Proposal for a Council Regulation amending Regulation (EC) No 3605/93 as regards the quality of statistical data in the context of the excessive deficit procedure
Date: 2005-03-02
Institutions: European Commission
Subjects: EU statistics, European accounting system, Treaty on European Union, data processing, public administration, public debt

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.3.2005 
COM(2005) 71 final 

2005/0013 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 3605/93 as regards the quality of statistical data in the 
context of the excessive deficit procedure 

(presented by the Commission) 

EN 

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EXPLANATORY MEMORANDUM 

In the context of the excessive deficit procedure, as laid down in Article 104 of the EC Treaty, 
the  Commission  monitors  the  development  of  the  budgetary  situation  and  the  stock  of 
government  debt  in  the  Member  States.  Article  4  of  the  Protocol  on  the  excessive  deficit 
procedure annexed to the EC Treaty further specifies that “The statistical data to be used for 
the application of this Protocol shall be provided by the Commission”. 

On  behalf  of  the  Commission,  Eurostat  has  assumed  the  role  of  statistical  authority  in  the 
context  of  the  Excessive  Deficit  Procedure  (EDP)  and  exercises  its  remit  pursuant  to 
Commission Decision of 21 April 1997 on the role of Eurostat as regards the production of 
Community statistics1. 

Eurostat does not directly compile the fiscal data of the Member States, but depends on data 
compiled and reported by the national authorities. Council Regulation (EC) No 3605/932, as 
amended  by  Council  Regulation  (EC)  No  475/20003  and  Commission  Regulation  (EC)  No 
351/20024, defines the rules and coverage of such reporting by the Member States. It also lays 
down  a  timetable  for  the  reporting  to  the  Commission  of  annual  data  on  government 
deficit/surplus and on government debt.  

On 18 February 2003, the Council of Ministers (ECOFIN) adopted a Code of Best Practice in 
an  attempt  to  clarify  and  streamline  the  procedures  for  compiling  and  reporting  data  for 
government deficit and debt in the context of the excessive deficit procedure. 

Past developments have shown that substantial revisions of fiscal data may occur, which can 
harm  the  credibility  of  budgetary  surveillance  as  a  whole.  It  is  the  Commission’s 
responsibility  to  assume  the  highest  degree  of  awareness  and  concern  for  the  quality  of  the 
statistical  data  used  in  budgetary  surveillance.  At  the  same  time,  the  Council  has  explicitly 
invited the Commission to strengthen the monitoring of the quality of the reported fiscal data. 

The  Commission  adopted  on  22  December  2004  the  Communication  to  the  European 
Parliament and  the  Council “Towards a European governance strategy for fiscal  statistics”5, 
which  included  three  lines  of  action  for  the  improvement  of  fiscal  statistics:  completing  the 
legal  framework,  developing  the  operational  capacity,  and  the  development  of  European 
minimum standards for the institutional set-up of statistical authorities. 

The measures proposed in this draft Regulation relate to the first and second lines of action. 
They  are  designed  to  set  up  surveillance  mechanisms,  define  procedures  to  resolve 
methodological  issues  and  increase  accountability  and  transparency  throughout  the  whole 
process.  

Council Regulation (EC) No 3605/93 contains the relevant definitions for the purpose of the 
excessive deficit procedure and lays down a timetable for the reporting by Member States to 
the Commission of annual government deficit and debt and of other annual government data. 

1 
2 
3 
4 
5 

OJ L 112 of 29.4.1997, p. 56. 
OJ L 332, 31.12.1993, p. 7. 
OJ L 58, 3.3.2000, p. 1. 
OJ L 55, 26.2.2002, p. 23. 
COM(2004) 832. 

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There is, however, no reference in this Council Regulation to the assessment of the quality of 
the data reported by Member States or to the provision of data by the Commission. 

In order to develop these aspects, this draft Regulation builds on the experience gained in the 
implementation of the Council Regulation (EC) No 3605/93 and of the Code of Best Practice. 
In proposing measures to strengthen the statistical monitoring in the context of the excessive 
deficit procedure, consideration has also been given to existing procedures and checks on the 
calculation  of  gross  national  income  figures,  as  laid  down  by  Council  Regulation  (EC, 
Euratom)  No  1287/2003  of  15  July  2003  on  the  harmonisation  of  gross  national  income  at 
market prices (GNI Regulation)6. 

As  for  the  second  line  of  action  described  in  the  Communication  mentioned  above,  the 
proposed  measures  included  in  this  draft  Regulation  allow  for  in-depth  monitoring  visits  in 
addition to the dialogue visits which are currently carried out, and for the mobilisation of all 
of  the  existing  expertise  in  this  field  in  order  to  assist  the  Commission  in  these  visits.  The 
resource  requirements  for  the  goal  of  reinforcing  and  making  systematic  the  checks  on  the 
accounts of national public administrations are described in the attached financial legislative 
statement. 

The Commission will develop administrative arrangements related to this draft Regulation, in 
particular  the  practical  modalities  for  the  in-depth  monitoring  visits  and  the  modalities  for 
selection of the experts assisting the Commission in these visits. 

