Communication of the Commission to the European Parliament and the Council on eurozone statistics "towards improved methodologies for eurozone statistics and indicators"
Date: 2002-11-27
Institutions: European Commission
Subjects: EU statistics, Eurostat, economic indicator, economic statistics, euro area, public debt

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 27.11.2002
COM(2002) 661 final

COMMUNICATION OF THE COMMISSION TO THE EUROPEAN PARLIAMENT
AND THE COUNCIL ON EUROZONE STATISTICS

“TOWARDS IMPROVED METHODOLOGIES
FOR EUROZONE STATISTICS AND INDICATORS”

EXECUTIVE SUMMARY

TABLE OF CONTENTS

I.

II.

INTRODUCTION

TOWARDS  BETTER  QUALITY  AND  IMPROVED  TIMELINESS  OF  INFRA-ANNUAL  MACRO-
ECONOMIC STATISTICS  FOR EUROZONE

A.

CURRENT SITUATION

B. MAIN OBJECTIVES AND STRATEGIES ON INFRA-ANNUAL MACRO-ECONOMIC STATISTICS

1.

2.

MAIN OBJECTIVES

THE STRATEGIES USED

2.1. THE EUROPEAN MONETARY UNION (EMU) ACTION PLAN

2.2

STATISTICS FOR SERVICES

2.3. THE BENCHMARKING EXERCISES

C.

A CONCERTED APPROACH ON PEEIS

1.

2.

3.

4.

5.

6.

D.

E.

F.

EUROINDICATORS

SETTING UP A LIST OF PEEIS

COMPILATION OF PEEIS

RELEASE OF DATA

DISSEMINATION OF DATA

PROMOTION OF BEST PRACTICES

PEEI IMPROVEMENTS AND MEMBER STATES' COMMITMENTS

PERFORMANCE REPORTING

FRAMEWORK FOR MEMBER STATES' COMMITMENTS

III. THE  REPORTING  AND  VALIDATION  OF  GENERAL  GOVERNMENT  DEFICIT  AND  DEBT

DATA IN THE CONTEXT OF THE EXCESSIVE DEFICIT PROCEDURE

A.

B.

C.

RECENT IMPROVEMENTS AND STRENGTHS OF THE SYSTEM

REMAINING WEAKNESSES AND PROPOSED APPROACHES

IMPENDING THREATS AND PROPOSED STRATEGIES

IV. OUTLINE 

IMPROVEMENT  OBJECTIVES  AND 

STRATEGIES,  AND  EXPECTED

A.

B.

C.

COMMITMENTS AND SUPPORT

OUTLINE OBJECTIVES AND STRATEGIES

EXPECTED COMMITMENTS

THE  NEED  FOR  FURTHER  POLITICAL  SUPPORT  AND  GUIDANCE  FROM  THE  EUROPEAN
COUNCIL

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EXECUTIVE SUMMARY

The Barcelona European Council of 15 and 16 March 2002 invited the Commission and the
Council to present a comprehensive report on Eurozone statistics for the European Council of
March 2003. As the Eurozone is a monetary union working under  a single  and independent
monetary  policy  and  decentralised  but  co-ordinated  fiscal  policies,  there  is  a  need  to  make
further progress by improving and harmonising the methodologies used to draw up Eurozone
statistics and indicators.

Modern-day democracies can only function efficiently if the policy makers and the public at
large are well informed about the economic and social developments. There is nothing more
important for monetary and fiscal policies than trustworthy statistics. They summarise overall
developments and are the only reliable source to assess macroeconomic developments such as
inflation, economic growth and the business cycle.

Improved  methodologies  for  Eurozone  statistics  and  indicators  mean  that  the  principles  of
impartiality,  reliability,  relevance,  consistency,  cost-effectiveness,  statistical  confidentiality,
and  transparency  are  fully  applied.  The  general  public  must  be  able  to  trust  that  official
statistics do not serve any  other interest  than providing the best possible information on the
state of affairs.

For the European Union as a whole and in particular for the Eurozone, official statistics of a
high  quality  are  essential  for  the  conduct  of  monetary  policy  and  the  co-ordination  of
economic,  in  particular  fiscal,  policies.  A  sufficiently  detailed  and  comprehensive  set  of
timely  and  reliable  monthly  and  quarterly  statistics  for  the  EU  and  the  Eurozone  is
indispensable for an independent and credible monetary policy. Similarly, reliable statistics on
national government deficit and debt and gross domestic product play an essential role in the
co-ordination of economic policies of Member States.

Considerable progress has already been made. However, for the European Statistical System
to  become  a  centre  of  excellence  a  quantum  leap  is  needed.    This  will  be  best  achieved
through  implementing  the  First  for  Europe  Principle  with  Member  States  focusing  on  the
provision  of  the  information  required  for  compiling  timely  and  high  quality  European
statistics.

