Explanatory Memorandum to COM(2017)329 - Harmonisation of gross national income at market prices (GNI Regulation) - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2017)329 - Harmonisation of gross national income at market prices (GNI Regulation). |
|---|---|
| source | COM(2017)329  |
| date | 20-06-2017 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Gross national income (GNI) constitutes the basis for calculating the largest share of own resources in the budget of the European Union (EU). Council Regulation (EC, Euratom) No 1287/2003 of 15 July 2003 on the harmonisation of gross national income at market prices (the ‘GNI Regulation’) 1 lays down the statistical basis for calculating and verifying GNI statistics for own resources.
The Commission considers it necessary to revise the GNI Regulation for the following reasons:
–A new ‘own resources decision,’ Council Decision 2014/335/EU, Euratom on the system of own resources of the European Union, 2 was adopted on 26 May 2014 and entered into force on 1 October 2016. This Decision states that for own resources purposes the GNI of Members States shall be defined in accordance with Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European system of national and regional accounts in the European Union (ESA 2010)
–ESA 2010 3 was adopted on 21 May 2013 and in September 2014 became the new standard for calculating national accounts in the EU. This replaces Council Regulation (EC) No 2223/96 of 25 June 1996 on the European system of national and regional accounts in the Community 4 (ESA 95).
–The European Court of Auditors' Special Report No 11/2013, ‘Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification’ 5 made a number of recommendations on ways to improve this work.
–The ‘Communication from the Commission to the European Parliament and the Council on the production method of EU statistics: a vision for the next decade’ 6 lays down, inter alia, proposals for integrating statistical production processes, such as harmonising the transmission dates for national accounts data and building them into a single IT system.
–Because GNI data is used for purposes other than own resources and in order to maintain statistical integrity, a different legal basis for the production of statistics, Article 338(1) of the Treaty on the Functioning of the European Union (TFEU), is deemed to be more appropriate than the existing legal basis, Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the Communities' own resources 7 , which, in any case, was repealed.
–The European Statistical System (ESS) has decided to concentrate its comitology powers in one committee, the European Statistical System Committee (ESSC); this means that the current GNI Committee should be replaced by a formal expert group.
• Consistency with existing policy provisions in the policy area
The proposal is very similar in content to Regulation (EC, Euratom) No 1287/2003. However provisions of the proposal will be split between a Regulation adopted by the Council and the European Parliament and a Commission Decision defining the work of the formal expert group that will be replacing the GNI Committee.
• Consistency with other Union policies
Not applicable.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
Article 338 TFEU provides the legal basis for European statistics. Pursuant to Article 338(1), the European Parliament and the Council, acting under the ordinary legislative procedure, adopt measures for the production of statistics where this is necessary for the EU to carry out its role. Article 338(2) sets out the requirements for the production of European statistics, stating that they must conform to standards of impartiality, reliability, objectivity, scientific independence, cost-effectiveness and statistical confidentiality.
Using Article 338(1) TFEU as the legal basis is a change from Regulation (EC, Euratom) No 1287/2003 whose legal basis was Article 8(2) of the previous own resources decision, Decision 2000/597/EC, Euratom. The new own resources decision (Council Decision 2014/335/EU, Euratom) does not contain a similar legal basis for adopting a new GNI Regulation.
The main purpose of this Regulation is to align GNI to Regulation (EU) No 549/2013 which legal basis is also Article 338 (1). Besides, GNI data is used for purposes other than own resources, in particular national economic policies and various Union policies. In view of the foregoing, Article 338(1) TFEU constitutes a relevant and appropriate legal basis. By using Article 338 (1) TFEU, it is possible to take into account and support the policy outlined in the new own resources decision and at the same time stress the statistically wider reaching content of this new proposed Regulation.
• Subsidiarity (for non-exclusive competence)
The subsidiarity principle applies insofar as the proposal does not fall within the exclusive competence of the Union.
The proposal for this Regulation has been drafted with a view to reinforcing the comparability, reliability and exhaustiveness of the GNI aggregate. GNI data can only be verified at EU level to determine EU budget contributions. Member States acting independently cannot sufficiently achieve the objectives of the proposed action with the view of ensuring comparability, reliability and exhaustiveness. Action can be taken more efficiently at EU level, on the basis of an EU legal act.