The  Commission  is  currently  working  to  develop  the  third  line  of  action  included  in  the 
Communication.  There  is  a  need  to  establish  European-wide  minimum  standards  in  the 
domain  of  statistics,  which  reinforce  the  independence,  integrity  and  accountability  of  the 
National  Statistical  Institutes  and  of  Eurostat,  in  order  to  respond  to  the  invitation  of  the 
ECOFIN  Council  by  June  2005.  The  Commission  therefore  plans  to  make  proposals  in  this 
area  before  that  date.  The  proposals  will  take  into  account  the  work  of  a  task  force  in  the 
framework  of  the  Statistical  Programme  Committee  which  has  drafted  a  Europan  statistics 
Code  of  Conduct.  This  Code  aims  at  improving  trust  and  confidence  in  the  independence, 
integrity  and  accountability  of  both  National  Statistical  Authorities  and  Eurostat,  and  in  the 
credibility and quality of the statistics they produce and disseminate. It also aims at promoting 
the  application  of  best  international  statistical  principles,  methods  and  practices  by  all 
producers of European Statistics in order to optimise their quality. 

6 

OJ L 181, 19.7.2003, p. 1. 

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2005/0013 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 3605/93 as regards the quality of statistical data in 
the context of the excessive deficit procedure 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular the 
third subparagraph of Article 104(14) thereof, 

Having regard to the proposal from the Commission7, 

Having regard to the opinion of the European Parliament8, 

Whereas: 

(1) 

(2) 

Statistical  data  to  be  used  for  the  application  of  the  Protocol  on  the  excessive 
deficit  procedure  annexed  to  the  Treaty  establishing  the  European  Community 
must be provided by the Commission. The Commission does not directly compile 
these  data  but  relies  on  data  compiled  and  reported  by  the  national  authorities 
pursuant to Article 3 of that Protocol. 

The role of the Commission, as statistical authority, in that context is specifically 
exercised  by  Eurostat,  on  behalf  of  the  Commission.  As  the  Commission 
department responsible for carrying out the tasks devolving on the Commission as 
regards the production of Community statistics, Eurostat is required to execute its 
tasks in accordance with the principles of impartiality, reliability, relevance, cost-
effectiveness,  statistical  confidentiality  and  transparency,  as  laid  down  in 
Commission  Decision  of  21  April  1997  on  the  role  of  Eurostat  as  regards  the 
production of Community statistics9. 

(3) 

Council Regulation (EC) No 3605/93 of 22 November 1993 on the application of 
the  Protocol  on  the  excessive  deficit  procedure10  annexed  to  the  Treaty 

7 
8 
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10 

OJ C, p. . 
OJ C, p. . 
OJ L 112, 29.4.1997, p. 56. 
OJ L 332, 31.12.1993, p. 7, as last amended by Commission Regulation (EC) No 351/2002 (OJ L 
55, 26.2.2002, p. 23). 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

establishing  the  European  Community  contains  the  relevant  definitions  for  the 
purpose  of  the  excessive  deficit  procedure  and  lays  down  a  timetable  for  the 
reporting to the Commission of annual government deficit and debt and of other 
annual government data. In its current wording, the Regulation does not contain 
provisions  concerning  the  assessment  of  the  quality  of  the  data  reported  by 
Member States or to the provision of data by the Commission. 

Following a proposal by the Commission11, the Council (ECOFIN) adopted on 18 
February 2003 a Code of Best Practice on the compilation and reporting of data in 
the  context  of  the  excessive  deficit  procedure,  in  an  attempt  to  clarify  and 
streamline  procedures,  at  both  Member  States  and  Commission  levels,  when 
compiling  and  reporting  government  accounts,  and  in  particular  data  for 
government deficit and debt, in the context of the excessive deficit procedure. 

The credibility of budgetary surveillance crucially hinges upon reliable budgetary 
statistics.  It  is  of  the  utmost  importance  that  data  reported  by  Member  States 
under  Regulation  (EC)  No  3605/93  and  provided  by  the  Commission  to  the 
Council in accordance with the Protocol are of high quality. 

It  is  necessary  to  specify  measures  to  improve  the  quality  of  actual  government 
data  reported  in  the  context  of  the  excessive  deficit  procedure  which  build  on 
existing best practices and which would allow the Council and the Commission to 
perform  their  duties  under  the  Treaty.  Core  elements  to  evaluate  the  quality  are 
laid down in the Quality Declaration of the European Statistical System, adopted 
by the Statistical Programme Committee in September 2001. 

The compilation of budgetary statistics are governed by the principles laid down 
in  Council  Regulation  (EC)  No  322/97  on  Community  statistics12,  most  notably 
the principles of impartiality, reliability, relevance and transparency. 

Eurostat shall be responsible, on behalf of the Commission, to assess the quality 
of  the  data  and  to  provide  the  data  to  be  used  in  the  context  of  the  excessive 
deficit procedure, in accordance with Commission Decision of 21 April 1997. 

A  permanent  dialogue  should  be  established  between  the  Commission  and  the 
Member  States’  statistical  authorities  in  order  to  ensure  the  quality  both  of  the 
actual  data  reported  by  Member  States  and  of  the  underlying  government 
accounts. To that end, both dialogue visits and in-depth monitoring visits may be 
carried  out  regularly  by  the  Commission  thus  enhancing  the  monitoring  of  the 
reported  data  and  providing  a  permanent  assurance  of  the  quality  of  the  data. 
Member  States  have  to  promptly  provide  the  Commission  with  access  to  the 
information. 

11 
12 

COM(2002) 670. 
OJ L 52, 22.2.1997, p. 1. 

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(10)  Detailed  inventories  of  the  methods,  procedures  and  sources  used  for  the 
compilation  of  actual  deficit  and  debt  data  and  the  underlying  government 
accounts  have  to  be  provided  to  the  Commission,  updated  regularly  and  made 
public by the Member States. 

