WRITTEN QUESTION E-2895/01 by Pere Esteve (ELDR) to the Commission. Miscalculation of GDP in the Balearic Islands.
Date: 2001-10-22
Institutions: European Parliament, Provisional data
Subjects: Balearic Islands, EU investment, economic indicator, evaluation method, gross regional product

C 172 E/18

Official Journal of the European Communities

EN

18.7.2002

(2002/C 172 E/019)

WRITTEN QUESTION E-2895/01

by Pere Esteve (ELDR) to the Commission

(22 October 2001)

Subject: Miscalculation of GDP in the Balearic Islands

Normally, the level of production of a given region is, to a great extent, reflected in the income level of
local habitants, so that the GDP is habitually employed as an indicator of income. A study submitted to the
Parlament de les Illes Balears by two professors from two different universities has highlighted permanent
errors in the way the Balearic Islands’ regional GDP is calculated; this means that in this instance, GDP and
income do not correspond.

The study shows that GDP per head of population overestimates officially resident Balearic families’
incomes.

There are basically four factors involved:

(a)

transfers of income generated by work and by capital to the rest of Spain;

(b) use of the Spanish CPI instead of the CPI of the Autonomous Community;

(c)

transfers of work and capital-generated income abroad;

(d)

the under-registration of the population, which has grown very sharply in recent years.

The conclusion is that the deviation of the Balearic GDP is somewhere between 12 % and 15 %. For
example, taking into account only the ‘loss’ of Balearic GDP which would arise from correcting mistake (a)
above, the Balearic Islands would cease to occupy the 86th place amongst Europe’s 206 regions and move
to the 128th place as far as GDP classification is concerned. Once of the consequences of the miscalculation
is that it may have put a brake on public investment in the region.

GDP is used as the indicator for the allocation of many EU funds. The Balearic Islands, as the most recent
studies have shown, may be suffering from an over-estimated GDP. EU public investment in the area may
and could have been adversely affected.

Given the situation:

; what is the Commission’s view of these facts? Does the Commission believe that the mistakes in

calculating GDP could have affected EU investment in the Balearic Islands?

; Secondly, given that the EU regularly uses GDP as the basis of its public investment, and taking the
special case of the Balearic Islands into account, with their ‘monodependency’ on tourism which
appears to be one of the causes of the miscalculation of GDP, does the Commission intend to use
other means of calculating the region’s wealth? If not, would the Commission agree to provide the
Balearic Islands with economic compensation?

Answer given by Mr Solbes Mira on behalf of the Commission

(17 December 2001)

The Commission takes note of the various remarks made by the Honourable Member concerning the
calculation of the regional gross domestic product (GDP) and would like to resume two methodological
aspects referring to this calculation.

income of local

inhabitants are two different indicators, that are
Firstly, regional GDP and regional
equivalent only in very special circumstances. While they may be the same at a national level, at a regional
level they virtually never are. GDP is not synonymous with the income ultimately available to private
households resident in a country or a region. This fact is explicitly mentioned in the methodological notes
of Eurostat publications. Therefore, it cannot be concluded that if ‘GDP and income do not correspond’
that the GDP figure has been incorrectly calculated ; because GDP and income are two different things.

18.7.2002

EN

Official Journal of the European Communities

C 172 E/19

Secondly, the Honourable Member recalls four explanation factors:

(a)

transfers of income generated by work and by capital to the rest of Spain;

(b) use of the Spanish CPI instead of the CPI of the Autonomous Community;

(c)

transfers of work and capital-generated income abroad;

(d)

the under-registration of the population, which has grown very sharply in recent years.

In commenting on these points, it should be noted that none of the first three issues raised (a, b and c) are
of relevance for regional GDP. While the fourth point could have a bearing on regional GDP per capita, it
must be remembered that Eurostat carries out its duties within a network system, where the data collection
is carried out by National Statistical Offices. In the calculation of regional GDP per capita, account was
taken of regional population figures that were officially submitted to Eurostat by the National Statistical
Office of Spain (INE). The Commission has no reason to have any doubt about these figures. Consequently,
the impact that this ‘GDP miscalculation’ would have on the investments made in the Balearic Islands is
null and void and the Commission will therefore not grant any economic compensation.

Concerning the implementation of other means of calculating the regional wealth, the Commission would
like to point out that from 2002 onwards, data on regional primary income and regional disposable
income at NUTS level 2 will be available for many Member States. Due to exemptions granted to some
Member States, a complete set of these data will not be available before 2005. It is Eurostat’s intention to
provide estimations before that date but currently these data are not available.

(2002/C 172 E/020)

WRITTEN QUESTION E-2906/01

by Markus Ferber (PPE-DE) to the Commission

(22 October 2001)

Subject: Alqueva artificial lake, Portugal

Is it correct that the European Union is contributing half of the EUR 1,25 billion required to finance
Europe’s largest dam project in the Alqueva region of Portugal?

Is it correct that the World Bank rejected an application for funding for this project because of economic
misgivings as long ago as 1975?

Is this investment guaranteed to be economically and ecologically sustainable?

Is it true that more than a million trees have been felled for this artificial lake and that populations of
many native species are endangered?

Answer given by Mr Barnier on behalf of the Commission

(14 December 2001)

The Alentejo region is one of the most disadvantaged in Portugal and in the European Union as a whole. It
is an agricultural region subject
to frequent droughts, resulting in a weak economic fabric and a
population with a poor level of skills.

In order to support the sustainable development of this region, during the 1994-1999 and 2000-2006
programming periods the Structural Funds are part-financing both the Alqueva multi-purpose project and
a whole series of measures designed to diversify the productive fabric and upgrade human resources, while
minimising the impact on the environment. The specific integrated development programme for the
Alqueva for 1994-1999 contains € 193 133 000 and the Alentejo regional Operational Programme for
2000-2006 € 1 088 000 for this purpose.