Proposal for a COUNCIL REGULATION (EC) concerning Harmonised Consumer Price Indices
Date: 1995-01-09
Institutions: European Commission
Subjects: EU Member State, consumer price, harmonisation of prices, price index

COMMISSION OF THE EUROPEAN  COMMUNITIES 

COM(94) 674 final 
Brussels, 09.01.1995 

95/0009 (CNS) 

Proposal  for a 

COUNCIL REGULATION (EC) 

concerning Harmonised Consumer Price indices 

(presented by the Commission) 

Explanatory Memorandum 

1. 

2. 

3. 

4. 

The aim of the draft Regulation is to provide a framework within which 
to develop and compile comparable consumer  price indices (CPIs) for 
Member States. 

Under the Treaty  establishing the  European  Community  (Article  109j) 
the  Commission and the  EMI  are  required to report to the  Council on 
the  progress  made  in  fulfilment  by  the  Member  States  of  their 
obligations  regarding  the  achievement  of  economic  and  monetary 
union.  One criterion of such progress  is a  high degree  of  sustainable 
convergence  in  price  stability  as  apparent  in  the  rate  of  inflation  in 
comparison  with  the  three  best  performing  Member  States.  Inflation 
has  to  be  measured  by  means  of  the  consumer  price  indices  on  a 
comparable basis. 

The CPIs of Member States presently differ  in concepts, methods and 
practices and a  programme of harmonisation is therefore necessary to 
produce  comparable 
indices.  CPIs  are  politically,  socially  and 
economically sensitive statistics and cannot be readily changed. It will 
therefore  be  necessary  to  construct  distinct  CPIs  which  are 
comparable. The indices will be referred to as Harmonised  Consumer 
Price Indices (HCPIs). 

Within  the  framework  of  the  Regulation  guidelines  will  be  drawn  up 
with  Member  States  for  the  construction  of  harmonised  national 
consumer  price  indices  and  proposals  made for the  construction  of a 
Community wide index based on the HCPIs. In doing so due regard will 
be  paid  to  the  primary  purpose  of  the  HCPIs  which  is  to  provide 
comparisons  of  inflation  in  the  macro-economic  and  international 
context. As required  under the Treaty  on European  Union the aim will 
be  to  provide  comparable  measures  of  inflation  taking  into  account 
differences in national definitions. The recommendations will be based 
on the  best of current  practices  allowing for  precedent  and  legal  and 
institutional  circumstances  existing  in  Member  States  and  according 
with the principle of subsidiarity. Proposals should be practicable for all 
Member  States  and  should  involve  minimum  cost  consistent  with the 
required degree of comparability of the indices. 

Proposal  for a 

COUNCIL  REGULATION  (EC) 

The Council of the European Union 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in 
particular Article 213 thereof ; 

Having regard to the proposal from the Commission ; 

Having regard to the opinion of the European Parliament ; 

Having regard to the opinion of the European Monetary Institute^ 

Having regard to the opinion of the Economic and Social Committee ; 

Whereas  Article  109j  of  the  Treaty  establishing  the  European  Community 
requires the Commission and the EMI to report to the Council on the progress 
by  Member  States  in  the  fulfilment  of  their  obligations  regarding  the 
achievement of economic and monetary union in respect of a high degree of 
price stability ; 

Whereas Article  1 of the Protocol  on convergence  criteria  referred to  in the 
said Article  109j  states  that  the  required  sustainable  price  performance  for 
Member  States  should  be  in terms  of  inflation  measured  by  means  of the 
consumer  price  indices  on  a  comparable  basis  ;  and  whereas  existing 
consumer price indices are not compiled on a directly comparable basis ; 

Whereas  there  is  a  need for  the  European  Community  and  particularly  its 
fiscal  and  monetary  authorities  to  have  regular  and  timely  consumer  price 
indices  for  the  purpose  of  providing  comparisons  of  inflation  in the macro-
economic  and  international  context  as  distinct  from  national  and  micro-
economic purposes ; 

Whereas it is recognised that  inflation  is a phenomenon manifesting  itself in 
all  forms  of  market  transactions  including  capital  purchases,  government 
purchases,  payments  to  labour  as  well  as  purchases  by  consumers,  and 
whereas  it  is recognised that  a range of statistics,  of which consumer  price 
indices  form  an  essential  part,  is  relevant  for  a  full  understanding  of  the 
inflationary  process  within  and  between  countries  of 
the  European 
Community; 

