Proposal for a Council Decision on the allocation of financial intermediation services indirectly measured (FISIM) for the establishment of the gross national income (GNI) used for the purposes of the European Communities' budget and its own resources
Date: 2009-05-26
Institutions: European Commission
Subjects: Economic and Monetary Union, European accounting system, disclosure of information, financial analysis, financial statistics, gross national product, national income, own resources

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.5.2009 
COM(2009) 238 final 

2009/0068 (CNS) 

Proposal for a 

COUNCIL DECISION 

on the allocation of financial intermediation services indirectly measured (FISIM) for 
the establishment of the gross national income (GNI) used for the purposes of the 
European Communities' budget and its own resources 

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EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

'Financial  intermediation  services  indirectly  measured'  (FISIM)  represent  a  part  of  the 
production of financial institutions (banks, typically) which is not delivered under the form of 
direct sales of services with a fixed price, but by means of charging a higher rate of interest 
for loans than the one used for deposits (interest differential). 

The  allocation  of  FISIM  within  the  European  system  of  national  and  regional  accounts 
(ESA 95)  was  defined  in  Council  Regulation (EC) No 448/98  of  16 February 1998,  which 
completed  and  amended  Council  Regulation (EC) No 2223/96  of  25 June 1996  and  was 
implemented  from  1 January 2005  onwards  by  Commission  Regulation (EC) No 1889/2002 
of 23 October 2002. 

However, for the purposes of the Community's budget and its own resources, the allocation of 
FISIM is not automatically applied. Firstly, by way of specific derogation, the adoption of a 
unanimous  Council  decision  on  the  basis  of  a  Commission  proposal  is  required  under 
Article 8(1)  of  Council  Regulation (EC) No 448/98.  Secondly,  if  it  is  established  that  the 
allocation  of  FISIM  constitutes  a  significant  change  in  the  GNI,  under  the  second 
subparagraph  of  Article 2(7)  of  respectively  Council  Decision 2000/597/EC,  Euratom  of 
29 September 2000 and Council Decision 2007/436/EC, Euratom of 7 June 2007 the Council, 
acting  unanimously  on  a  proposal  of  the  Commission  and  after  consulting  the  European 
Parliament,  shall  decide  whether  these  modifications  apply  for  the  purposes  of  both  these 
Decisions. 

The  allocation  of  FISIM  for  establishment  of  the  GNI  used  for  the  purposes  of  the 
Community's  budget  and  its  own  resources  would  have  a  significant  impact  on  Member 
States'  estimated  own  resources  contributions  and  would  also  modify  the  ceilings  for 
payments  and  commitments  as  established  under  the  respective  Article 3  of  both  Decisions. 
For these reasons the Commission considers that the allocation of FISIM results in significant 
changes in the GNI. 

The present Commission Communication includes therefore a proposal for Council Decision 
in which: 

-  Based  on  Article 8(1)  of  Council  Regulation No 448/98,  Article 1  disposes  that  FISIM 
would  now  be  allocated  for  the  establishment  of  the  Gross  National  Income  (GNI)  for  the 
purposes of the European Communities' budget and its own resources. 

-  Based  on  the  second  subparagraph  of  Article 2(7)  and  on  Article 3  of  Council 
Decision 2000/597/EC,  Euratom,  Article 2  disposes  that  FISIM  applies  for  the  purposes  of 
this Decision from 1 January 2005 to 31 December 2006. 

-  Based  on  the  second  subparagraph  of  Article 2(7)  and  on  Article 3  of  Council 
Decision 2007/436/EC,  Euratom,  Article 3  disposes  that  FISIM  applies  for  the  purposes  of 
this Decision from 1 January 2007. 

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2. 

ALLOCATION OF FISIM FOR THE PURPOSE OF COMMUNITY'S OWN RESOURCES. 

2.1. 

Availability of ESA 95 data with FISIM allocated 

Council Regulation (EC) No 448/98 defined the allocation of FISIM in ESA 95 and requested 
from  Member  States  the  Submission  of  the  results  of  calculations  during  a  trial  period 
(Article 4) followed by an Evaluation of results (Article 5). This evaluation was satisfactory 
and  Council  Regulation (EC) No 448/98  was  then  eventually  implemented  by  Commission 
Regulation (EC) No 1889/2002,  which  applied  from  1 January 2005  (Article 2)  and  obliged 
Member States to allocate FISIM in ESA 95 data transmission. 