(11)  Prompt  decisions  by  the  Commission  (Eurostat)  on  the  correct  accounting 
treatment  of  a  transaction  in  accordance  with  Council  Regulation  (EC)  No 
2223/96  of  25  June  1996  on  the  European  system  of  national  and  regional 
accounts in the Community (ESA95)13 are needed in cases of doubt as to correct 
accounting  treatment  of  a  government  transaction  or  in  cases  which  are  either 
complex or of general interest. 

(12)  Rules  governing  the  provision  of  data  by  the  Commission  (Eurostat)  have  to  be 
clarified in terms of the time limit of this provision and possible reservations and 
amendments. 

(13)  Coverage  of  the  reporting  needs  to  be  brought  in  line  with  the  data  currently 
reported  by  the  Member  States.  More  generally,  Regulation  (EC)  No  3605/93 
needs  to  be  updated  in  the  light  of  the  experience  gained  through  the 
implementation of the Code of Best Practice. 

(14)  Regulation (EC) No 3605/95 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 3605/93 is hereby amended as follows: 

(1) 

Article 4 is amended as follows: 

(a) In paragraph 2, the second, third and fourth indents are replaced by the following: 

–  ‘– shall simultaneously provide the Commission for years n, n-1, n-2, n-3 and n-4 with 
their corresponding public accounts budget deficits according to the definition which 
is given most prominence nationally and with the figures which explain the transition 
between the public accounts budget deficit and their government deficit. The figures 
explaining  this  transition  for  years  n-1,  n-2,  n-3  and  n-4  which  are  provided  to  the 
Commission  shall  include  the  transition  between  the  working  balances  of  each 
government  sub-sector  and  the  net  borrowing  of  the  sub-sectors  S.1311,  S.1312, 
S.1313 and S.1314, 

13 

OJ L 310, 30.11.1996, p. 1, as last amended by Regulation (EC) No 1267/2003 of the European 
Parliament and of the Council (OJ L 180, 18.7.2003, p. 1). 

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–  – shall report to the Commission their planned level of government debt at the end of 
year  n,  an  estimate  of  the  level  of  government  debt  at  the  end  of  year  n-1  and  their 
levels of actual government debt for years n-2, n-3 and n-4, 

–  –  shall  simultaneously  provide  the  Commission  for  years  n-1,  n-2,  n-3  and  n-4  with 
the  figures  which  explain  the  contribution  of  the  government  deficit  and  the  other 
relevant factors to the variation in the level of their government debt by sub-sector.’ 

(b) In paragraph 3, the second indent is replaced by the following:  

–  “– their updated planned level of government debt at the end of year n and their levels 
of actual government debt for years n-1, n-2, n-3 and n-4, and shall comply with the 
requirements of the fourth indent of paragraph 2.” 

(2) 

Articles 7 and 8 are replaced by the following: 

“Article 7 

Member States shall promptly inform the Commission of any significant revision 

1. 
in their actual and planned government deficit and debt figures already reported. 

Significant revisions in the actual deficit and debt figures already reported shall be 

2. 
properly documented. 

Article 8 

Member States shall make public the actual deficit and debt data and other data for past 
years reported to the Commission in accordance with Articles 4, 5, 6 and 7.” 

(3) 

After article 8, the following sections 3, 4 and 5 are inserted: 

“SECTION 3 

Quality of data 

Article 9 

1. 
The Commission (Eurostat) shall assess the quality both of actual data reported by 
Member States and of the underlying government accounts. Quality of actual data means 
the  compliance  with  accounting  rules,  completeness,  reliability,  timeliness,  and 
consistency of the data. 

Member States shall promptly provide the Commission (Eurostat) with access to 

2. 
the information requested for the purposes of the data quality assessment. 

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Article 10 

1. 
Member States shall provide the Commission (Eurostat) with a detailed inventory 
of the methods, procedures and sources used to compile actual deficit and debt data and 
the underlying government accounts. 

2. 
The  inventories  shall  be  prepared  in  accordance  with  guidelines  adopted  by  the 
Commission (Eurostat) after consultation of the Committee on Monetary, Financial and 
Balance  of  Payments  Statistics  (hereinafter  referred  to  as  ‘CMFB’)  established  by 
Council Decision 91/115/EEC14. 

The  inventories  shall  be  updated  regularly  following  revisions  in  the  methods, 

3. 
procedures and sources adopted by Member States to compile their statistical data. 

4. 

Member States shall make their inventories public. 

The  issues  referred  to  in  paragraphs  1,  2  and  3  may  be  addressed  in  the  visits 

5. 
mentioned in Article 12. 

Article 11 

1. 
In the case of a doubt regarding the correct accounting treatment of a government 
transaction, the Member State concerned shall request clarification from the Commission 
(Eurostat) on the correct accounting treatment of the transaction in accordance with ESA 
95.  

2. 
The Commission (Eurostat) shall promptly examine the issue, take a decision and 
communicate  the  decision  to the  Member  State  concerned and  to the  CMFB.  For  cases 
which are either complex or of general interest, the Commission (Eurostat) shall consult 
the CMFB before taking a decision. 

The  Commission  (Eurostat)  shall  make  its  decisions  public,  together  with  the 

3. 
opinion of the CMFB, if there is one. 

Article 12 

The  Commission  (Eurostat)  ensures  a  permanent  dialogue  with  the  Member  States’ 
statistical authorities. To this end, the Commission (Eurostat) will regularly carry out in 
all Member States dialogue visits as well as in-depth monitoring visits.  

