics. It is therefore very important to
ensure that these statistical tasks of the ESCB and the Commission are assumed in a coherent
manner.
Against this background, Article 6 of the proposed Council Regulation does not concede the EMI
and the NCBs a sufficient influence on financial accounts statistics. In stage two for achieving
Economic and Monetary Union, the influence would be appropriately strengthened by providing,
in the procedure laid down in Article 5 of the proposed Council Regulation, the CMFB with the
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same status as the SPC on all matters falling within the competence of the CMFB and by
accordingly confining the responsibility of the SPC to all matters not falling within the
competence of the CMFB. This would be deemed sufficient for the EMI to comply with Article
109f (3) of the Treaty and it would provide the NCBs with an appropriate right to a say in the
preparation of Commission Decisions which are binding for them. Moreover, such an
arrangement would comply with the Proposal for a Council Regulation (EC) on Community
action in the field of statistics ( COM(94) 78 final), in particular Articles 1.4 and 8 thereof. It may
require an amendment of Council Decision 91/115/EEC of 25th  February  1991 establishing the
CMFB to enable it to exercise such functions as are attributed to it by acts of the Council in the
field of statistics, in accordance with the procedures laid down by such provisions, in line with
Council Decision 87/373/EEC of 13th July 1987.
Accordingly, the EMI considers that Arti cles 4, 5 and 6 of the proposed Council Regulation
should be modified in order to properly reflect the status of the EMI and the future ESCB in the
area of statistics as laid down in the Treaty and the Protocols annexed to it.
10. The Protocol on the exce ssive deficit procedure annexed to the Treaty defines government
deficit by reference to the ESA. The CMFB advised the Commission on the statistical treatment
of privatisation receipts with government deficit in mind at its meeting on 30th January 1995. The
EMI strongly recommends to incorporate this statistical treatment of privatisation receipts in the
ESA 95. Paragraph 4.165g of the ESA 95 (“Other capital transfers include that part of realised
capital gains (or losses) which is redistributed to another sector”) is inconsistent with the CMFB
advice on the treatment of privatisation receipts and should be deleted.
Furthermore, the discussions on the statistical treatment of debt assumption, initiated by the
CMFB with government deficit in mind, revealed that several paragraphs of the ESA 95 relating
to capital transfers (D.9) are ambiguous when applied on the relationship between general
government and public corporations or quasi-corporations. The EMI urges the Council of the
European Union not to accept any undue ambiguity in the ESA 95 concerning the compilation of
government deficit in view of the excessive deficit procedure as laid down in Article 104c of the
Treaty. The redraft of the ESA 95 section on capital transfers should explicitly state the
borderline between capital transfers (D.9) and transactions in shares and other equity (F.5)
when funds are exchanged between general government and public corporations or quasi-
corporations.
11. Subject to the reservations expressed in paragraphs 9 and 10 above, the EMI welcomes the
proposed Council Regulation.
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12. The EMI has no objection to its opinion being made public.
13. This opinion refers exclusively to the draft Council Regulation as contained in the document
COM(94) 593 final, dated 16th December 1994. In view of its importance for the statistical
activities of the ECB, the EMI requests that the final amended version is submitted for
consultation to the EMI before it is adopted by the Council.
 21st June 1995