The resources for statistics and the role of the institutions compiling them must comply with
these new European requirements.

The Commission (and the Council) invite the European Council to:

– 

– 

ensure that all necessary measures are taken to safeguard and strengthen trustworthy
official  statistics,  including  the  scientific  independence  of  the  European  Statistical
System comprising Eurostat and the national statistical institutes;

support  a  rigorous  compliance  monitoring  of  statistics  for  the  Excessive  Deficit
Procedure and the Stability and Growth Pact, notably based on a full transparency of
the concepts, data and methods underlying the compilation of these data; and

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– 

support  the  development  of  monthly  and  quarterly  Principal  European  Economic
Indicators needed for monetary and economic policies and available first for Europe,
with a timeliness and quality that matches world-wide standards.

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I.

INTRODUCTION

The Barcelona European Council of March 2002 expressed the need for further progress to be
made  on  Eurozone  statistics  and  asked  the  Commission  and  the  Council  to  prepare  a
comprehensive report on Eurozone statistics for the Spring 2003 European Council.

Indeed, the availability of good quality Eurozone statistics is essential for the co-ordination of
economic policies, the assessment of convergence and the conduct of monetary policy. This
applies  to  infra-annual  macro-economic  statistics,  which  represent  a  key  instrument  for
business cycle analysis and short-term economic policies. The same is particularly true for a
successful monitoring of government deficit and debt in the context of the Excessive Deficit
Procedure (EDP) of the Stability and Growth Pact. This report is centred on these two aspects,
which are of utmost importance for the Monetary Union.

Over  recent  years,  the  Commission,  the  Council,  the  European  Central  Bank  and  the
European  Statistical  System  (ESS)  as  a  whole  have  made  very  substantial  improvements  to
the  quality  of  statistics,  notably  with  respect  to  the  comparability,  coverage,  timeliness  and
coherence of data. In particular, since the signature of the Maastricht Treaty in 1992, several
important  initiatives  have  been  undertaken  to  enhance  European  macro-economic  statistics.
Thus,  the European System of integrated economic accounts dating from 1979 was replaced
by  a  new,  more  comprehensive  system  (known  as  ESA  95).  ESA  95  has  since  April  1999
obliged Member States to report national accounts data within a  well-defined  time schedule
on  both  an  annual  and  quarterly  basis.  Moreover,  high  quality  information  for  Harmonised
Indices on Consumer Prices (HICP) in Member States has been produced since January 1997.
In addition, in May 1998 the Council adopted, a Regulation setting up a common framework
for  the  production  of  short-term  Community  statistics  on  the  business  cycle.  Finally,  since
1994 Member States have had to report their planned and actual government deficit and debt
data  in  application  of  the  Protocol  on  the  EDP.  However,  despite  the  considerable  progress
secured to date, further improvements are still needed.

Concerning  infra-annual  macro-economic  statistics,  improvements  are  particularly  needed
with  respect  to  the  timeliness,  frequency  and  coverage  of  data,  the  breakdown  of  statistics
between  Eurozone  and  non-Eurozone,  the  further  harmonisation  of  methodologies  and  the
accessibility of  statistical information.  Such  progress is essential if the  ESS  is  to  meet  fully
the  needs  of  major  users  including  government  bodies  and  political  authorities,  economic
actors  and  financial  markets,  and  to  be  considered  as  the  reference  provider  of  infra-annual
macro-economic statistical information for the Eurozone and the EU.

On EDP statistics, the reporting practices and procedural arrangements need improving. The
compliance monitoring system should be enhanced. The scientific independence of statistical
authorities  must  be  reaffirmed  and  reinforced.  The  transparency  of  statistical  sources  and
methods  used  should  be  improved.  These  issues  are  of  the  highest  importance,  as  they
strengthen  the  credibility  of  the  surveillance  of  the  quality  and  long-term  sustainability  of
public finances in the Eurozone.

In response to the invitation of the Barcelona European Council, this report sets out the recent
improvements achieved on Eurozone statistics, the remaining weaknesses and the approaches

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taken to deal with them, the impending threats and the strategies adopted to address them. It
also  underlines  the  support  expected  from  the  European  Council  and  the  political  guidance
needed.  The  report  deals  primarily  with  Eurozone  statistics  and  not  European  Union  (EU)
statistics  as  a  whole.  However,  given  the  very  close  links  between  Eurozone  and  other  EU
statistics, the latter are also mentioned in some parts of the report.