The  dialogue  visits  are  designed  to  review  reported  data,  to  examine  methodological 
issues, and to assess compliance with the accounting rules. The in-depth monitoring visits 
are designed to monitor the processes and accounts which justify the reported data and to 

14 

OJ L 59, 6.3.1991, p. 19. 

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draw detailed conclusions as to compliance with accounting rules and the completeness, 
reliability, timeliness and consistency of the reported data. 

Article 13 

1. 
When carrying out in-depth monitoring visits in Member States, the Commission 
(Eurostat)  can  be assisted  by  experts,  most  notably  from  other  Member  States,  national 
authorities  of  the  Member  States  being  visited  who  have  a  functional  responsibility  for 
the control of the government accounts, and other Commission departments. 

2. 
Member  States  shall  take  all  measures  required  to  facilitate  the  in-depth 
monitoring  visits.  Member  States  shall  ensure  that  their  services  directly  or  indirectly 
involved  in  the  production  of  government  accounts  provide  the  officials  of  the 
Commission  or  other  agents  with  the  assistance  necessary  to  carry  out  their  duties, 
including making documents available to justify the reported actual deficit and debt data 
and the underlying government accounts. 

3. 
The  Commission  (Eurostat)  shall  ensure  that  the  proportionality  principle  is 
respected when organising these visits, and that its officials and experts participating in 
these  visits  meet  every  guarantee  as  regards  technical  competence,  professional 
independence and observance of confidentiality. 

Article 14 

The Commission (Eurostat) shall report to the Economic and Financial Committee on the 
findings of dialogue and in-depth monitoring visits. These reports shall be made public. 

SECTION 4 

Provision of data by the Commission 

Article 15 

The Commission (Eurostat) shall provide the actual government deficit and debt 
1. 
data  for  the  application  of  the  Protocol  on  the  excessive  deficit  procedure,  within  three 
weeks after the reporting deadlines referred to in Article 4(1) or after revisions as referred 
to in Article 7(1). This provision of data shall be effected through publication. 

2. 
The Commission (Eurostat) shall not delay the provision of the actual government 
deficit and debt data of Member States where a Member State has not reported its own 
data. 

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Article 16 

1. 
The Commission (Eurostat) may express a reservation on the quality of the actual 
data reported by the Member States. No later than two working days before the planned 
publication  date,  the  Commission  (Eurostat)  shall  communicate  to  the  Member  State 
concerned and to the President of the Economic and Financial Committee the reservation 
it intends to express and make public. Where the issue is resolved after publication of the 
data and the reservation, withdrawal of the reservation is made public. 

The  Commission  (Eurostat)  may  amend  actual  data  reported  by  Member  States 
2. 
and  provide  the  amended  data  and  a  justification  of  the  amendment  where  there  is 
evidence that actual data reported by Member States do not comply with the requirements 
of  Article  9  (1)  of  this  Regulation.  No  later  than  two  working  days  before  the  planned 
publication  date,  the  Commission  (Eurostat)  shall  communicate  to  the  Member  State 
concerned and to the  President of the Economic and Financial Committee the amended 
data and the justification for the amendment. 

SECTION 5 

General provisions 

Article 17 

Member  States  shall  certify  that  the  actual  data  reported  to  the  Commission  are 
1. 
provided  in  accordance  with  the  principles  established  by  Article  10  of  Council 
Regulation (EC) No 322/97. 

Member  States  shall  take  all  necessary  measures  to  ensure  that  officials 
2. 
responsible for the reporting of the actual data to the Commission and of the underlying 
government  accounts  act  in  accordance  with  the  principles  established  by  Article  10  of 
Council Regulation (EC) No 322/97. 

Article 18 

In  the  event  of  a  revision  of  ESA  95  or  of  an  amendment  to  its  methodology  to  be 
decided on by the European Parliament and the Council or the Commission in accordance 
with  the  rules  of  competence  and  procedure  laid  down  in  the  Treaty  and  in  Regulation 
(EC)  No  2223/96,  the  Commission  shall  introduce  the  new  references  to  ESA  95  into 
Articles 1, 2 and 4. 

This Regulation shall enter into force on 1 January 1994.” 

Article 19 

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Article 2 

Entry in force 

This  Regulation  shall  enter  into  force  on  the  twentieth  day  following  that  of  its 
publication in the Official Journal of the European Union. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable  in  all  Member 
States. 

Done at Brussels, 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

This document is intended to accompany and complement the Explanatory Memorandum. 
As such, when completing this Legislative Financial Statement, and without prejudice to 
its legibility, an attempt should be made to avoid repeating information contained in the 
Explanatory  Memorandum.  Before  filling  in  this  template,  please  refer  to  the  specific 
Guidelines  that  have  been  drafted  to  provide  guidance  and  clarification  for  the  items 
below.  

1.  NAME OF THE PROPOSAL  

Proposal for a Council Regulation amending Regulation (EC) No 3605/93 as regards 
the quality of statistical data in the context of the excessive deficit procedure 

2.  ABM/ABB FRAMEWORK 

Policy Area(s) concerned and associated Activity/Activities: 

Statistics – production of statistical information (3403) 

3.  BUDGET LINES 

3.1. Budget lines (operational lines and related technical and administrative assistance 

lines (ex- B.A. lines)), including headings : 

N/A 

3.2. Duration of the action and of the financial impact: 

N/A 

3.3. Budgetary characteristics (add rows if necessary) : N/A 

Budget 
line 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

Comp/ 
Non-
comp 

Diff15/ 
Non-
diff16 

YES/ 
NO 

YES/NO 

YES/NO 

No  

15 
16 

Differentiated appropriations. 
Non-differentiated appropriations, hereinafter referred to as NDA. 