3 

Whereas comparable indices of consumer prices may be produced instead of 
or in addition to similar indices of consumer prices already produced or to be 
produced in future by Member States ; 

Whereas the  production of comparable  indices will  involve costs to  be met 
partly by the Commission and partly by Member States ; 

Whereas, according to the  principle of subsidiarity, the creation of common 
statistical  standards  for  consumer  price  indices  is  a  task  that  can  only  be 
dealt with effectively  at Community  level and whereas the collection of data 
and compilation of comparable consumer price indices will be implemented in 
each  Member  State  under  the  aegis  of  the  organisations  and  institutions 
responsible for compiling official statistics at a national level ; 

Whereas  there  will,  in  prospect  of  the  achievement  of  economic  and 
monetary  union,  be  a  need for  a  consumer  price  index  for  the  European 
Community as a whole; 

Whereas  the  Statistical  Programme  Committee  (SPC),  established  by 
Council Decision 89/382/EEC1, has reached a favourable conclusion on the 
draft Regulation, 

HAS ADOPTED THIS REGULATION : 

Article 1 - Aim 

The aim of this Regulation is to establish  Community statistics on  consumer 
prices as follows: 

Each Member State shall produce a comparable consumer price index 

(1) 
hereinafter  referred  to  as  the Harmonised  Consumer  Price Index of the 
Member State (HCPI). 

The Commission  (Statistical  Office  of the European  Communities  -

(2) 
Eurostat hereinafter) shall produce a Consumer Price Index for the European 
Community  based on  the HCPIs of  the  Member  States and  hereinafter 
referred to asthe European Consumer Price Index (ECPI). 

(3) 
The Commission (Eurostat) shall produce a Consumer Price Index for 
the European Monetary Union based on the HCPIs of Member States without 
a  derogation  under Article  109k of the Treaty,  hereinafter referred to as  the 

1 

O.J. No. L 181 of 28.06.1989 

Monetary Union Consumer Price Index (MUCPI),  as long as there are any 
such derogations. 

Article 2 - Scope 

The scope of this Regulation shall be the actual prices of goods and 
services available for purchase in the economic territory of the Member State 
for  the purposes of  the direct satisfaction  of individual  consumer needs or 
wants and the associated quantities actually purchased for such purposes. 

Article 3 - Comparability Requirement 

HCPIs shall be  considered  to  be  comparable  if they  reflect only 
differences in  price  changes or  consumption  patterns between  countries. 
HCPIs which differ on  account of  differences  in  the concepts,  methods  or 
practices used in  their definition and  compilation  shall  not  be  considered 
comparable.  The Commission (Eurostat), following the procedure described in 
Article 14,  shall set down rules to be followed to ensure the comparability of 
HCPIs and notably where the difference  between  the effect on the  annual 
change in the aINtems HCPI of a particular concept,  method or practice and 
the effect of its alternatives is more than one tenth of one percentage point. 

Article 4 - Timetable and Derogations therefrom 

The  measures necessary to  achieve comparable consumer  price 

(1) 
indices shall be implemented in a staged process, as follows : 

(a)  Stage I : 

By March 1996 at the latest,  the Commission (Eurostat) shall,  in 
collaboration  with Member States,  produce for the purposes of 
the report referred to in Article 109j of the Treaty ("convergence 
criteria")  an  interim  set  of  consumer price  indices  for  each 
Member State.  These indices shall  be  based  wholly on data 
underlying existing national consumer price indices,  but adjusted 
as follows: 

i) 

to exclude owner-occupied housing 

ii) 

to exclude health and educational services 

S 

Hi)  to  exclude  certain  other  items  not  covered  or  treated 

differently by a number of Member States. 

(b)  Stage II: 

The HCPI shall start with the index for January 1997 and shall 
provide estimates  of price changes  relative  to a common  index 
reference period. Estimates of  price  changes for  the  twelve 
months  to January 1997 and subsequent months  shall also be 
provided. 

(c)  Stage III: 

By January 1998 Member States shall implement the full range of 
measures referred to in Article 13. 

(2)  Where necessary the Commission  (Eurostat) may,  on request from a 
Member State and after consulting  the European  Monetary Institute,  grant 
derogations from the provisions  of paragraph  (1) not exceeding  a period of 
one year insofar as the Member State's statistical system on consumer prices 
in the scope of this legal act requires significant adaptation. 