Section II deals with infra-annual macro-economic statistics, notably outlining the approaches
aimed  at  improving  their  timeliness  and  other  quality  features.  Section  III  of  the  report
addresses  the  EDP  provisions,  and  examines  in  particular  options  for  strengthening  its
credibility.  Section  IV  summarises  the  objectives  and  strategies  on  EU/Eurozone  statistics,
considers  the  commitments  expected  from  the  various  players,  and  highlights  the  need  for
support at the highest political level.

II.

A.

TOWARDS  BETTER  QUALITY  AND  IMPROVED  TIMELINESS  OF  INFRA-ANNUAL
MACRO-ECONOMIC STATISTICS  FOR EUROZONE

Current situation

Infra-annual  macro-economic  statistics  represent  a  key  tool  for  economic  and  monetary
policy-making and business cycle analysis. Naturally, the demand for timely and good quality
infra-annual  macro-economic  statistics  for  the  Eurozone  has  increased  sharply  since  the
advent of the monetary union in 1999.

Although  considerable  progress  has  been  made  over  recent  years  in  this  area,  many
EU/Eurozone statistics lack timeliness. The comparison with the best EU Member States and
the United States is particularly striking. Moreover, the quality of some of these statistics has
been  criticised.  This  is  a  cause  for  concern  to  the  European  Commission,  the  European
Statistical  System  (ESS)  and  the  Council,  and  to  major  users  such  as  the  European  Central
Bank (ECB), economic actors and financial market analysts.

Thus, in its conclusions of October 2001 relative to the statistical requirements in Eurozone,
the Economic and Financial Affairs ("Ecofin") Council noted that further improvements must
be achieved in terms of the timeliness of key indicators. In particular, the Ecofin Council said
that, within the next five years, Eurozone statistics should attempt to emulate US standards of
the
availability  and 
Commission  has  adopted  policies  aiming  primarily  at  meeting  users'  needs  by  providing
EU/Eurozone  infra-annual  macro-economic  statistics  meeting  standards  of    timeliness  and
other measures of quality which are comparable to the best in Europe, the United States and
the rest of the world.

infra-annual  macro-economic  statistics, 

timeliness.  To 

improve 

B.

1.

Main objectives and strategies on infra-annual macro-economic statistics

Main objectives

The  Commission's  main  objective  is  to  accelerate  the  release  of  a  set  of  key  EU/Eurozone
infra-annual  macro-economic statistics and  to  improve  other  quality  features.  These  notably
include  complete  statistical  coverage,  consistency  between  the  different  sets  of  data,  the
transparency  of  the  methods  applied,  sound  monitoring  and  detailed  explanations  of  data
revisions, and the accessibility of statistical information.

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This would help improve the quality of the service to the various categories of users, and the
Commission and ESS would ultimately be seen as a reference point and a centre of excellence
for EU/Eurozone infra-annual macro-economic statistics. The targeted improvements will be
of great interest to EU policy-makers and to the ECB, which is responsible for EU monetary
policy and for the stability of the euro.

2.

The strategies used

2.1.

The European Monetary Union (EMU) Action Plan

The  Action Plan presented to the Ecofin Council in September 2000 represented a major step
towards the improvement of EU/Eurozone infra-annual macro-economic statistics. The EMU
Action Plan covers quarterly national accounts, quarterly accounts for the government sector,
statistics on labour markets, short term business statistics and statistics on external trade. For
each  Member  State,  it  has  identified  areas  where  progress  is  needed  in  the  compilation  of
national  indicators.  A  list  of  action  points  has  been  established  for  Eurostat  and  for  each
Member  State  (the  National  Action  Plan),  in  order  to  focus  efforts  on  the  required
improvements.  The  Action  Plan  requires  Member  States  to  accelerate  the  production  of
national data series to permit timely compilation by the Commission of reliable EU/Eurozone
indicators.  It  also  provides  for  improvements  in  other  quality  aspects.  Progress  on
implementing the Action Plan is reported regularly to Ecofin.

The Action Plan has created strong momentum for statistical improvements, and has already
produced positive results. Most Member States are  now  transmitting  their quarterly national
accounts  to  Eurostat  within  70  days,  compared  with  over  90  days  before.  Moreover,  the
quarterly  government  statistics  that  did  not  previously  exist  are  now  compiled  by  Member
States.

The main elements of the fifth progress report on the implementation of the EMU Action Plan
may  eventually  be  annexed  to  the  comprehensive  report  that  will  be  submitted  to  the
European Council.

2.2

Statistics for services

Services contribute some 70% of Eurozone and EU Gross Domestic Product, but monthly and
quarterly statistical data are scarce, except for retail trade. To improve this, the Ecofin Council
requested  proposals  aiming  to  improve  the  availability  of  monthly  and  quarterly  data.  In
response, priorities for the development of infra-annual macro-economic statistics have been
identified in the fifth progress report on the implementation of the EMU Action Plan.