EN 

12 

   EN 

 
 
 
 
                                                 
Comp/ 
Non-
comp 

Diff/ 
Non-
diff 

YES/ 
NO 

4.  SUMMARY OF RESOURCES 

4.1. Financial Resources 

YES/NO 

YES/NO 

No  

4.1.1.  Summary of commitment appropriations (CA) and payment 

appropriations (PA) 

EUR million (to 3 decimal places) 

Section 
No 

Expenditure type 

n + 1 

n + 2 

n + 3 

n + 4 

Year 
n 

n + 5 and 
later 

Total 

Operational expenditure17 

Commitment 
Appropriations (CA) 

8.1 

Payment  Appropriations 
(PA) 

a 

b 

Administrative expenditure within reference amount18 

& 
Technical 
administrative  assistance 
(NDA) 

8.2.4 

c 

TTOOTTAALL  RREEFFEERREENNCCEE  AAMMOOUUNNTT  

Commitment 
Appropriations 

Payment 
Appropriations 

a+c 

b+c 

Administrative expenditure not included in reference amount19 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

TOTAL 

8.2.5 

d 

0.9 

0.2 

1.7 

0.5 

1.7 

0.5 

1.7 

0.5 

1.7 

0.5 

1.7/year 

0.5/year 

1.1 

2.2 

2.2 

2.2 

2.2 

2.2/year 

EUROSTAT  

ECFIN 

TOTAL 

17 
18 
19 

Expenditure that does not fall under Chapter xx 01 of Title xx concerned. 
Expenditure within Article xx 01 04 of Title xx. 
Expenditure within Chapter xx 01 other than Articles xx 01 04 or xx 01 05. 

EN 

13 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
costs, 
Administrative 
human 
than 
other 
resources  and  associated 
costs,  not 
in 
reference amount (NDA) 

included 

TOTAL 

8.2.6 

e 

0.07 

0.28 

0.28 

0.28 

0.28 

0.28/year 

0.02 

0.075 

0.075 

0.075 

0.075 

0.075/year 

0.09 

0.355 

0.355 

0.355 

 0.355 

0.355/year 

EUROSTAT 

ECFIN 

TOTAL 

Total indicative financial cost of intervention 

TOTAL  CA,  including 
cost 
Human 
Resources 

of 

TOTAL  PA,  including 
cost 
Human 
Resources 

of 

Co-financing details 

0.97 

1.98 

1.98 

1.98 

1.98 

1.98 

EUROSTAT 

0.22 

0.575 

0.575 

0.575 

0.575 

0.575 

/year 

ECFIN 

0.97 

1.98 

1.98 

1.98 

1.98 

0.22 

0.575 

0.575 

0.575 

0.575 

/year 

1.98 

/year
0.575/
year 

EUROSTAT 

ECFIN 

a+c
+d+
e 

b+c
+d+
e 

Where  the  proposal  involves  co-financing  by  Member  States,  or  other  bodies  (please 
specify  which),  an  estimate  of  the  level  of  this  co-financing  should  be  indicated  in  the 
table  below  (additional  lines  may  be  added  where  different  bodies  are  expected  to 
provide co-financing): 

EUR million (to 3 decimal places) 

n + 1 

n + 2 

n + 3 

n + 4 

Year 
n 

n  +  5 
and 
later 

Total 

Co-financing body 

…………………… 

TOTAL  CA, 
co-financing 

including 

f 

a+c
+d+
e+f 

4.1.2.  Compatibility with Financial Programming 

(cid:133) 

(cid:133) 

Proposal is compatible with existing financial programming. 

Proposal will entail reprogramming of the relevant heading in the financial 
perspective. 

EN 

14 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(cid:133) 

Proposal may require application of the provisions of the Interinstitutional 
Agreement20  (i.e.  flexibility  instrument  or  revision  of  the  financial 
perspective). 

4.1.3.  Financial impact on Revenue 

(cid:133) 

(cid:133) 

Proposal has no financial implications on revenue 

Proposal has financial impact – the effect on revenue is as follows: 

NB:  All  details  and  observations  relating  to  the  method  of  calculating  the 
effect on revenue should be shown in a separate annex. 

Budget line 

Revenue 

EUR million (to one decimal place) 

Situation following action 

[Yea
r n] 

[n+1] [n+2] [n+3

] 

[n+4]  [n+5]

21

Prior to
action 
[Year 
n-1] 

a) Revenue in absolute terms 

b) Change in revenue 

 ∆ 

(Please  specify  each  revenue  budget  line  involved,  adding  the  appropriate 
number of rows to the table where there is an effect on more than one budget 
line.) 

4.2. Human Resources FTE (including officials, temporary and external staff) – see 

details under point 8.2.1. 

Annual requirements 

Year n 

n + 1 

N + 2 

n + 3 

n + 4 

n + 5  
and 
later 

number 
Total 
human resources 

TOTAL 

of 

  9 * 

  2# 

11 

17* 

  5# 

22 

17* 

  5# 

22 

17* 

  5# 

22 

17* 

  5# 

22 

17* 

  5# 

22 

20 
21 

See points 19 and 24 of the Interinstitutional Agreement. 
Additional columns should be added if necessary, i.e. if the duration of the action exceeds 6 years. 