Article 5 - Information required 

The information required in practice shall be those prices and values 

of goods and services within scope,  which it is necessary to take into account 
in order to achieve comparable HCPIs as defined in Article 3. 

Article 6 - Observation 

The price  and  weighting data used  to  compile the  HCPI shall be 
collected directly by  surveys  of  statistical units  (Council Regulation No. 
696/93 of  15 March 1993)2 or indirectly  from other sources subject to the 
condition that  the  resulting HCPIs meet  the  comparability  requirement  of 
Article 3. 

O.J. No. L 76/1 30.03.1993 

Article 7 - Sources 

The statistical units called upon by Member States to cooperate in the 

collection  or provision  of price data shall be obliged to allow observation  of 
the prices actually charged and to give honest and complete  information  at 
the time it is requested. 

Article 8 - Frequency 

(1) 

The HCPI shall be compiled each  month. 

The required frequency of price collection is once each month.  Where 

(2) 
less frequent collection  does not  result in  the failure to produce an HCPI 
meeting the comparability requirement the Commission (Eurostat) may allow 
exceptions to monthly collection. 

The weights of the HCPI shall be updated at a frequency sufficient to 

(3) 
meet the comparability requirement. 

Article 9 - Production of Results 

Member States shall process the data collected in order to  produce 

the HCPI in the detailed categories listed in Annex I (adapted as necessary to 
meet the purposes of constructing comparable HCPIs) according to methods, 
procedures and formulae,  which,  following the procedure laid down in Article 
14, are designed to meet the comparability requirement 

Article 10 - Transmission of Results 

Member States shall transmit to the Commission (Eurostat) the results 

(Article 9) within  a period which  shall not exceed 30 days of the end of the 
calendar month to which the  indices relate. 

Article 11 - Publication 

The HCPI,  the ECPI,  the MUCPI and corresponding sub-indices for a 
set of categories within those laid down under Article 9 shall be disseminated 
in  mutual co-operation  between national authorities and  the  Commission 

* 

(Eurostat)  and shall be published  within a period which shall not exceed  5 
working days from the end of the period referred to in Article 10. 

Article 12 - Quality Control 

Member States shall provide the Commission (Eurostat) at its request 
with information, including such data collected pursuant to Article 5 as may be 
confidential,  to evaluate  compliance  with the comparability requirement  and 
the quality of the HCPIs. 

Article 13 - Consultation 

The measures for  implementing  the  present Regulation,  including 

(1) 
measures  for adaptation  to economic  and technical  developments,  shall be 
laid  down  by  the  Commission  (Eurostat) following consultation with  the 
Statistical Programme  Committee  (hereinafter referred to as the  Committee) 
set  up  by  Council  Decision  89/382/EEC, Euratom,  and  the European 
Monetary Institute in accordance with the procedure specified in Article 14. 

(2) 
The measures in paragraph (1) shall be limited to those which do not 
involve significant additional resources in any Member State unless agreed by 
the  Member  States  concerned  or  unless  the  Commission  (Eurostat) 
undertakes to meet two thirds of the additional costs up to the end of the first 
two years after implementation. 

Article 14 - Procedure 

The representative of the Commission shall submit to the Committee a 
(1) 
draft of the measures to be taken.  The Committee shall deliver its opinion on 
this draft within a  time limit which the Chaimnan  may set in the light of the 
urgency of the matter in hand.  The opinion shall be delivered by the majority 
laid  down  in  Article  148(2)  of  the  Treaty  establishing the European 
Community for Decisions which the Council of the European Union is required 
to adopt on a proposal from the Commission.  When the Committee votes,  the 
weightings laid down in the above-mentioned Article  shall be applied  to the 
votes of the representatives  of the Member States. The Chairman  shall not 
take part in the vote. 

X 

The  Commission shall  adopt  measures  that  are  immediately 

(2) 
applicable.  However,  if they do not accord with the opinion  delivered by the 
Committee, these  measures shall  be  immediately communicated  by  the 
Commission to the Council, in which case the Commission shall postpone the 
application of the measures it has adopted by three months from the date of 
such communication. 

The  Council, acting by  a  qualified majority,  may  adopt a different 

(3) 
Decision within the time limit laid down in paragraph 2. 