2.3.

The benchmarking exercises

In  parallel  to  the  Action  Plan,  an  intra-EU  and  EU-US  benchmark  study  was  carried  out  in
September  2000.  It  confirmed  that  the  Action  Plan,  although  very  substantial,  might  not  be
enough  to  match  the  US  timeliness  and  best  practices  world-wide.  A  list  of  more  focused
infra-annual  macro-economic  indicators  (the  Principal  European  Economic  Indicators  or
PEEIs) has therefore been set up, with more challenging target release dates for EU/Eurozone
indicators and other quality objectives together with milestones (see table 1 below: "PEEI list:
Periodicity and Delays in Calendar Days").

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C.

A concerted approach on PEEIs

In order to achieve the highest quality standards and offer the best possible statistical service
to the various users, the EU needs strong and efficient co-ordination on statistical information
in  general  and  on  PEEIs  in  particular.  The  Commission  has  a  leading  role  to  play  in  this
respect, being the body responsible for compiling and releasing statistical data and indicators
at EU/Eurozone level. This  co-ordination  role  will gain in  importance  with  the  forthcoming
enlargement,  if  infra-annual  macro-economic  statistics  of  future  Member  States  are  to  be
incorporated adequately so that neither timeliness nor quality of EU/Eurozone indicators are
compromised.

Concerning  PEEIs,  the  Commission  has  adopted  solutions  covering  several  aspects:  details
are given in the following paragraphs. The list of PEEIs and the related objectives will need
refining over time, notably to accommodate developments on services statistics.

1.

Euroindicators

In  autumn  1998  the  Commission  launched  with  its  Euro  indicators  a  special  dissemination
service  focusing  on  statistical  information  particularly  relevant  for  the  monetary  union.  In
summer  2001  this  service  was  extended  with  the  opening  of  the  Euroindicator  web-site
offering  access  to  a  full  set  of  metadata  and  a  database  geared  towards  the  needs  of  the
business cycle analysts.

Despite a considerable improvement over the prior situation these new services have equally
revealed the need for further improvement. This has led the Commission to broaden its policy
in pursuit of its main objectives.

2.

Setting up a list of PEEIs

The  PEEIs  on  the  list  have  been  selected  on  the  basis  of  the  views  of  the  ECB  and  the
Commission's  Economic  and  Financial  Affairs  Directorate-General,  and  on  results  from  the
benchmarking exercises so as to fully reflect current user needs. The list will be updated on
the  basis  of  suggestions  from  the  Commission  that  will  be  discussed  notably  with  the  ECB
and Member States.

The Commission and the ESS co-operate closely with the ECB on issues related to monetary,
financial and balance of payments indicators.

3.

Compilation of PEEIs

The Commission will compile and release PEEIs based on Member States' contributions. This
does not mean that all Member States will have to produce representative indicators nationally
with the same timeliness. But Member States, in particular those whose economy has the most
significant impact on EU/Eurozone aggregates, are expected to contribute the information that
will  be  needed  to  produce  and  release  timely  and  representative  indicators  at  EU/Eurozone
level (First for  Europe principle). Other  Member  States are asked to do  their  best  to  supply
this  information  as  well.  All  Member  States  naturally  remain,  free  to  release  the  indicators
nationally, if they wish.

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In the current compilation and release process the estimation of EU/Eurozone aggregates (in
cases where data are lacking) is neither generalised nor based on common principles, and the
revision  of  EU/Eurozone  indicators  is  triggered  more  or  less  uncontrolled  by  national
revisions. It is in this context that the Commission has recently adopted a clear estimation and
revision policy for EU/Eurozone indicators.

The  Commission  will  disclose  full  information  on  the  way  in  which  each  PEEI  has  been
compiled through the Euroindicators site.

4.

Release of data

The  Commission  aims  to  release  EU/Eurozone  indicators  on  the  target  dates  indicated  in
table 1.  The  achievement  of  this  objective  is to  a  large  extent  dependent  on  Member  States
fulfilling  the  commitments  they  have  made  voluntarily  (i.e.  by  means  of  gentlemen's
agreements)  regarding  PEEI  improvements.  These  commitments  notably  provide  that
Member States will submit to the Commission their contributions to the information needed
to compile indicators at EU/Eurozone level, within specific time limits, so that the EU target
release dates can be met.

5.