In  their  September/October 2008  transmission  of  ESA 95  data,  all  Member  States  complied 
with  this  requirement  for  the  first  time,  enabling  the  Commission  to  submit  the  present 
proposal. 

2.2. 

Allocating FISIM to the GNI used for own resources purposes 

Article 8(1)  of Council  Regulation (EC) No 448/98  stipulates: "By  way  of  derogation  to this 
Regulation, the decision to allocate FISIM for the establishment of the GNP [Gross National 
Product,  later  replaced  by  the  concept  of  GNI,  from  2002  onwards,  pursuant  to  the  first 
subparagraph  of  Article 2(7)  of  Decision (EC) No 2000/597]  used  for  the  purposes  of  the 
Community's  budget  and  its  own  resources  shall  be  adopted  by  the  Council,  acting 
unanimously,  on a proposal from the  Commission".  This means that, by way  of  derogation, 
Council Regulation (EC) No 448/98, which amended ESA 95 with respect to the allocation of 
FISIM,  does  not  apply  for  the  establishment  of  the  GNI  used  for  the  purposes  of  own 
resources. 

The object of the present proposal (article 1) is to have Council decide that FISIM should be 
allocated for the establishment of the GNI used for the purposes of own resources. Indeed, it 
is appropriate to use the most recent statistical concepts for the purposes of own resources and 
accordingly to define the GNI as provided by the Commission in application of the ESA 95 in 
accordance with Council Regulation (EC) No 2223/96 as subsequently modified. 

2.3. 

Applying the allocation of FISIM for the purposes of Decision (EC) No 2000/597 

The  second  subparagraph  of  Article 2(7)  of  Decision (EC) No 2000/597  stipulates:  "Should 
modifications  to  the  ESA 95  result  in  significant  changes  in  the  GNI  as  provided  by  the 
Commission,  the  Council,  acting  unanimously  on  a  proposal  of  the  Commission  and  after 
consulting the European Parliament, shall decide whether these modifications shall apply for 
the purposes of this Decision". Allocating FISIM increases GNI by more than 1 % in average 
which,  when  applying  the  method  decribed  in  Article 3  of  Decision (EC) No 2000/597, 
implies notably a change in the ceilings set by this article. This means that allocating FISIM is 
a significant change in the sense of above second subparagraph of article 2(7). 

The object of the present proposal (article 2) is to apply, for the years 2005 & 2006 only, the 
allocation of FISIM for the purposes of Decision (EC) No 2000/597. 

2.4. 

Applying the allocation of FISIM for the purposes of Decision (EC) No 2007/436 

The  second  subparagraph  of  Article 2(7)  of  Decision (EC) No 2007/436  stipulates:  "Should 
modifications  to  the  ESA 95  result  in  significant  changes  in  the  GNI  as  provided  by  the 

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Commission,  the  Council,  acting  unanimously  on  a  proposal  of  the  Commission  and  after 
consulting the European Parliament, shall decide whether these modifications shall apply for 
the purposes of this Decision". Allocating FISIM increases GNI by more than 1 % in average 
which,  when  applying  the  method  decribed  in  Article 3(3)  of  Decision (EC) No 2007/436, 
implies notably a change in the ceilings set by this article. This means that allocating FISIM is 
a significant change in the sense of above second subparagraph of article 2(7). 

The object of the present proposal (article 3) is to apply, from 2007 onwards, the allocation of 
FISIM for the purposes of Decision (EC) No 2007/436. 

2.5. 

Entry into force and effect 

Entry  into  effect  is  set  as  from  1 January 2005,  in  line  with  the  entry  into  effect  of 
Commission Regulation (EC) No 1889/2002. 

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2009/0068 (CNS) 

Proposal for a 

COUNCIL DECISION 

on the allocation of financial intermediation services indirectly measured (FISIM) for 
the establishment of the gross national income (GNI) used for the purposes of the 
European Communities' budget and its own resources 

(//EC, Euratom) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  second  subparagraph  of  Article 2(7)  of  respectively  Council 
Decision 2000/597/EC,  Euratom  of  29 September 2000  and  Council  Decision 2007/436/EC, 
Euratom of 7 June 2007 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Having regard to the opinion of the Court of Auditors2, 

Whereas: 

(1) 

(2) 

Article 8(1)  of  Council  Regulation (EC) No 448/98  of  16 February 1998  completing 
and amending Regulation (EC) No 2223/96 with respect to the allocation of financial 
intermediation  services  indirectly  measured  (FISIM)  within  the  European  system  of 
national and regional accounts (ESA)3 provides that the decision to allocate financial 
intermediation services indirectly measured (FISIM) for the establishment of the Gross 
National  Product  used  for  the  purposes  of  the  Community's  budget  and  its  own 
resources shall be adopted by the Council. The concept of Gross National Product was 
from 2002 onwards replaced by the concept of Gross National Income (GNI), pursuant 
to the first subparagraph of Article 2(7) of Council Decision 2000/597/EC, Euratom of 
29 September 2000 on the system of the European Communities' own resources4. 