Article 15-Review 

The Commission (Eurostat) shall,  after consulting the Committee,  and 

within two years of the date of entry into force and again within two  years 
thereafter,  submit a report to the Council on the HCPIs constructed pursuant 
to  this  Regulation, and in  particular in  respect of  their  reliability and the 
application of the comparability requirement. 

Article 16 - Entry into force 

This regulation shall enter into force on  the  20th  day  following 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. 

Annex I 

Proposal  for a 

COUNCIL  REGULATION  (EC) 

concerning Harmonised Consumer Price Indices 

Classifications of individual consumption by purpose 

from which component indices of the HCPI to be compiled 

will be determined 

K> 

1.  FOOD, BEVERAGES AND  TOBACCO 

1.1. 
1.1.1. 
1.1.2. 
1.1.3. 
1.1.4. 
1.1.5. 
1.1.6. 
1.1.7. 

1.1.8. 

1.1.9. 
1.1.10. 

1.1.11. 

1.2. 
1.2.1. 
1.2.2. 
1.2.3. 

Food 
Bread and cereals 
Meat 
Fish 
Milk, cheese and eggs 
Oils and fats 
Fruit 
Vegetables other than potatoes 
and other tubers 
Potatoes, manioc and other 
tubers 
Sugar 
Jam,  honey, chocolate and 
confectionery 
Salt, spices, sauces and food 
products n.e.c. 

Beverages1 
Coffee, tea, cocoa 
Other non-alcoholic  beverages 
Alcoholic  beverages 

1.3. 

Tobacco 

2.1. 
2.1,1. 
2.1  2. 
2.1.3. 

2.1.4. 

2.2 
2.2.1. 
2.2.2. 

3. 

3.1 
3.1 1. 
3.1.2. 

3.1.3. 

3.2. 

3.2.1. 

3.2.2. 

CLOTHING AND  FOOTWEAR 

Clothing 
Clothing  materials 
Garments 
Other articles of clothing and 
clothing  accessories 
Repair and hire of clothing 

Footwear 
Shoes and other footwear 
Repairs to footwear 

HOUSING, WATER, 
ELECTRICITY,  GAS AND 
OTHER  FUELS 

Gross rents2 
Rents actually  paid by tenants3 
Imputed rents of owner 
occupiers 
Other actual or book rents 

Regular maintenance  and 
repair of the  dwelling 
Products for the  regular 
maintenance  and repair of the 
dwelling 
Services for the  routine 
maintenance  and repair of the 
dwelling 

Imputed rents of owner occupiers  : excluded. 

1  For home consumption. 
2 
3  Distinguishing  private  from 
rents. 

local  authority 

3.3. 

3.3.1. 

3.3.2. 

3.3.3. 

3.4. 

3.4.1. 
3.4.2. 
3.4.3. 
3.4.4. 

4.1. 

4.1.1. 

4.1.2. 

4.1.3. 

4.2. 

4.3. 

4.3.1. 
4.3.2. 

4.3.3. 

4.4. 

4.5. 

4.5.1. 
4.5.2. 

4.6. 

4.6.1. 
4.6.2. 
4.6.3. 

Other services relating to the 
dwelling 
Refuse disposal and sanitary 
services 
Insurance in respect of the 
dwelling 
Water supply 

Electricity, gas and other 
fuels 
Electricity 
Gas 
Liquid fuels 
Other fuels 

FURNISHINGS,  HOUSEHOLD 
EQUIPMENT AND  ROUTINE 
MAINTENANCE  OF THE 
HOUSE 

Furniture, furnishings  and 
decorations, carpets and 
other floor coverings  and 
repairs 
Furniture, furnishings and 
decoration 
Carpets and other floor 
coverings 
Repair of furniture, furnishings, 
decorations, carpets and other 
floor  coverings 

Household textiles 

Heating and  cooking 
appliances, refrigerators, 
washing machines and 
similar major  household 
appliances, including fittings 
and  repairs 
Electric  household  appliances 
Non-electric  household 
appliances 
Repair of household  appliances 

Glassware, tableware  and 
household  utensils 

Tools and eguipment for the 
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 
Home care services  excluding 
domestic  service 

5. 

5.1. 

5.1.1. 
5.1.2. 
5.1.3. 

5.2. 

5.2.1. 
5.2.2. 
5.2.3. 
5.2.4. 
5.2.5. 

5.3. 
5.3.1. 
5.3.2. 