Dissemination of data

The Commission will develop a common dissemination platform with Member States for the
dissemination  of  PEEIs.  This  platform  will  be  a  specific  domain  accessible  through  the
Euroindicators  site,  and  will  cover  both  EU/Eurozone  and  national  indicators  (compiled
according to EU standards). This  approach  implies greater responsibility for Member States
regarding the  quality  and  smooth  functioning  of  the system.  Member States  will be  directly
responsible for the release and updating of their national indicators through the site, but this
will have to be done in a way that appears consistent and co-ordinated to the users. They will
have  to  give  explanations  on  the  status  of  their  national  indicators  and  the  methodologies
applied.

The general aim is to permit the use of state-of-the-art technologies to reinforce co-operation,
taking account of the subsidiarity and proportionality principles.

6.

Promotion of best practices

The benchmarking exercise (intra-EU comparison) conducted in 2001 revealed inter alia that
national statistics vary considerably in terms of timeliness and other quality aspects. This has
shown  clearly  that  there  is  room  for  improvement  in  Member  States.  The  Commission
therefore  urges  Member  States  to  adopt  best  practices  and  facilitates  this  through  special
seminars and working group discussions.

D.

PEEI improvements and Member States' commitments

For each PEEI, ambitious objectives have been set up regarding timeliness and other quality
aspects.  Member  States'  commitments  within 
transmitting
contributions before specific deadlines. The information to be transmitted consists of  output
data  contributing  to  the  various  PEEIs,  together  with  a  qualitative  assessment,  concise
metadata (sources, methods and formulae) and explanations for significant revisions. Member
States are also  asked  to  participate  actively  in  the  studies  and  other  work  concerning  PEEI,

this  programme 

include 

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and  in  particular  to  join  task  forces  where  appropriate  and  to  consider  using  the
methodologies proposed by Eurostat where relevant.

E.

Performance reporting

The  Commission  (Eurostat)  will  monitor  progress  on  this  work  programme.  It  will  prepare
regular reports that will notably cover progress towards PEEI objectives and the application of
the First for Europe principle for PEEIs. Those reports will assess Eurostat's contributions to
improvements related to the timeliness and other quality objectives for PEEIs. They will also
analyse  improvement  of  the  timeliness  of  Member  States'  contributions  and  their  efforts  to
fulfil  their  commitments.  In  addition,  the  reports  will  cover  the  quality  of  Member  States'
participation  in  the  common  dissemination  platform  and  the  costs  associated  with  this
participation and the functioning of the platform.

F.

Framework for Member States' commitments

The commitments planned under this concerted approach on PEEIs are made voluntarily. This
means that no new regulatory instruments are needed, as requests to Member States are based
on either already existing EU legislation or on voluntary arrangements (generally referred to
in the statistical field as "gentlemen's agreements"). Naturally, Member States will still have
to  comply  with  EU  legislation  that  concerns  data  related  to  the  indicators.  Where  the
timeliness objective set by EU legislation is less stringent than the PEEI objective, the latter
should be pursued on the basis of a "gentlemen's agreement".

III.

THE  REPORTING  AND  VALIDATION  OF  GENERAL  GOVERNMENT  DEFICIT  AND  DEBT
DATA IN THE CONTEXT OF THE EXCESSIVE DEFICIT PROCEDURE

A.

Recent improvements and strengths of the system

The EDP has been in operation since 1994. It has given a major impetus for improving the EU
governments’  fiscal  positions.  Moreover,  thanks  to  the  efforts  co-ordinated  by  Eurostat  in
harmonising the accounting rules and monitoring their implementation, the quality, timeliness
and comparability of EDP data for the various Member States have improved considerably.

Following several  improvements, the  reporting  and procedural arrangements under the  EDP
have been working well. The following are strengths of the system.

Firstly, the macroeconomic aggregates covered by the EDP (principally general government
deficit and debt ratios) are now based on the European System of Accounts of 1995 (ESA 95).
This  represents  a  major  improvement  in  terms  of  national  accounts.  ESA  95  is  a  common
national accounting framework that has a solid basis in the form of a Council Regulation and
is legally binding on all Member States. This permits Eurostat to ensure that the same basic
concepts and accounting rules are strictly applied by all.

Secondly, for the recording of transactions insufficiently treated in ESA 95, or not treated at
all,  specific  Regulations  and  Commission  (Eurostat)  guidelines  are  adopted  to  supplement
ESA 95 or interpret and  clarify its rules.  These specific  solutions conform  to  ESA  95  basic
principles.

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In  addition,  the  search  for  appropriate  solutions  is  conducted  using  a  well-defined  and
transparent  consultation  procedure,  starting  with  a  thorough  technical  examination  of  the
transactions  by  experts  from  Eurostat  and  the  Member  States  within  the  National  Accounts
and Financial Accounts working parties of Eurostat.