EN 

15 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
* Eurostat    # ECFIN   

5.  CHARACTERISTICS AND OBJECTIVES 

Details  of  the  context  of  the  proposal  are  required 
in  the  Explanatory 
Memorandum.    This  section  of  the  Legislative  Financial  Statement  should  include 
the following specific complementary information: 

5.1. Needs to be met in the short or long term 

Recent  events  relating  to  the  revision  of  budgetary  figures  and  recent  discussion 
conducted at ECOFIN Council and Commission levels have shown that there is an urgent 
need to continue improving the quality of fiscal statistics through enhanced monitoring of 
the  data  reported  by  Member  States  and  Candidate  Countries.  There  is  also  an  urgent 
need  for  a  detailed  study  of  the  statistical  systems  put  in  place  in  Member  States  and 
Candidate  Countries  in  order  to  assess  to  what  extent  they  are  properly  suited  to 
providing good quality data. 

The Communication adopted by the Commission on 1 December 2004 on accountability 
issues stemming from the revision of Greek budgetary data clearly shows that there is a 
need to reinforce the legal basis and to develop the operational capacities of Commission 
departments dealing with data monitoring. There is at present an urgent need to address 
the following issues: 

- Minimise risks that data reported by Member States in the context of the excessive 
deficit procedure do not meet the required quality and level of reliability. 

-  Extend  Commission  controls  to  an  appropriate  set  of  public  finance  indicators 
(especially  short-term  indicators)  needed  to  countercheck  the  quality  of  debt  and 
deficit figures. 

The  communication  entitled  "Towards  a  European  governance  strategy  for  fiscal 
statistics" adopted by the Commission on 22 December  proposes that the existing legal 
framework be completed by stronger data monitoring mechanisms designed to improve 
the  operational  capacities  of  Eurostat  and  ECFIN,  and  to  develop  minimum  European 
standards  for  the  institutional  set-up  of  statistical  authorities.  The  proposed  measures 
cover the two first lines of action included in this Communication. As for the third line of 
action, the Commission is working on a proposal for adoption by the College before June 
2005.  This  will  be  based  on  a  Code  of  Conduct  currently  being  drawn  up  by  the 
Commission together with Member States 

5.2. Value added of Community involvement and coherence of the proposal with 

other financial instruments and possible synergy 

EN 

16 

   EN 

 
 
 
 
 
The Commission has a major direct responsibility in analysing and assessing deficit and 
debt figures for correct implementation of the Stability and Growth Pact, and is obliged 
to  provide  the  statistics  on  the  excessive  deficit  procedure,  based  on  data  reported  by 
Member  States  and  Candidate  Countries.  This  is  an  important  role  to  be  played  by  the 
Commission  given  the  fact  that  the  Member  States  constitute  an  interested  party.  This 
enhanced  Community  involvement  will  also  increase  harmonisation  of  national 
approaches  and  tap  into  potential  synergies  by  including  experts  from  other  Member 
States in in-depth monitoring visits. 

5.3. Objectives, expected results and related indicators of the proposal in the context 

of the ABM framework 

The  Commission  has  a  major  responsibility  to  provide  an  independent  view  on  data 
quality under the protocol attached to the Maastricht Treaty and Council Regulation (EC) 
No 3605/1993. The main objectives would be to establish further monitoring of national 
systems  for  the  production  of  budgetary  statistics  and  to  minimise  cases  of  incorrect 
reporting of deficit and debt figures (as exemplified by the recent case in Greece). Better 
quality  data  are  expected  to  result,  based  on  a  more  reliable  and  consistent  approach. 
Detection of structural weaknesses in the system (systemic risk) and unreliable data will 
indicate  progress.    Key  indicators  will  be  the  number  of  ex-post  corrections  of  data  by 
Eurostat and the number of in-depth monitoring visits.  

5.4. Method of Implementation (indicative) 

Indicate the method(s)22 chosen for implementation of the action. 

⌧  Centralised Management 

⌧     Directly by the Commission 

   ٱ  

Indirectly by delegation to: 

      ٱ 

      ٱ 

      ٱ 

Executive Agencies 

Bodies set up by the Communities as referred to in 
Art. 185 of the Financial Regulation 

National  public-sector  bodies/bodies  with  public-
service mission 

ٱ  Shared or decentralised management 

22 

Where  more  than  one  method  is  indicated  please  provide  additional  details  in  the  "Relevant 
comments" section.  

EN 

17 

   EN 

 
 
   
                                                 
ٱ  With Member States 

ٱ  With third countries 

ٱ  Joint management with international organisations (please specify) 

Relevant comments: 

EN 

18 

   EN 

 
6.  MONITORING AND EVALUATION 

6.1. Monitoring system 

The quality of the data reported will be monitored by way of application of the provisions 
of the European system of national and regional accounts in the Community, as adopted 
by Regulation (EC) No 2223/96 (ESA 95), which forms the basis for the reporting and 
provision  of  statistical  data  in  the  context  of  the  excessive  deficit  procedure.  The 
statistical  systems  put  in  place  by  Member  States  and  Candidate  Countries  will  be 
checked against those systems already providing good quality figures.. Regular reports on 
the functioning of the systems and the results of the monitoring process (countries visited, 
problems encountered and solutions envisaged) will be submitted to the Commission, the 
Parliament and the Council. 

6.2. Evaluation 

6.2.1.  Ex-ante evaluation 

Recent  Council  meetings  have  concluded  that  the  independence  and  quality  of 
statistics  need  to  be  improved  and  the  Commission  has  been  asked  to  make 
proposals  in  this  area.  Given  the  urgency  imposed  by  the  Council,  the 
Commission has recently adopted two communications on this issue.   