5.3.3. 

5.3.4. 
to 
5.3.5. 

5.4. 

5.4.1. 

5.4.2. 

HEALTH 

Medical and  pharmaceutical 
products and  therapeutic 
appliances and  equipment 
Medicines 
Other pharmaceutical  products 
Therapeutic appliances and 
equipment 

Non-hospital medical  and 
paramedical  services 
Services of physicians 
Dentistry 
Medical analyses 
Services of medical auxiliaries 
Other non-hospital services 

Hospital  services 
Basic hospital services 
Medical services for  hospitalised 
persons 
Medical analyses for 
hospitalised persons 
Services  of  medical  auxiliaries 
hospitalised persons 
Food and drink for hospitalised 
persons 

Sickness and  accident 
insurance  services 
Private sickness and accident 
insurance services 
Public sickness and accident 
insurance services 

6. 

TRANSPORT 

6.1. 
6.1.1. 
6.1.2. 

6.2. 

6.2.1. 
6.2.2. 
6.2.3. 
6.2.4. 

6.3. 
6.3.1. 
6.3.2. 
6.3.3. 

7. 

Purchase  of  vehicles 
Motorcars 
Cycles and motor cycles 

Operation  of  personal 
transport  equipment 
Spare parts and accessories 
Fuels and lubricants 
Maintenance and repairs 
Other services in respect of 
personal transport  equipment 

Transport  services 
Local transport 
Long-distance transport 
Removals and furniture storage 

LEISURE,  ENTERTAINMENT 
AND CULTURE4 

7.1. 

7.1.1. 

7.1.2. 

7.1.3. 
7.1.4. 
and 
7.1.5. 
sport, 
7.1.6. 
and 
7.1.7. 
7.1.8. 

7.2. 

7.2.1. 

7.2.2. 

7.3. 

7.3.1. 
7.3.2. 

7.3.3. 

8. 

8.1. 
8.1.1. 

8.1.2. 
8.1.3. 
8.1.4. 

8.2. 

8.3. 
8.3.1. 

8.3.2. 
8.3.3. 
8.3.4. 

9. 

9.1. 
9.1.1 

Equipment and accessories, 
including  repairs 
Equipment for the reception, 
recording and reproduction of 
sound and pictures 
Photographic and 
cinematographic  equipment, 
optical  instruments 
Data processing equipment 
Other  major durables  for  leisure 
culture 
Games and toys  ; equipment  for 
camping and open-air recreation 
for  pictures 
Recording  media 
sound 
Gardening and pets 
Repair of equipment and 
accessories for leisure and 
culture 

Recreational and  cultural 
services 
Group recreational and cultural 
services 
Other recreational and cultural 
services 

Newspapers, books  and 
stationery 
Books 
Newspapers and  miscellaneous 
printed matter 
Stationery and drawing 
materials 

EDUCATION 

Educational  services 
Pre-primary and primary 
education 
Secondary education 
Education at the third level 
Education not defined by level 

Educational  materials 

Ancillary educational  services 
School canteens and university 
refectories 
Accommodation  services 
Health care services 
Other ancillary educational 
services 

' 

HOTELS, CAFES AND 
RESTAURANTS 

Catering 
Restaurants and cafés5 

4  The  classification  of  package 
expenditure to be decided 

holiday 

Distinguishing meals out from drinks out. 

12. 

9.1.2. 

Canteens 

9.2. 

10. 

10.1. 
10.1.1. 

10.1.2. 

10.1.3. 

10.2. 
10.2.1. 
10.2.2. 

10.3. 
10.3.1. 
10.3.2. 

10.4. 
10.4.1. 

10.4.2. 

10.5. 

10.6. 

Accommodation services 

MISCELLANEOUS GOODS 
AND SERVICES 

Personal care 
Hairdressing salons and 
personal grooming 
establishments 
Electrical appliances for 
personal care 
Other articles for personal care ; 
toiletries 

Personal effects n.e.c. 
Jewellery, clocks and watches 
Other personal effects 

Communications 
Postal services 
Telephone and telegraph 

Social services 
Social welfare with 
accommodation 
Social welfare without 
accommodation 

Financial services n.e.c. 

Other services n.e.c. 

IS 

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Council Regulation concerning the Harmonisation of Consumer Price Indices. 