Eurostat  then  consults  the  Committee  on  Monetary,  Financial  and  Balance  of  Payments
Statistics  (the  CMFB,  which  brings  together  very  experienced  representatives  of  National
Statistical Institutes, National Central Banks, the European Central Bank and Eurostat) on the
proposed solutions.

The  CMFB  is  a  consultative  committee  and  its  opinion  is  not  binding  on  Eurostat,  which
alone is responsible for the  final  decision.  In its final decision Eurostat does, however, take
the  fullest  account  of  the  opinions  expressed  by  the  CMFB  and  the  expert  groups  on  the
accounting  treatment  of  a  transaction.  Eurostat  makes  its  decision  in  full  independence  and
neutrality, applying purely technical criteria.

Furthermore,  the  same  treatment  is  applied  to  equivalent  cases  in  all  Member  States,  thus
ensuring the comparability of the aggregates.

In each case, the solution adopted together with the technical justifications and the results of
the  CMFB  consultations  are  communicated  to  National  Statistical  Institutes  and  other
interested bodies, and made public through press releases. This enhances the transparency of
the procedure.

Finally, Eurostat examines regularly the EDP data reported by the Member States, to ensure
that the accounting rules are properly applied by all countries.

This approach has enabled Eurostat to solve a number of complex issues since the EDP was
launched in 1994.

B.

Remaining weaknesses and proposed approaches

Despite these strengths, several weaknesses in the system have surfaced occasionally. These
include large revisions to data for some  countries, raising questions about  the quality  of the
data;  a  lack  of  information  and  transparency  on  some  figures  and  transactions,  and  the  late
transmission of EDP notifications by some Member States. Efforts have already been made to
remedy and prevent these shortcomings, but they need to be continued with increased vigour.

It must be noted that the involvement of some National Statistical Institutes in the compilation
of general government deficit and debt statistics is quite recent. In several countries, this task
used (and continues) to be dealt with mainly by the budgetary services of finance ministries.
NSIs have the capacity to contribute in this area, and help clarify the methods, practices and
procedures; but this capacity is not yet fully and adequately mobilised.

In accordance with the principle of subsidiarity,  each Member State sets up its own internal
procedures  and  responsibilities  for  the  transmission  of  EDP  data.  Nevertheless,  national
responsibilities  for  compiling  and  reporting  the  data  must  be  clear  to  Eurostat.  In  addition,
these  procedures  should  facilitate  a  dialogue  at  national  level  and  with  the  Commission,  to
ensure the transparency of the transactions and data and of the accounting treatments used.

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On  data  revisions,  Eurostat  will  continue  to  work  with  Member  States  with  a  view  to
strengthening  the  statistical  systems,  sources  and  methods  that  underlie  EDP  data,  and
improving  the  early  estimates,  thus  limiting  the  size  of  subsequent  revisions.  Moreover,
earlier consultation of Eurostat on specific transactions by Member States must be extended
so  that  all  accounting  issues  are  addressed  in  time  for  the  notifications.  In  addition,  while
Eurostat has so far carried out its verification work on historic data, more information on and
analysis of certain national forecasts are needed. The recently adopted Regulation 1221/2002
of  the  European  Parliament  and  the  Council  on  quarterly  accounts  is  expected  to  facilitate
earlier information for the Commission on some transactions affecting general government in
Member  States.  Lastly,  it  is  of  the  highest  importance  that,  in  future,  Member  States
accompany  their  notifications  with  a  document  explaining  fully  and  clearly  any  significant
revisions to earlier data and specific transactions.

On  the  lack  of  information  and  transparency,  it  is  proposed  that  where  necessary  and  at
Eurostat's  request,  for  monitoring  purposes  Member  States  provide  more  details  (including
possibly more detailed EDP reporting tables) on their figures and transactions. This concerns
primarily  the  detailed  information  behind  the  figures  compiled  in  the  first  place  by  finance
ministries or other government bodies and transmitted subsequently to NSIs.

Concerning late notifications, it is recalled that deficit and debt data have to be  reported by
Member States before 1 March and 1 September each year. These deadlines must absolutely
be  adhered  to,  in  order  that  Eurostat  can  check  the  data,  seek  clarifications  from  Member
States where necessary, publish the data and issue its press releases within the target deadline
of  fifteen  days.  This  is  a  critical  condition  for  maintaining  transparency  with  users,  in
particular the financial markets and the public at large.

The Commission will report to the Economic and Financial Committee (EFC) all significant
shortcomings in the data notified by Member States under the EDP with a view to prompting
appropriate action also by the EFC.

