10 Statistics
| (35070)
11177/13
COM(13) 342
| Draft Regulation on the provision and quality of statistics for the macroeconomic imbalances procedure
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| Legal base | Article 338 TFEU; consultation; QMV
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| Document originated | 7 June 2013
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| Deposited in Parliament | 21 June 2013
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| Department | Office for National Statistics
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| Basis of consideration | EM of 5 July 2013
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| Previous Committee Report | None
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| Discussion in Council | Not known
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background
10.1 The Macroeconomic Imbalances Procedure (MIP) is a mechanism
designed to identify and, if necessary, correct harmful macroeconomic
imbalances across the EU, which were a key cause of the current
sovereign debt crisis. The Regulation on enforcement measures
to correct excessive macroeconomic imbalances in the eurozone,
Regulation (EU) No. 1174/2011, and the Regulation on the prevention
and correction of the macroeconomic imbalances, Regulation (EU)
No. 1176/2011, creating the procedure, form part of the new so-called
"six pack" of legislation for improving EU economic
governance. More broadly, the procedure forms an element of the
annual European Semester, an EU-level framework for coordinating
and assessing Member States' structural reforms and fiscal/budgetary
policy and for monitoring and addressing macroeconomic imbalances.
It attempts to exploit the synergies between these policy areas
by aligning their reporting cycles.
10.2 Detailed rules for the early detection,
prevention and correction of macroeconomic imbalances are set
out in Regulation (EU) No. 1176/2011. Each Member State is assessed
against a "scoreboard" comprised of 11 macroeconomic
indicators that monitor the potential development of problematic
external and internal imbalances. The Commission draws heavily
on the results of the scoreboard in its evaluation of Member States'
economic performance. The information in the scoreboard informs
crucial administrative and policy actions so its indicators need
to be reliable and of high quality.
The document
10.3 The need to have statistics of the highest
quality for inclusion in the MIP scoreboard and to develop a reliable
quality monitoring procedure for this purpose has been stressed
by the ECOFIN Council. In response the Commission proposes this
draft Regulation to introduce a wide range of new procedures
and obligations based on statistical provisions in the current
Excessive Deficit Procedure (EDP) and Gross National Income (GNI)
procedures, including Commission inspections of statistical production
processes in Member States, peer reviews by EU partners, obligations
to produce detailed inventory documentation (descriptions of sources
and methods used), methodological visits, production of extensive
quality reports by Member States and potential sanctions for negligence
or deliberately misrepresenting data.
The Government's view
10.4 The Minister for Civil Society, Cabinet
Office (Mr Nick Hurd) introduces his comments by saying that the
Government places a high degree of importance on high quality,
robust economic statistics, including under the MIP.
10.5 The Minister continues that:
- concerns about the Commission's
proposal are widespread among both National Statistical Institutes
(NSIs) and National Central Banks (NCBs) across Member States;
- this has been expressed at the European Statistical
System Committee (ESSC) and at the Statistics Committee of the
European System of Central Banks (ESCB), as well as at the Committee
on monetary, finance and balance of payments statistics (CMFB),
which facilitates cooperation between the European Statistical
System (ESS) and the ESCB;
- the Government shares the concerns of NSIs and
NCBs that the Commission proposal will be ineffective in achieving
the intended objective and does not meet the principle of proportionality;
- the proposal is to scale up existing intensive
quality assurance procedures, which serve for the small number
of specific EDP and GNI statistics, to cover the larger part of
all economic statistics;
- this cannot practicably be achieved — extensive
application of wide-ranging and burdensome quality procedures
risks failures of quality control in areas where the impact on
policy outcomes may be greatest;
- moreover, the Government's view is that intense
quality assurance procedures must be focussed on priority areas
of concern to ensure value-for-money;
- a more effective approach would be based on a
systematic assessment of existing and proven quality assurance
processes — that would allow a clear view to be taken as
to where strengthening is required to meet the Council's requirement
for thorough quality assurance;
- this can be achieved effectively and quickly
— NSIs and NCBs have already started this work under the
guidance of the CMFB; and
- once a clear mapping of the requirements to assure
the quality of the MIP statistics is available, a targeted and
effective legal basis to embody these requirements should then
be designed.
10.6 The Minister adds that:
- not only does it risk being
ineffective, the Commission's proposal risks duplicating existing
procedures with regard to the criteria for the data to be reported;
- the draft Regulation would therefore generate
burdens not justifiable to achieve the objective;
- the potential burdens placed on the producers
of the relevant statistics in the UK would be disproportionate;
- furthermore, the proposal is open-ended in its
application to potentially all economic statistics, as the indicators
required by Regulation (EU) No. 1176/2011 are effectively open
to limitless change;
- the potential burden on UK government departments
that supply the relevant statistics is therefore open-ended and
as such is unacceptable;
- the Government will press the Commission to consider
all reasonable alternatives and either re-draft the proposal substantially
or remove the draft Regulation altogether; and
- the Commission should also be pressed to provide
an impact assessment, which is currently lacking.
10.7 The Minister also tells us that the Government
strongly opposes the sanctions provisions in the draft Regulation.
He says that the Government supports a Council Legal Opinion,
issued in response to a similar proposal, which reads as follows:
"Article 338 TFEU ... does not contemplate any
sanctions (including fines) against Member States and does not
empower the legislator to create a procedure for imposing fines
on Member States which would derogate from the procedure laid
down by Articles 258 to 260 TFEU. Any system of sanctions similar
to those foreseen by the European Parliament ... would as a consequence
require an amendment to the Treaties."
10.8 The Minister notes that the Government's
legal advisers agree with this opinion.
10.9 Finally the Minister tells us that the additional
costs to the Government which would be attributable to the draft
Regulation are inherently difficult to calculate due to the open-ended
nature of the proposal, but there are potential financial costs
of multiple millions of pounds sterling.
Conclusion
10.10 Clearly this proposal is unacceptable.
So we endorse the Government's intention to secure either a substantial
re-draft of the proposed Regulation or its removal altogether
and we look forward to learning of progress on this in due course.
Meanwhile the document remains under scrutiny.
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