2.  BUDGET HEADING INVOLVED 

Sub-section B-3 - Price comparisons. B5-600. 
Chapter B5-60. 
Article B5-600. 

3.  LEGAL BASIS 

- Article 213 of the Treaty 
- Treaty on European Union 
[- Council Decision 89/382/EEC] 

4.  DESCRIPTION OF OPERATION 

4.1  Specific objectives of operation 

The aim of the Regulation is to expedite the programme of work leading to 
comparable  indices  of  consumer  prices.  It  will  provide  a  framework  for 
subsequent  detailed  Commission  regulations  requiring  Member  States  to 
produce  a  Harmonised  Consumer  Price  Index  (HCPI)  following  concepts 
methods and practices which have been proposed by the Working Party on CPI 
Harmonisation and approved by the Statistical Programme Committee following 
the Regulatory Committee procedure. 

4.2  Duration 

The draft Regulation requires a three stage implementation of progressive 
harmonisation.  The  first  in  March  1996  involving  minimal  resources  will  be 
based almost entirely on existing CPIs. The second by January  1997 will also 
involve only limited computational changes. The third, by January 1998 is likely 
to require considerable resources. 

5.  CLASSIFICATION OF EXPENDITURE OR REVENUE 

DNO;CD. 

^ 

6. TYPE OF EXPENDITURE OR REVENUE 

- 

100% subsidy 
Not applicable. 

Subsidy  for joint  financing  with  other sources  in the public  and/or private 
sector 
Not applicable. 

Interest subsidy 
Not applicable. 

-  Other 

Not applicable. 

Should the operation prove an economic success,  is there provision  for all 
or part of the Community contribution to be reimbursed ? 
Not applicable. 

Will the proposed operation cause any change in the level of revenue  ?  If 
so,  what sort of change and what type of revenue is involved ? 
Not applicable. 

7.  FINANCIAL  IMPACT  ON  APPROPRIATIONS  FOR  OPERATIONS  (PART  B 

OF THE BUDGET) 

7.1  Method of calculating total cost of operation 

The  proposal  is  for  a  framework  Regulation  which  does  not  commit 
Member States to any action or expense beyond that of continued participation 
in  discussions  leading  to  Commission  Regulations  for  producing  consumer 
price  indices  on  a  comparable  basis. Article  13 states  that  such  Regulations 
shall not involve Member States in significant extra costs unless they agree or 
unless the Commission undertakes to meet two thirds of  such costs up to the 
end of the first two years of  implementation. The  actions  required to  produce 
comparable  CPIs  and  their  costs  will  be  determined  in  consultation  with 
Member  States  and  arrangements  for  meeting  such  costs  settled  before  the 
Commission Regulations are adopted. 

7.2  Allocation 

The  Regulation  does  not  per  se  involve  any  costs  above those  already 
provided  for 
in  ligne  B5-600.  The  costs  of  sub-sequent  Commission 
Regulations  cannot  be  estimated  until  the  necessary  steps  to  achieve 
comparable CPIs are determined. 

7.3  Indicative schedule of commitment and payment appropriations 
Operational expenses for consultancy studies, meetings of experts, etc. 

te 

Allocation 

-  Studies 
- Expert meetings 
- Conferences  and 
congresses 
- Information and 
publications 

TOTAL 

94 Budget 

95APB 

Var. in % 

-

-

-

-

8.  ANTI-FRAUD MEASURES  PLANNED 

Statistical  data  are  regarded  as  an  objective  instrument  of  evaluation  of  the 
Community  action  programmes  and thus  contribute  to  the  consolidation  of  the 
anti-fraud mechanism. 

Checks  on  subsidies  or  benefits,  studies  of  feasibility  and  evaluations  are 
carried  out  by  the  Commission  departments  before  payment,  taking  into 
account  the  contractual  obligations,  the  principles  of  economy  and  sound 
overall  financial  management.  Anti-fraud  provisions  (control,  handing-over  of 
reports,  etc.)  are  included  in  all  the  agreements  or  contracts  concluded 
between the Commission and the recipients of payments. 

9.  ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1  Objectives and coherence with financial  programming 

Specific objective(s) of proposed operation. 

March 1996 

January  1997 
Mid-1997 
January  1998 
End 1999 

- 

- 
- 
- 
- 

Stage 1. Implementation  Draft 
Commission  Regulation 
Stage 2.  Implementation 
Review : Stages 1 + 2 
Stage 3. Implementation complete 
Review" 

Is the operation incorporated in the financial programming  of the DG for 
the years  concerned ? 
Yes.  But  the  later  Commission  Regulations,  defining  what  has  to  be 
implemented, are not. 