Contents
- The Union may therefore adopt measures in this area in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty
- Preamble and recitals
- Article 1: Definition
- Article 2: Forwarding of data, revisions and quality reports
- Article 3: the GNI inventory
- Article 4: GNI expert group
- Article 5: Verification procedure. Clarifications on the correct implementation of ESA. Improvement of compilation procedures
- Article 6: Information visits
- Article 7
- Article 8: Report
- Article 9: Repeal of existing legislation
The Union may therefore adopt measures in this area in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty
• Proportionality
The proposal covers the collection of GNI data. According to Article 10(1) of ESA 2010, which is a transitional provision, the definitive uniform arrangements for the collection of own resources should continue to be ESA 95 while Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system of the European Communities’ own resources 8 remains in force. Decision 2007/436/EC, Euratom has now been replaced, and therefore the collection of GNI data needs to be adapted accordingly.
The proposed changes to the situation under Regulation (EC, Euratom) No 1287/2003 consist of adapting the GNI data reporting to ESA 2010 and introducing the ESSC as the relevant comitology committee instead of the GNI Committee as part of a new ESS structure to improve coordination and partnership in a clear pyramid structure within the ESS, with the ESSC as the highest strategic body. In February 2012, 9 the ESSC supported this new approach.
This does not go beyond what is necessary to achieve the Regulation's objectives.
• Choice of the instrument
The instrument is the same one used for the current legislation. However, a future Commission decision setting up the GNI expert group once this Regulation has entered into force will be required.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
It should be noted that this Regulation is a simple update of the existing one which is necessitated to take account of the new legal basis, the new own resources decision and related legislation, ESA 2010, and the recommendations by the European Court of Auditors in its special audit.
Based on Commission standards, Eurostat’s system for evaluating existing legislation, including the evaluation of the European Statistical Programme 10 was followed, and formed a central part of the whole process. In addition user surveys are conducted every year in order to obtain better knowledge about users, their needs and their satisfaction with the services provided by Eurostat. Evaluation results are used by Eurostat to improve the process of producing statistical information and its statistical output. They feed into various strategic plans, such as the work programme and the management plan.
Rolling reviews on Eurostat's products were carried out amongst stakeholder (users and Member States) regularly until 2013. The most recent one for National Accounts took place in 2010 11 . The coverage was the whole of the set of national accounts, but the findings are relevant to GNI which is a key aggregate.
The user satisfaction measured by the Satisfaction Index (SI) 12 for a number of factors. The SI for comparability between countries and regions (a key element in this proposal) was 0.8. A recommendation on improving the metadata was implemented.
Concerning the GNI Committee, which will be replaced by the formal expert group, there were high SI scores for the possibility of Member States contributing and preparing decisions inside the GNI Committee (1.0), the role of the GNI Committee in contributing to the development of methodology in the field of National Accounts (1.0) and the general effectiveness of the GNI Committee (0.83). In respect of the latter and in response to the free comments, improvements have been made with regard to the language of the meetings (now held in English as technical issues were not always well-understood by interpreters) and availability of the GNI inventories. A proposal to find the best methodological solution for the calculation and allocation of FISIM was also implemented.
Each year the GNI Committee, at its autumn meeting, gives an opinion on the appropriateness of the GNI data for own resources purposes. The opinion has always been positive.
• Stakeholder consultations
The proposal was discussed in detail at GNI Committee meetings in 2012 (two sessions), 2013 (two sessions), 2015 (one session) and 2016 (two sessions). There is support for the proposal on the forwarding of data and quality reports, the GNI Inventories, the improved integration of the GNI Committee in the general governance structure of the European Statistical System (ESS), the verification procedure and information visits. The GNI Committee welcomes the proposed alignment of the GNI notification date with the ESA transmission programme and the EDP notification date of 30 September.
The European Statistical System Committee (ESSC) endorsed the text at its meeting in May 2013 and was consulted on a revised text in May 2017. The meeting of directors of macroeconomic statistics was also regularly informed of developments.
• Collection and use of expertise
The national statistical authorities in the Member States were consulted within the frame of the GNI Committee and the meeting of directors of macroeconomic statistics (see above).
This proposal also incorporated the recommendations of the European Court of Auditors in its special report on GNI.
