Opinion of the European Monetary Institute on a consultation from the Commission of the European Communities under Article 5(2) of Council Regulation No. 2494/95 of 23 October 1995 on a proposal by the Commission to grant a derogation from the initial implementing measures required under Commission Regulation No. 1749/96 concerning harmonised indices of consumer prices (HICP) to Denmark (CON/97/01)
Date: 1997-02-07
Institutions: European Monetary Institute
Subjects: Denmark, consumer price, derogation from EU law, price index

7 February 1997

OPINION OF THE EUROPEAN MONETARY INSTITUTE

on a consultation from the Commission of the European Communities under Article 5(2) of

Council  Regulation  No.  2494/95  of  23  October  1995  on  a  proposal  by  the  Commission  to

grant  a  derogation  from  the  initial  implementing  measures  required  under  Commission

Regulation  No. 1749/96  concerning  harmonised  indices  of  consumer  prices  (HICP)  to

Denmark

CON/97/01

1. 

In  a  letter  dated  16 January 1997  from  Mr. Franchet,  Director  General  of  Eurostat,  the

Commission  consulted  the  EMI  on  the  derogation  requested  by  Denmark  from  Commission

Regulation No. 1749/96.

2. 

Article 5(2) of the Council Regulation on HICPs provides for the mandatory consultation of the

EMI where the Commission is asked to grant a derogation. The present consultation relates to

HICPs  starting  from  January  1997.  The  EMI  underlines  the  importance  of  a  more  timely

submission of requests for derogations.

3. 

Article 5(2) of Council Regulation No 2494/95 enables a Member State to claim a derogation not

exceeding  a  period  of  one  year  where  it  has  to  make  “significant  adjustments”  to  its  statistical

system. The EMI welcomes the considerable efforts undertaken by the Member States in order

to  improve  the  comparability  of  consumer  price  statistics.  The  EMI  underlines  the  need  to

minimise  claims  for  derogations,  since  each  derogation  granted  reduces  the  progress  in

comparability  of  HICPs  at  a  time  which  is  critical  in  the  move  to  the  final  stage  of  Monetary

Union.

4. 

Against  the  background  of  the  tight  timetable  for  the  introduction  of  HICPs,  the  EMI  also

emphasises the importance of the timely implementation of all required changes to the statistical

system. In this context it points to the fact that Commission Regulation No. 1749/96 was enacted

by  the  Commission  on  9 September  1996  and  that  the  contents  of  the  draft  Regulation  were

approved  by  the  Statistical  Programme  Committee  at  its  meeting  in  December  1995,  i.e.  more

than one year before the first HICPs were to be calculated.

 
 
 
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5. 

Denmark  seeks  the  granting  of  a  derogation  from  Article  7  of  Commission  Regulation

No.  1749/96,  which  introduces  two  comparable  formulae  for  calculating  price  indices  for

elementary  aggregates.  The  formula  used  by  Denmark  does  not  fulfil  the  above  comparability

requirement  and  is  expected  to  lead  to  systematically  higher  price  indices.  This  is  why  the

Commission Regulation requires that it should normally not be used. Given the potential impact

on  the  comparability  of  HICPs,  the  EMI  strongly  supports  the  preconditions  proposed  by  the

Commission  for  granting  a  derogation,  which  are  to  limit  the  derogation  to  August  1997  and  to

apply the change in formula retrospectively to January 1997 at that date.

6. 

The  EMI  agrees  that  this  opinion  may  be  made  public  by  the  competent  authorities  at  their

discretion.