It  is  appropriate  to  use  the  most  recent  statistical  concepts  for  the  purposes  of  the 
Community's budget and its own resources, in particular as far as the establishing the 
GNI as provided by the Commission in application of the European system of national 
and regional accounts (ESA 95) is concerned. FISIM should be therefore allocated for 
the establishment of the GNI for the purposes of the Community's budget and its own 
resources. 

1 
2 
3 
4 

OJ C [...], [...], p. [...]. 
OJ C [...], [...], p. [...]. 
OJ L 58, 27.2.1998, p. 1. 
OJ L 253, 7.10.2000, p. 42. 

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(3) 

(4) 

(5) 

(6) 

(7) 

to 

the 

second 

of  Article 2(7) 

According 
of  Council 
subparagraph 
Decision 2000/597/EC,  Euratom,  where  modifications  to  the  European  system  of 
national  and  regional  accounts  result  in  significant  changes  in  the  Gross  National 
Income  as  provided  by  the  Commission,  the  Council  has  to  decide  whether  those 
modifications  shall  apply  for  the  purposes  of  that  Decision.  Similarly,  the  second 
subparagraph  of  Article 2(7)  of  Council  Decision 2007/436/EC,  Euratom  of 
7 June 2007  on  the  system  of  the  European  Communities’  own  resources5  provides 
that  where  modifications  to  the  European  system  of  national  and  regional  accounts 
result  in  significant  changes  in  the  Gross  National  Income  as  provided  by  the 
Commission, the Council has to decide whether those modifications shall apply for the 
purposes of that Decision. 

The  allocation  of  FISIM  results  in  a  significant  change  in  the  sense  of  the  second 
subparagraph  of  Article 2(7)  of  Decision 2000/597/EC,  Euratom  since  it  increases 
GNI by more than 1 % in average and implies, when applying the method described in 
Article 3  of  that  Decision,  a  change  in  the  ceilings  set  by  that  Article.  For  the  same 
reasons,  the  allocation  of  FISIM  results  in  a  significant  change  in  the  sense  of  the 
second subparagraph of Article 2(7) of Decision 2007/436/EC, Euratom.  

Therefore  the  allocation  of  FISIM  should  apply  for  the  purposes  of  Decisions 
2000/597/EC, Euratom and 2007/436/EC, Euratom. 

Commission  Regulation (EC) No 1889/2002 
implementation of Council Regulation (EC) No 448/98 applies from 1 January 2005. 

23 October 2002 

on 

of 

the 

For reasons of coherence, this Decision should therefore take effect on 1 January 2005. 
Accordingly, the allocation of FISIM for the establishment of GNI for the purposes of 
the  Community's  budget  and  its  own  resources  should  apply  for  the  purposes  of 
Decision 2000/597/EC, Euratom from 1 January 2005 to 31 December 2006, because 
that Decision was repealed by Decision 2007/436/EC, Euratom as of 1 January 2007. 
That allocation should apply for the purposes of Decision 2007/436/EC, Euratom from 
1 January 2007, when that Decision took effect, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Financial intermediation services indirectly measured shall be allocated for the establishment 
of  the  gross  national  income  for  the  purposes  of  the  Community's  budget  and  its  own 
resources. 

Article 2 

The  allocation  of  financial  intermediation  services indirectly  measured pursuant  to Article 1 
shall  apply  for  the  purposes  of  Decision 2000/597/EC,  Euratom  from  1 January 2005  to 
31 December 2006. 

5 

OJ L 163, 23.6.2007, p. 17. 

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The  allocation  of  financial  intermediation  services  indirectly measured  pursuant to Article 1 
shall apply for the purposes of Decision 2007/436/EC, Euratom from 1 January 2007. 

Article 3 

This Decision shall enter into force on the day of its publication in the Official Journal of the 
European Union. 

Article 4 

It shall take effect on 1 January 2005. 

Done at Brussels, 

For the Council 
The President 

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