Opinion of the European Central Bank of 17 August 2001 at the request of the Commission of the European Communities on two draft Commission Regulations laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for revisions of the harmonised index of consumer prices and minimum standards for the treatment of service charges proportional to transaction values in the harmonised index of consumer prices (CON/2001/18)
Date: 2001-08-17
Institutions: European Central Bank
Subjects: European Central Bank, consumer price, harmonisation of prices, price index

1.9.2001

EN

Official Journal of the European Communities

C 244/5

EUROPEAN CENTRAL BANK

OPINION OF THE EUROPEAN CENTRAL BANK

of 17 August 2001

at the request of the Commission of the European Communities on two draft Commission Regu-
lations laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95
as regards minimum standards for revisions of the harmonised index of consumer prices and
minimum standards for the treatment of service charges proportional to transaction values in the
harmonised index of consumer prices

(CON/2001/18)

(2001/C 244/05)

1. On 10 July 2001 the European Central Bank (ECB) received
two requests
the European
from the Commission of
Communities for an opinion, one concerning the draft
Commission Regulation laying down detailed rules for
the
implementation of Council Regulation (EC) No
2494/95 as regards minimum standards for revisions of
the harmonised index of consumer prices and amending
Commission Regulation (EC) No 2602/2000 (hereinafter
(cid:145)first draft Regulation(cid:146)) and one
referred to as
concerning the draft Commission Regulation laying down
detailed rules for the implementation of Council Regu-
lation (EC) No 2494/95 as regards minimum standards
for the treatment of service charges proportional to trans-
action values in the harmonised index of consumer prices
and amending Commission Regulation (EC) No 2214/96
(hereinafter referred to as the (cid:145)second draft Regulation(cid:146)).

the

2. The ECB’s competence to deliver an opinion is based on
Article 105(4) of
the Treaty establishing the European
Community and Article 5(3) of Council Regulation (EC)
No 2494/95 of 23 October 1995 concerning harmonised
indices of consumer prices. In accordance with the first
sentence of Article 17.5 of the Rules of Procedure of the
European Central Bank, this opinion has been adopted by
the Governing Council of the ECB.

I. First draft Regulation

3. The objective of the first draft Regulation is to establish
minimum standards for the treatment of revisions of the
harmonised index of consumer prices (HICP). Revisions
may have a significant impact on the index result in any
given period and differences in their treatment may affect
the comparability of the HICP.

4. The first draft Regulation states that the officially published
HICP series may be revised (Article 3). It defines conditions
under which revisions are to be reflected in the HICP, that
is in the case of mistakes (Article 4), new or improved
information (Article 5) and the correction of provisional
results in the case that the HICP is published as provisional
(Article 9). The ECB welcomes these proposals.

satisfactory. Possible substantial

5. It also states that the officially published HICP shall not be
revised when changes in the system of harmonised rules
are introduced in the index (Article 6(1)). However, for
monetary policy purposes it is desirable that long and
consistent time series are available. In particular, the ECB
has defined price stability by reference to the year-on-year
change in the HICP. The proposed general rule is therefore
not
statistical changes
could cause structural breaks in the time series and these
could seriously distort the year-on-year changes calculated
using an unrevised base. Therefore,
in cases where
substantial statistical changes are introduced, backward
revisions to the officially published HICP may be necessary.
These revisions should at least cover the 12 months prior
to the
system of
harmonised rules. In practice, however, the ECB is aware
that revisions to historic time series are constrained by the
availability of primary statistics.

introduction of

changes

in the

6. For those cases where revisions of at least the 12 previous
months are necessary in order to compile meaningful
annual rates of change of
the ECB suggests
amending Article 6(1) as follows:

the HICP,

(cid:145)Unless otherwise
specified in implementing regulations,
changes in the system of harmonised rules shall not
require revisions.(cid:146).

A similar clause was included in the draft regulation which
was supported by the Statistical Programme Committee in
afterwards.
March 2001, but which was
Moreover, this amendment would also avoid inconsistency
with Article 11 which explicitly requires revisions for one
specific harmonisation rule
treatment of price
reductions).

removed

(the

7. Articles 6 and 7 define the compilation of estimates for the
impact of changes in the index method. The ECB welcomes
these proposals.

C 244/6

EN

Official Journal of the European Communities

1.9.2001

II. Second draft Regulation

8. The objective of

the second draft Regulation is

to
harmonise the coverage and treatment of service charges
and in particular those charges proportional to transaction
values. The latter were initially excluded from the HICP.
The harmonisation of the different practices will increase
the comparability of the HICP; the current large differences
financial services in the HICP across
in the weight of
the
countries
practices
coverage of
financial services. The ECB welcomes this
further harmonisation effort.

regarding

different

indicate

9. The second draft Regulation details the rules for

the
coverage of financial and other services in the HICP and
follows largely the conventions of the ESA 95 (Articles 4
and 5). The ECB accepts these conventions in order to
ensure consistency with internationally agreed rules for
continued
national accounts. The ECB supports
exclusion of
interest payments and interest-like charges
from the HICP.

the

mining them are to be reflected as such in the HICP
(Article 3(1)(a) and (b)). The ECB welcomes this proposal.

11. The second draft Regulation also requires that changes in
purchaser prices resulting from changes in the values of
the representative unit transactions be shown as such in
the HICP (Article 3(1)(c)). Variations of the values of the
unit transactions are therefore mirrored in the HICP. In
some cases, for example when considering the variation
of the service charges due to the change in the value of
financial assets (e.g. share prices), this requirement may
introduce a source of short-term volatility in the HICP.
However, it is an inevitable consequence of the coverage
of
these consumer services in the HICP and the ECB
therefore accepts this concept.

12. This opinion shall be published in the Official Journal of the

European Communities.

Done at Frankfurt am Main on 17 August 2001.

10. The second draft Regulation requires the HICP to include
charges expressed as a flat fee or flat rate; changes in
purchaser prices reflecting a change in the rules deter-

The President of the ECB

Willem F. DUISENBERG