5 Statistics
(30664)
10343/09
COM(09) 238
| Draft 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
|
Legal base | Article 269 EC; consultation; unanimity
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Department | HM Treasury |
Basis of consideration | Minister's letter of 14 July 2009
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Previous Committee Report | HC 19-xxii (2008-09), chapter 4 (1 July 2009)
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To be discussed in Council | Not known
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Committee's assessment | Politically important
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Committee's decision | Not cleared; further information requested
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Background
5.1 "Financial intermediation services indirectly measured"
(FISIM) is an estimate of the value of the services provided by
financial intermediaries, typically banks, for which no explicit
price is charged rather these services are paid for as
part of the margin between rates applied to savers and borrowers.
The allocation of FISIM within the Community system of national
and regional accounts (the European System of Accounts 1995, ESA
95) in order to establish gross national income (GNI) was defined
in Council Regulation (EC) No. 448/98 and was implemented from
1 January 2005 by Commission Regulation (EC) No. 1889/2002. However,
for the purposes of the Communities' budget and own resources[15]
the allocation of FISIM is not automatically applied, instead:
- adoption of a Council Decision modifying ESA 95 is required
under Article 8(1) of Council Regulation (EC) No. 448/98; and
- if it is established that the allocation of FISIM
constitutes a significant change in GNI, the Council shall decide,
under Article 2(7) of the Own Resources Decisions (ORDs) of 29
September 2000 and 7 June 2007, that such modifications apply
for the purposes of both the ORDs.
5.2 In May 2009, in presenting this draft Decision
the Commission:
- considered that allocation
of FISIM in establishing GNI used for the purposes of the Communities'
budget and 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 ORDs;
- noted that Commission Regulation (EC) No. 1889/2002
required Member States to allocate FISIM in their annual ESA 95
data transmissions and that this requirement had not been complied
with fully until the transmission of ESA data in September or
October 2008; and
- noted that, as the requirement had now been complied
with, the Commission was able to put forward this proposal.
5.3 The draft Decision is intended to allocate FISIM
for establishing GNI used for the purposes of own resources by
modifying ESA 95 in accordance with Council Regulation (EC) No.
448/98 and to apply the modification in accordance with the ORDs.
The proposal would enter into effect retrospectively to 1 January
2005, in line with the entry into effect of Commission Regulation
(EC) No. 1889/2002 (and so affect own resource calculations made
under the first ORD).
5.4 When we considered this proposal earlier this
month we:
- said that, clearly, FISIM would
have to be taken into account in calculating GNI for the purposes
of assessing the own resources liabilities of Member States;
- noted, however, the Government's seemingly well-founded
caution on the timing of the proposal;
- said, therefore, that before considering the
draft Decision further we wanted to hear the outcome of the Government's
attempt to secure a cautious approach to the matter; and
- asked also to hear about the clarification being
sought of the possible financial impact of the proposal.
Meanwhile the document remained under scrutiny.[16]
The Minister's letter
5.5 The Economic Secretary to the Treasury (Ian Pearson)
tells us that there was an initial discussion of the proposal
in the Council's Own Resources Working Group on 6 July 2009. The
Minister says that at this meeting:
- a number of Member States,
notably the Netherlands, Germany and Ireland, shared the Government's
concerns over the timing of the proposal;
- other Member States voiced concerns about the
proposal being retrospective; and
- no conclusions were formed, although it was suggested
to the Commission that a better time to deal with the issue would
be as part of any change to the own resources system resulting
from decisions on the next Financial Perspective and from the
next change to the ESA, both of which are due in 2014.
5.6 The Minister adds that there will be further
meetings of the Working Group in September and October 2009 and
that the Commission has undertaken to provide Member States with
data on the financial implications of the proposal before the
first of those meetings.
Conclusion
5.7 We are grateful to the Minister for this interim
report and look forward to hearing about both further developments
on the timing of the proposal and the Commission's promised information
on the possible financial impact of the proposal.
5.8 Meanwhile the document continues to remain
under scrutiny.
15 There are four sources of Community revenue, or
"own resources" - customs duties including those on
agricultural products, sugar levies, contributions based on VAT
and GNI-based contributions.
Back
16
See headnote. Back
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