6.2.2.  Measures taken following an intermediate/ex-post evaluation (lessons 

learned from similar experiences in the past) 

This is a new measure. 

6.2.3.  Terms and frequency of future evaluations 

In-depth monitoring visits will take place in each Member State in principle once 
every two years. The results of such evaluations will be brought to the attention of 
the Commission, the EFC/Council, the Parliament and the CMFB. The suitability 
of systems  providing public finance data in application of the  Maastricht Treaty 
will be regularly monitored by Eurostat. The possibility of moving to a risk-based 
approach to determine the visits could be considered. However, this will only be 
possible  after  each  country  concerned  has  been  visited  at  least  once,  in  order  to 
provide the essential input to such a decision.  

7.  ANTI-FRAUD MEASURES  

The proposal itself can be considered to be a measure designed to detect and mitigate any 
potential non-compliance of MS/CC with the established rules. In addition, to ensure the 
continuing  independence  and  integrity  of  the  inspection  capability,  a  policy  of  strict 
rotation  of  personnel  involved  in  visits  to  specific  Member  States  and  Candidate 
Countries will be introduced.  

EN 

19 

   EN 

 
8.  DETAILS OF RESOURCES 

8.1. Objectives of the proposal in terms of their financial cost 

(Headings  of  Objectives, 
actions  and  outputs  should 
be provided) 

Type of 
output 

Av. 
cost 

Year             

n 

Year             
n+1 

Year             
n+2 

Year             
n+3 

Year             
n+4 

Year n+5 and 
later 

TOTAL 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

Commitment appropriations in EUR million (to 3 decimal places) 

OPERATIONAL 
OBJECTIVE No.123……… 

   Action 1………………. 

         - Output 1 

         - Output 2 

Action 2………………. 

         - Output 1 

Sub-total Objective 1 

OPERATIONAL 
OBJECTIVE No.2  1……… 

   Action 1………………. 

         - Output 1 

Sub-total Objective 2 

OPERATIONAL 
OBJECTIVE No.n 1 

Sub-total Objective n 

TOTAL COST 

23 

As described under Section 5.3. 

EN 

20 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
8.2. Administrative Expenditure 

8.2.1.  Number and type of human resources 

Types of 
post 

Staff to be assigned to management of the action using existing and/or additional 
resources (number of posts/FTEs) 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 

Officials 
or 
temporary 
staff24 
(XX 01 
01) 

A*/AD 

5 Eurostat 

10 Eurostat 

10 Eurostat 

10 Eurostat 

10 Eurostat 

10 Eurostat 

2 ECFIN 

 5 ECFIN 

 5  ECFIN 

 5 ECFIN 

  5  ECFIN 

  5 ECFIN 

B*, 
C*/AST 

4 Eurostat 

 7 Eurostat 

 7 Eurostat 

  7 Eurostat 

  7 Eurostat 

  7 Eurostat 

Staff  financed25  by 
Art. XX 01 02 

staff26 
Other 
financed by  Art.  XX 
01 04/05 

TOTAL 

11 

 22 

 22 

 22 

 22 

22 

The  needs  for  human  and  administrative  resources  shall  be  covered  within  the  allocation 
granted to the managing Service in the framework of the annual allocation procedure. 

These staff needs could be met by up to a maximum of one third being non-statutory staff, it 
being  essential  to  maintain  the  core  of  a  team  responsible  for  independent  validation  of 
Member States data as permanent staff. The requirements after year (n+5) would depend on 
the possibility of moving to a risk-based approach for determining the frequency of visits. 

8.2.2.  Description of tasks deriving from the action 

A. Country-specific issues  

1.  Analysis  of  the  collection  and  reporting  systems  put  in  place  in  Member  States  and 
Candidate  Countries  for  government  accounts  (EDP  reporting),  and  identification  of 
systemic risks 

24 
25 
26 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
Cost of which is included within the reference amount. 

EN 

21 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
2.  Analysis of all data reported by Member States and Candidate Countries in the context 
of  government  accounts  (financial  accounts,  quarterly  sector  accounts,  revenue  and 
expenditure, EDP figures, figures published by other international organisations, etc.) 
3.  Analysis  of  the  collection  and  reporting  systems  put  in  place  in  Member  States  for 

economic accounts, and identification of systemic risks 

4.  Analysis of all data reported by Member States and Candidate Countries in the context 

of economic accounts 

5.  Fundamental in-depth  quality  checks by analysing  in  detail  the  sources  and  methods 
used  in  the  “inventories”  of  Member  States  for  economic  and  government  accounts 
(these documents could each be +/- 400 pages long) 

6.  In-depth monitoring visits to Member States and Candidate Countries after analysis of 
these inventories (the organisation of these visits would be similar to those conducted 
by other international organisations, such as the IMF) 

7.  Mission  reports,  which  will  deal  with  systemic  issues  linked  to  the  collection  and 
reporting  of  fiscal  and  economic  accounts  (in  line  with  the  IMF  reports  on  fiscal 
transparency on the basis of the reports on observance of standards and codes) 

B. General horizontal issues 

8.  Design  of  a  specific  structure  for  the  EDP  inventories  together  with  check-lists  for 
each section to ensure that the descriptions are systematic, consistent and comparable 
across countries 

9.  Set-up of evaluation/monitoring mechanism 
10. Definition  of  an  appropriate  set  of  indicators  needed  to  counter-check  the  quality  of 

debt and deficit statistics 

11. Production of the methodology for visits 
12. Production of the methodology for reports 
13. Development of the legislative framework and follow-up 
14. Development of the Code of Practice and follow-up 
15. Set-up of data requirements to support the visits 
16. Training of new staff 

C. Management, logistics and secretariat 

17. Management and overall coordination of the activities 
18. Relations with Member States for the selection of experts 
19. Working arrangements with EU committees and groups 
20. Preparation of documents for the various committees (CMFB, SPC, NAWP, FAWP, 

EFC, etc.) 