• Impact assessment
The proposal imposes less of a burden on Member States than the current situation because without a switch to ESA 2010 for own resources, Member States could be required to produce a double set of accounts, one on each standard. Synchronising data transmission for GNI own resources with data transmission for other national accounting purposes (e.g. national accounts aggregates, excessive debt and deficit statistics) also reduces the burden of reporting for Member States.
Switching to ESA 2010 will improve the quality of data used for GNI own resources.
• Regulatory fitness and simplification
The proposal meets the simplification objectives of the REFIT programme partly by synchronising data transmission for GNI own resources with data transmission for other national accounting purposes, partly by switching to ESA 2010 for own resources in order to avoid Member States producing a double set of accounts, one on ESA 2010 and one on ESA 95.
Since the proposal only affects the national accountants in Member States, businesses are unaffected by the proposal.
• Fundamental rights
Not applicable.
4. BUDGETARY IMPLICATIONS
No supplementary budgetary resources are needed.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
As was the case for the current GNI Regulation, a report on its application is envisaged after three years, i.e before 31 December 2022. This will cover issues such as the timeliness and quality of GNI inventories and of the GNI data, the functioning of the ESSC and formal expert group and improvements made to GNI.
No sooner than five years after the date of application of this Regulation, the Commission shall carry out an evaluation of this Regulation and present a Report on the main findings to the European Parliament and the Council. The evaluation shall be conducted according to the Commission's Better Regulation Guidelines 13 .
Member States shall provide the Commission with necessary information for the preparation of that Report.
The verification of GNI for own resources is thoroughly examined by the European Court of Auditors in the 'Revenue' chapter of its annual report.
The activities in this field are reported on to the meeting of directors of macroeconomic statistics biannually.
• Explanatory documents (for directives)
None.
• Detailed explanation of the specific provisions of the proposal
The structure of the proposal is based on the current GNI Regulation. The main changes are summarised as follows:
To emphasise statistical integrity when compiling and harmonising GNI, the legal basis is Article 338(1) TFEU. A reference to the new statistical law 14 and the European statistics code of practice 15 has been added as have references to own resources legislation.
This article defines GDP and GNI. There is no substantial change; it is an update of the standard to be used from ESA 95 to ESA 2010.
It is proposed that data be forwarded to Eurostat by 30 September instead of 22 September. This is to be in sync with the date of other data transmissions of national accounts and therefore to reduce the response burden for Member States.
Adaptation to ESA 2010. Because of the length of the procedure to ratify the own resources legislation, the deadline for providing the inventories has already passed. This article also foresees a timetable for updating the inventories.
The Commission has proposed a new ESS structure to improve coordination and partnership in a clear pyramid structure within the ESS, with the ESSC as the highest strategic body. One aspect of this streamlining is to concentrate comitology powers in the hands of the ESSC. In February 2012, 16 the ESSC supported this new approach. As a result, the non-comitology work currently undertaken in the GNI Committee, including an annual opinion on the appropriateness of the GNI data submitted each year by the Member States for own resources will be the responsibility of a new formal expert group to be established by the Commission. The definition of most of the non-comitology tasks defined in the current GNI Regulation for the GNI Committee now pass to the Commission Decision.
Article 5: Verification procedure. Clarifications on the correct implementation of ESA. Improvement of compilation procedures
The Commission will continue to be responsible for verifying the sources and methods of GNI. With the adoption of ESA 2010, the Commission also becomes responsible for clarifying the correct implementation of ESA 2010.
The wording of the current GNI Regulation allows for ‘information visits’ but is vague on what they should entail. These visits could look into either ‘qualitative’ (i.e. compliance with ESA 2010) or ‘quantitative’ (i.e. direct verification of calculations) issues. The European Court of Auditors has recommended to the Commission (Eurostat) to focus more on the latter.
The reason for having a different type of information visits for GNI than those for the other own resources is that, whilst the knowledge of the methodology of the ESA is more likely to be found in Eurostat, the practical expertise of implementing that methodology for producing national estimates is more prevalent in the Member States.
The ESSC is assigned the role of assisting the Commission with the adoption of comitology measures needed to harmonise GNI. The ESSC therefore replaces the GNI Committee, which will cease to exist.
The Commission will report to the European Parliament and to the Council.
With the repeal of the current GNI Regulation and the GNP Directive, the decisions made under those instruments need to be maintained.