To which  broader  objective  defined  in  the  DG's  financial  programming 
does the objective of the proposed operation correspond ? 
The  sectoral  programmes  for  the  Economic  and  Monetary  Union; 
economic  and financial  accounts  ; the  statistics  of the  public  sector,  of 
the  balance  of  payments  ;  the  indicators  of  co-ordination  of  the 
monetary policy and of the ECU; the data of foreign trade. 

I(? 

9.2  Grounds for the operation 

Reasons  for choosing  this  operation  rather than an alternative  which 
would achieve the same objectives.  The justification must be based on 
three criteria : 

(a)  cost 

The  proposed  Regulation  commits  Member  States  to  the 
Programme of harmonisation at negligible cost. 

(b)  spin-off effect (impact beyond the specific objective(s)) 
The Regulation should lead to changes in the CPIs of Member 
States, some of which will  be  improvements  in  methods  and 
practices. 

(c)  multiplier effect (ability to mobilise other sources of finance) 
The  Regulation  and  subsequent  Commission  Regulations 
should  lead  to  a  sharing  of  expertise  and  technological 
applications on CPI compilation between Member States. 

9.3 Monitoring and evaluation of the operation 

Performance indicators selected 
Performance will be judged against the timetable at 9.1.1 above. 

Details and frequency of planned evaluation 
The  Regulation  provides  for  a  review  at  mid-1997  and  again  at  end 
1999. 

Main factors of uncertainty which could affect the specific results of the 
operation. 
If the 1996 Intra-governmental Conference changes the EMU timetable, 
MSs may be more reluctant to adhere to the timetable in 9.1 above. 

10. ADMINISTRATIVE EXPENDITURE (part A of the budget) 

10.1 Will  the  proposed  operation  involve  an  increase  in  the  number  of 

Commission staff ? If so, how many ? 
Yes.  Two  additional  officials  A  grade  and  C grade.  The  former  to  start 
early 1995 and the latter early 1996. 

The allocation of one A grade official to start in early 1995 will depend on 
the Commission decision on allocation of resources. 

The allocation of one C grade official to start in 1996 will depend both on 
the results of the  budgetary  procedure  and on the  Commission  decision 
on allocation of resources. 

t? 

10.2  Indicate the  amount  of staff  and administrative  expenditure  involved 

in the proposed operation. Explain the method of calculation. 
Base : average cost of a post. 

Level A7 
Level C3 

93.000 Ecus per annum 
70.000 Ecus per annum 

Functionnaires 

Ecus 

1995 
1996 
1997 

93.000 
163.000 
163.000 

IK 

Statement of impact of the proposal on industry 
and in particular on small and medium enterprises 

Title : 

COUNCIL REGULATION CONCERNING THE HARMONISATION OF 
CONSUMER PRICE INDICES 

The proposal 

1.  The  proposal  is  that  Member  States  should  produce  comparable  consumer 

price indices based on existing consumer price indices. 

Impact 

The  proposed  Regulation  is  a  framework  Regulation  directly  affecting  only 
national statistical offices. The Regulation does, however, give the latter power 
to require enterprises to respond to demands for  price and sales data should 
this be required as a result of subsequent Commission Regulations. Since the 
harmonised  CPIs  will  be  based  on  the  existing  CPIs  and  the  data  used  to 
compile these any additional burden on enterprises is likely to be minimal. 

Consultation 

3.  The  UNICE  and  the  principal  European  Employer  Federations  have  been 

informed by means of projects of this proposed Regulation. 

tci 

Complementary Statement concerning EFTA Countries 

Title : 

COUNCIL REGULATION CONCERNING THE HARMONISATION OF 
CONSUMER PRICE INDICES 

Impact on EFTA countries 

EFTA  countries  have  been  involved  in  discussions  of  the  Statistical  Programme 

Committee and the Working Party on the Harmonisation 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. 

2o 

ISSN 0254-1475 

COM (94) 674 final 

DOCUMENTS 

EN 

17 

Catalogue number : CB-CO-94-700-EN-C 

ISBN 92-77-84359-4 

Office for Official Publications of the Europeaa Communities 
Lr2985 Luxembourg