According to the Treaty, data for the EDP are provided by the Commission. However, since
the Commission does not directly compile data from the basic sources in each country, it has
to rely on data reported by the national statistical authorities. Therefore, co-ordinated efforts
towards greater transparency and co-operation, full documentation and timeliness are essential
from all sides - including notably economics and finance ministers - if the monitoring exercise
is to be fully efficient and successful. This is vital, in particular if the current Member States
are to set a good example to an enlarged EU, with a number of countries participating in the
EDP exercise for the first time in the near future.

C.

Impending threats and proposed strategies

One  major  impending  threat  to  the  EDP  is  the  suspicion  of  political  interference  in  the
methodologies  and  data  for  general  government  deficit  and  debt  reported  by  the  Member
States. This raises the issue of the scientific independence of the statistical bodies that compile
these  data  in  Member  States  (NSIs,  national  central  banks  and  other  agencies).  Whilst  it  is
undoubtedly  for  political  authorities,  and  not  statistical  bodies,  to  define  budgetary  policies
and  priorities,  the  statistical  authorities  must  have  full  and  unquestioned  control  and
responsibility over statistical methodologies and the compilation of data. These  bodies  must
compile figures in  strict  compliance  with ESA 95 concepts  and methods, other  relevant  EU
legislation and Eurostat guidelines.

12

It is essential to reaffirm and reinforce the scientific independence of statistical authorities at
both national and EU levels, in order to enhance the credibility of the EDP and the Stability
and Growth Pact.

To that effect, political authorities should refrain from any form of interference in statistical
methodologies  and  the  compilation  of  data.  Moreover,  they  should  make  every  effort  to
promote the transparency of that data. In addition, they should further encourage the existing
consultation procedure centred on the CMFB that is presented in section III. A. above.

The notion of scientific independence for statisticians should be further defined and based on
a common and Community-wide understanding.  In  addition, setting up an appropriate  "peer
review" system at European level that aims at the full transparency of data would contribute
to strengthen independence.

The  resources  question  is  another  prominent  issue.  Scarce  resources  together  with  ever-
increasing new statistical requirements create an imbalance that hinders  improvement of the
most  important  statistics  for  both  national  and  EU  purposes.  It  is  proposed  that  statistical
priorities  be  reviewed  in  Member  States  and  at  European  level  with  a  view  to  applying  a
"First for Europe" principle. This implies that in particular, where individual country data are
not  requested  for  EU  purposes,  Member  States  would  simply  contribute  the  information
needed to compile EU statistics, without having to produce the same statistics nationally. This
approach would help reallocate resources to the most important statistics, including EDP data.

A specific Communication from the Commission to the European Parliament and the Council
on  the  need  and  means  to  upgrade  the  quality  of  budgetary  statistics  is  currently  being
prepared.  This  Communication  would  propose  a  code  of  conduct  on  the  reporting  and
validation of general government deficit and debt data in the context of the EDP.

The  proposed  code  of  conduct,  that  would  have  to  be  agreed  with  Member  States  and
endorsed  by  the  Ecofin  Council,  focuses  on  technical  details  aiming  to  improve  rules  and
procedures for EDP data. On the other hand, the present Communication aims to respond to
the  request  from  the  Barcelona  European  Council  of  March  2002  by  putting  emphasis,  and
calling support from the European Council, on the principles that must govern the compilation
and reporting of EDP data, as well as the role of the bodies responsible for these procedures.
The proposed code of conduct is thus fully complementary to the present Communication on
Eurozone  statistics  and  eventually,  its  main  elements  may  be  considered  in  the  final
comprehensive report that will be submitted to the European Council of March 2003.

IV.

OUTLINE 
COMMITMENTS AND SUPPORT

IMPROVEMENT  OBJECTIVES  AND  STRATEGIES,  AND  EXPECTED

A.

Outline objectives and strategies

The  Commission,  the  Council,  the  European  Central  Bank  and  the  European  Statistical
System as a whole have already achieved very significant results on the EDP and infra-annual
macro-economic  statistics  for  the  Eurozone.  Nevertheless,  further  improvements  are  needed
and some remaining important weaknesses and risks must be addressed.

On  infra-annual  macro-economic  statistics  timeliness  and  other  quality  aspects  will  be
improved. To improve timeliness, the First for Europe principle and other policies on PEEIs

13

regarding  their  compilation,  release  dates  and  dissemination  (as  described  in  point  II,  C,
paragraphs  3  to  6)  will  be  applied.  In  addition,  the  sharing  between  Member  States  of  best
practices  concerning  statistical  methodologies,  the  collection  of  data  and  organisational
aspects  will  be  promoted.  The  improved  coverage  of  services  activities,  labour  costs  and
import/export  prices  and  the  breakdown  of  some  statistics  between  Eurozone  and  non-
Eurozone  will  be  given  special  emphasis.  Naturally,  the  implementation  of  National  Action
Plans will need to be pursued vigorously.