21. Secretariat assistance 

8.2.3.  Sources of human resources (statutory) 

EN 

22 

   EN 

 
 
 
 
 
 
 
 (When more than one source is stated, please indicate the number of posts originating from 
each of the sources) 

(cid:133) 

(cid:133) 

⌧ 

⌧ 

Posts currently allocated to the management of the programme to be replaced 
or extended 

Posts pre-allocated within the APS/PDB exercise for year n⌧ Posts  
to be requested in the next APS/PDB procedure 
8 (5 A*/AD + 3 B*, C*/AST) EUROSTAT 
3 (3 A*/AD) ECFIN 

Posts  to  be  redeployed  using  existing  resources  within  the  managing  service 
(internal redeployment) 
5 (3 A*/AD + 2 B*, C*/AST) EUROSTAT (new redeployment 2005) 
p.m. ECFIN undertook extensive internal redeployment in 2004 

Posts required for year n although not foreseen in the APS/PDB exercise of the 
year in question 
4 (2 A*/AD + 2 B*, C*/AST) EUROSTAT 
2 (2 A*/AD ) ECFIN 

EN 

23 

   EN 

 
 
 
 
 
 
 
 
 
 
8.2.4.  Other Administrative expenditure included in reference amount (XX 01 04/05 – 

Expenditure on administrative management) 

Budget line 

(number and heading) 

EUR million (to 3 decimal places) 

Year 
n 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n+5  

and 
later 

TOTAL 

Technical 

1 
and 
assistance (including related staff costs) 

administrative 

     Executive agencies27 

     Other 

technical  and  administrative 

assistance 

                  - intra muros  

                  - extra muros 

   Total  Technical  and  administrative 
assistance 

8.2.5.  Financial cost of human resources and associated costs not included in the 

reference amount 

EUR million (to 3 decimal places) 

Type of human resources 

Year n 

Year n+1  Year n+2  Year n+3  Year n+4 

Officials and temporary staff (XX 01 
01) 

0.9 * 

0.2# 

1.7* 

0.5# 

1.7* 

0.5# 

1.7* 

0.5# 

1.7* 

0.5# 

Year n+5 

and later 

1.7 /year* 

0.5#/year 

Staff  financed  by  Art.  XX  01  02 
(auxiliary, END, contract staff, etc.) 

(specify budget line) 

Total cost of Human Resources 
and associated costs (NOT in 
reference amount) 

* EUROSTAT 

1.1 

2.2  

 2.2 

2.2 

2.2 

2.2/year 

27 

Reference should be made to the specific legislative financial statement for the Executive Agency(ies) 
concerned. 

EN 

24 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
#ECFIN 

Calculation– Officials and Temporary agents 

 Reference should be made to Point 8.2.1, where applicable 

“Guidelines on the drafting of the legislative financial statement” used, i.e. EUR 100 000 per 
post indicated in § 8.2.1. 

Calculation– Staff financed under Art. XX 01 02 

 Reference should be made to Point 8.2.1, where applicable 

8.2.6 Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

Year n 

0.03 *  

#0.02 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

0.10* 

0.10* 

0.10* 

0.10* 

0.075# 

0.075# 

0.075# 

0.075# 

TOTAL 

Year 
n+5 

and 
later 

0.10* 

/year 
0.075#/
year 

     XX 01 02 11 01 – Missions 

     XX  01  02  11  02  –  Meetings  & 
Conferences 

     XX 01 02 11 03 – Committees28  

0.04* 

0.18* 

0.18* 

0.18* 

0.18* 

0.18* 

/year 

28 

Specify the type of committee and the group to which it belongs. 

EN 

25 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
     XX 01 02 11 04 – Studies & consultations 

     XX 01 02 11 05 - Information systems 

 2 

  Total  Other  Management 
Expenditure (XX 01 02 11) 

3  Other 

expenditure 

administrative  nature 
including reference to budget line) 

of 
an 
(specify, 

Total Administrative expenditure, 
other than human resources and 
associated costs (NOT included in 
reference amount) 

0.07* 

0.02# 

0.28* 

0.28* 

0.28* 

0.28* 

0.075# 

0.075# 

0.075# 

0.075# 

0.28* 

/year 

0.075# 
year 

* EUROSTAT  # ECFIN 

Calculation - Other administrative expenditure not included in reference amount 

- year n: 4 in-depth monitoring visits + planning missions 

- future years: 16 inspections per year 

- each inspection visit: 

- 1 A, 1 B staff EUROSTAT 

-  2  external  experts  to  assist  EUROSTAT  (the  external  experts  will  be  paid  by 

Member States, and only mission costs will be covered by the Commission). 

-  total  duration  for  EUROSTAT  staff  and  external  experts:  4  weeks:  1  week 

preparation in Luxembourg, 2 weeks field, 1 week conclusion in Luxembourg    

- 2 A ECFIN 

-  total  duration  for  ECFIN  staff:  1  preparation  day  in  Luxembourg,  1  week  field,    1 

conclusion day in Luxembourg 

* EUROSTAT 

#ECFIN 

EN 

26 

   EN