Opinion of the European Central Bank of 11 October 2001 at the request of the Council of the European Union concerning a proposal for a Regulation of the European Parliament and of the Council concerning the labour cost index (CON/2001/33)
Date: 2001-10-11
Institutions: European Central Bank
Subjects: drafting of EU law, labour force, wage cost, wage indexing

20.10.2001

EN

Official Journal of the European Communities

C 295/5

EUROPEAN CENTRAL BANK

OPINION OF THE EUROPEAN CENTRAL BANK

of 11 October 2001

at the request of the Council of the European Union concerning a proposal for a Regulation of the
European Parliament and of the Council concerning the labour cost index

(CON/2001/33)

(2001/C 295/04)

1. On 17 September 2001, the European Central Bank (ECB)
received a request from the Council of the European Union
for a Regulation of
for an opinion on a proposal
the
European Parliament and of
the Council concerning the
labour cost index (hereinafter referred to as the (cid:145)draft regu-
lation(cid:146)).

2. The ECB’s competence to deliver an opinion is based on the
first indent of Article 105(4) of the Treaty establishing the
European Community. In accordance with the first sentence
of Article 17.5 of the Rules of Procedure of the ECB, this
opinion has been adopted by the Governing Council of the
ECB.

3. The objective of

the draft regulation is to establish a
common framework for the production, transmission and
evaluation of
in the
Community. In particular, the draft regulation requires the
transmission of quarterly data on labour costs to the
European Commission (Eurostat) by the Member States.

comparable

indices

labour

cost

4. The ECB welcomes the draft regulation, which is part of the
action plan on economic and monetary union (EMU) stat-
istical requirements (hereinafter referred to as (cid:145)EMU action
plan(cid:146)), established at the request of the Ecofin Council by
the Commission (Eurostat) in close collaboration with the
ECB. The EMU action plan is a response to the report of the
Monetary Committee on information requirements in EMU,
endorsed by the Ecofin Council on 18 January 1999, and
the first two progress reports on information requirements
in EMU drawn up by the Economic
and Financial
Committee. The third progress report, endorsed by the
Ecofin Council on 19 January 2001, also specified the
timetable for modifying existing statistical regulations.

5. The provision of harmonised data on labour costs broadens
and deepens
the analysis and
the data available for
assessment of risks to price stability as carried out under
the second pillar of the ECB’s monetary policy strategy.
Labour costs are a major element of production costs for
the economy as a whole and have a significant impact on
price formation. In addition, labour costs provide input for
indicators of competitiveness. The European aggregate data

statistical

institutes,

on labour costs currently available, based on data trans-
voluntarily by
mitted to the Commission (Eurostat)
national
significant
the
reflect
differences in the definition of the national series used for
the euro-zone series calculation. Quarterly compensation
data available from the ESA 95 national accounts are not
a substitute, as they are insufficient in terms of detail and
their quality depends on the quality of
the underlying
primary labour cost statistics.

6. The ECB wishes to highlight the importance it attaches to
several features of the draft regulation, which are already
part of the EMU action plan, while also recognising that the
need to limit
the reporting burden for enterprises has
required significant compromises to be made.

(a) The proposed NACE Rev. 1 coverage including the
services sector: the draft regulation covers over 90 %
of euro-zone employment whereas at present the data
provided only cover around 65 %. This is an important
improvement as it means a better understanding of the
development of labour costs throughout the economy
with, in particular, improved coverage of service sector
costs.

(b) The proposed NACE Rev. 1 breakdown: the draft regu-
lation increases the level of detail of data required,
broken down by
activities, which is
economic
important to explain changes in the overall results.

and

(c) The availability of an index of

labour costs both
including
excluding bonus payments: bonus
payments tend to be a cyclical element of the overall
labour costs. The analysis of data on labour costs will be
greatly facilitated if
is possible to distinguish this
element of overall labour costs.

it

(d) The proposed requirement that data be provided within
70 days: this would be an improvement as the current
availability of labour cost data is extremely poor with
first European aggregate estimates available only after
approximately 100 days.

C 295/6

EN

Official Journal of the European Communities

20.10.2001

(e) The availability of an appropriate amount of back data:
it is important for analytical purposes to be able to
assess labour cost indices over time. However, the ECB
also recognises the burden which would be imposed on
Member States if required to provide a full set of back
data and hence supports limiting transmission of back
data to a selected number of labour cost items and for
NACE sections C-K only.

(f) The improved comparability of data necessary for good
euro-zone aggregates: as Member States would still be
allowed to use a combination of different sources, the
implementing procedures mentioned in Article 10 might
usefully include a periodic assessment of the impact of
their use on national results, and of other potential
sources of non-comparability.

7. The ECB strongly supports the proposed timetable for the
the draft regulation and calls on the

implementation of

extent

possible,

to request derogations.

If Member
Member States not
States took advantage of the derogations allowed to the
fullest
European
fully
aggregates
for NACE sections C-K would not become
available until 2004 and complete European aggregates
including NACE sections L-O would not become available
until 2007. Even the target of 80 % coverage of
the
euro-zone by the end of 2002 (cid:151) a target supported by
the Ecofin Council (cid:151) could be put at risk.

harmonised

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

European Communities.

Done at Vienna on 11 October 2001.

The President of the ECB

Willem F. DUISENBERG