Document ID: 31998R1687

COUNCIL REGULATION (EC) No 1687/98 of 20 July 1998 amending Commission Regulation (EC) No 1749/96 concerning the coverage of goods and services of the harmonised index of consumer prices
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 2494/95 of 23 October 1995 concerning harmonised indices of consumer prices (1), and in particular Article 4 and Article 5(3) thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Central Bank (2),
Whereas, by virtue of Article 5(1)(b) of Regulation (EC) No 2494/95, each Member State is required to produce a harmonised index of consumer prices (HICP) starting with the index for January 1997; whereas the requirement to produce HICPs in no way puts in question the right of Member States to publish their national, non-harmonised, inflation indices, which they may wish to use for national policy purposes;
Whereas Commission Regulation (EC) No 1749/96 of 9 September 1996 on initial implementing measures for Council Regulation (EC) No 2494/95 concerning harmonised indices of consumer prices (3) sets down an initial coverage for HICPs that was restricted to those goods and services covered by all or most national consumer price indices (CPIs); whereas the prices to be taken for the HICP, in particular the treatment of subsidies, rebates and reimbursements, require harmonised definitions; whereas the geographic and population coverage of the HICPs need still to be specified;
Whereas Article 3 of Regulation (EC) No 2494/95 requires that the HICP be based on the prices of goods and services available for purchase in the economic territory of the Member State for the purposes of directly satisfying consumer needs; whereas prices not actually paid by consumers in such purchases or opportunity costs or interest payments are not appropriate for international comparisons of consumer price inflation;
Whereas it is recognised that changes in reimbursements might not have an impact on measures of inflation in a broader context but whereas they do form an essential part of the inflationary process affecting consumers and therefore need to be reflected in the HICP;
Whereas the Statistical Programme Committee (SPC) has not delivered an opinion within the time limit set by its chairman; whereas, in this case, following the procedure laid down in Article 14(2) of Regulation (EC) No 2494/95, the Commission has to, without delay, submit to the Council a proposal relating to the measures to be taken,
HAS ADOPTED THIS REGULATION:
Article 1
Regulation (EC) No 1749/96 shall be amended as follows:
1. Annex I shall be replaced by Annexes Ia and Ib to this Regulation;
2. in the first indent of Article 1 the word 'initial` shall be deleted;
3. subparagraph (a) of Article 2 shall be replaced by the following:
'(a)(1) The "coverage" of the HICP is defined as those goods and services which are included in household final monetary consumption expenditure, as referred to in (a)(2). It is classified according to the four-digit categories and sub-categories given in Annex Ia, which derive from the COICOP international classification and shall be known as COICOP/HICP (classification of individual consumption by purpose adapted to the needs of HICPs).
(a)(2) "Household final monetary consumption expenditure" is defined as that part of final consumption expenditure which is incurred by households in monetary transactions in one or both of the time periods being compared, and specified in Annex Ib. Unless otherwise stated, Annex Ib follows the definitions laid down in the European System of Accounts (ESA) 1995 contained in Regulation (EC) No 2223/96 (*). "Household final monetary consumption expenditure" consists of expenditure incurred on goods and services that are used for the direct satisfaction of individual needs or wants either by:
(a)(2)(a) resident households on the domestic territory or abroad; or
(a)(2)(b) resident and non-resident households on the domestic territory; or
(a)(2)(c) the population of households within the scope of the national household budget survey.
(a)(3) Prices used in the HICP are the purchase prices paid by households to purchase individual goods and services in monetary transactions. Where goods and services have been available to consumers free of charge, and subsequently an actual price is charged, then the change from a zero price to the actual price, and vice versa, should be taken into account in the HICP.
(a)(4) The "weights" of the HICP are the aggregate expenditure by households on any set of goods and services covered by the HICP expressed as a proportion of the total expenditure on all goods and services covered.;
(*) OJ L 310, 13. 11. 1996, p. 1.`
4. Article 3 shall be replaced by the following:
'Article 3
Coverage
1. HICPs compiled from price changes and weights for each category of household final monetary consumption expenditure given in Annex Ia accounting for more than one part in a thousand of the total expenditure covered by all those categories included as specified in paragraph 2, shall be deemed comparable.
2. The coverage of the HICP shall be extended, as follows:
(a) starting with the production of the HICP for January 1997, Member States shall process the data collected covering those categories marked as "initial coverage" as specified in Annex Ia;
(b) on, but not before, the production of the HICP for December 1999, Member States shall process the data collected covering also those categories marked as "December 1999" as specified in Annex Ia.`;
5. in Article 4 the words 'Annex I` shall be replaced by the words 'Annex Ia`.
Article 2
Taking into account the views of the committee set up by Decision 89/382/EEC, Euratom (4), the Commission shall within two years of the date of entry into force of this Regulation compile a report and submit it to the Council. The report shall assess the operation of the provisions of this Regulation, in particular the concept of household final monetary consumption expenditure in relation to relevant alternative concepts. Following this report the Commission may, if necessary, submit appropriate initiatives to the Council for the modification of this Regulation.
Article 3
This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 20 July 1998.

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