On  EDP  statistics,  the  scientific  independence  of  statisticians  needs  strengthening,  the
transparency  of  data  must  be  reinforced,  and  timeliness  has  to  be  maintained  in  order  to
further assure the credibility of the Excessive Deficit Procedure (EDP) and the Stability and
Growth Pact.

A firm commitment by political authorities to enhancing scientific independence is essential.
Strategies to reach the other objectives include further work with Member States to improve
statistical systems and earlier consultations between Member States and the Commission  on
difficult issues. In addition, Member States will be asked to supply more detailed information
more quickly. This will enable closer compliance monitoring by the Commission.

In order to reach these goals, strong commitments are expected from the various players.

B.

Expected commitments

The Commission is committed to doing its utmost to implement the policies presented in this
report and to achieve the targeted improvements to infra-annual macro-economic statistics for
the EU/Eurozone and to the EDP.

The success of this approach will depend to a large extent on the full co-operation and active
participation of the Member States. The Commission accordingly invites the Member States
to fulfil their commitments to deliver the data required and fully participate in the infra-annual
macro-economic statistics improvements envisaged. In addition, the Commission calls on the
Member States to commit themselves to efforts towards the full transparency of the EDP

The  Council  of  Ministers  and  the  European  Parliament  are  invited  to  support  the
Commission's approach and urge Member States to contribute fully to the achievement of the
objectives set by the Commission by fulfilling the commitments to deliver the required data
and information.

C.

The need for further political support and guidance from the European Council

The Commission (and the Council) seek the support of  the European Council for this work ,
which is carried out within the ESS. It is proposed that he European Council:

– 

– 

expresses its trust in the work of European statisticians, underlines the importance of
their  scientific  independence,  and  encourages  appropriate  actions  to  further  define
and enshrine this notion throughout the Union;

supports the rigorous compliance monitoring of EDP statistics, based notably on the
full transparency of the transactions, data and methods underlying the compilation of
the notified figures and encourages national statistical services to adopt best practices
for data collection and for the compilation of infra-annual macro-economic statistics;

14

– 

– 

– 

encourages the Commission in developing a concerted approach that gives priority to
the  compilation  of  EU/Eurozone  aggregates  as  implied  by  the  First  for  Europe
principle  and  pledges  support  from  Member  States  when  implementing  this  policy.
This  implies  that  resources  are  reallocated  at  national  level  to  strengthen  the
European Statistical System;

calls for national statistical bodies to participate actively in benchmarking exercises
to improve statistics, policy and organisational aspects and compliance monitoring;

underlines the importance of a permanent and open dialogue between producers and
users of statistics in appropriate fora, to enable producers to render a better service in
line  with  user  needs  and  strengthen  the  transparency,  credibility  and  authority  of
statistics.

15

TABLE 1

PRINCIPAL EUROPEAN ECONOMIC INDICATORS LIST:
PERIODICITY AND DELAYS IN CALENDAR DAYS

SET

INDICATOR

Set 1:  Consumer Price Indicators

PERIODICITY

EU DELAY
TARGET

EU DELAY
ACTUAL

1.1.

Harmonised Consumer Price Index: MUICP flash
estimate

monthly

1.2.

Harmonised Consumer Price Index: actual indices

monthly

Set 2:  National Accounts Indicators

2.1.

2.2.

2.3.

2.4.

Quarterly National Accounts: First GDP estimate

Quarterly National Accounts: First GDP release
with more breakdowns

Quarterly National Accounts: Household and
Company Accounts

Quarterly National Accounts: Government Finance
Statistics

Set 3:  Business Indicators

3.1.

3.2.

3.3.

3.4.

3.5.

3.6.

3.7.

3.8.

Industrial production index

Industrial output price index for domestic markets  

Industrial new orders index

Industrial import price index

Production in construction

Turnover index for retail trade and repair

Turnover index for other services

Corporate output price index for services

Set 4:  Labour Market Indicators

4.1.

4.2.

4.3.

4.4.

Unemployment rate

Job vacancy rate

Employment

Labour cost index 

Set 5:  Foreign Trade Indicators

quarterly

quarterly

quarterly

quarterly

monthly

monthly

monthly

monthly

monthly/
quarterly

monthly

quarterly

quarterly

monthly

quarterly

quarterly

quarterly

5.1.

External trade balance: intra and extra for MU and
EU

monthly

NA : not available (not published yet at EU level)

16

0

17

45

60

90

90

40

35

2

17

NA

70/120

NA

100

48

35

40/50

Preliminary data

45

45

30

60

60

30

45

45

70

45

NA

75

60

Partial data

NA

30

NA

70/75

90

50