EUROSTAT
Directorate C: National Accounts; prices and key indicators
Unit C-3: Statistics for administrative purposes
Eurostat/C3/GNIC/289– EN
Orig: EN
30th Meeting of the GNI Committee
22-23 April2015
Luxembourg, BECH
Room Quetelet
State of play on reservations on GNI
Point V-3 on the agenda
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State of play on reservations on GNI
1. This document summarises all the reservations that are currently in place concerning GNI data. In addition to informing the GNI Committee on the state of play, it also serves as a reporting tool to inform other stakeholders on the number of reservations per Member State, showing the years that are covered by them and the possible adjustments resulting from their lifting. In practice, the latter will only be able to be estimated reliably on very rare occasions, but when it is, this will be done in the “follow-up” column.
General reservations
2. Annex 1 shows the two general reservations currently in force. These reservations concern the accuracy of Greek NA data for the years 2008 and 2009, which had not been “finalised” by using the sources and methods that are normally used for the final estimates before the “freezing” deadline. On 5 August 2014 Greece has presented the finalised GNI Questionnaire data for 2008 and 2009, Eurostat has assessed this, including a direct verification visit, and will prepare technical opinions to lift these two general reservations.
Process specific reservations for 2010
3. The GNI Committee agreed on the transmission in the 2014 GNI Questionnaires and Quality Reports of data for years 2002-2009 in ESA 95 and on the transmission of data for years 2010 onwards in ESA 2010 with transition to ESA95 GNI. In these circumstances, the verification of GNI, from year 2010 onwards, according to ESA 95, requires a preceding check on the data established according to ESA 2010. This check is to be based on the inventories of statistical sources and methods used by the Member States to compile their ESA 2010 GNI estimates. The ESA 2010 GNI Inventories will become available only late in 2015/beginning 2016. The Commission therefore placed a process-specific reservation reserving its position as to the accuracy of all of the EU-27 Member States’ national accounts relating to the year 2010 in order to ensure that the GNI-based own resource contribution from the respective EU-27 Member State is determined correctly. For 2011 a process-specific reservation will be placed before end September 2015.
GNP reservations 1995-2001
4. Annex 2 shows the last GNP reservation currently in force. The reservation (7) for Greece, relating to the transition between GDP (ESA95) and GNP (ESA79), is still in place. At the GNI follow-up mission to Greece in June 2013, ELSTAT presented further information on the remaining open points on consumption of fixed capital and FISIM. The relevant data on the transition item FISIM were included in the 2013 GNI Questionnaire, and additional information on consumption of fixed capital has been presented on 30 April 2014. Eurostat has assessed this additional information and will prepare a technical opinion to lift this GNP reservation for Greece.
GNI reservations 2002-2010
5. The verification of the sources and methods to calculate GNI is primarily based on GNI Inventories[1], as well as on GNI information visits to the countries by the Commission and subsequent information provided by the countries.
6. In January 2012, the Commission notified the EU-25 Member States that it reserved its position as to the accuracy of GNI on country specific issues and on transversal issues, which are specific issues that are the same for all Member States. In January 2013, the Commission notified Bulgaria and Romania that it reserved its position as to the accuracy of GNI on country specific issues and on transversal issues, which are specific issues that are the same for all Member States. Detailed information can be found in Annex 3. In September 2013, two more country specific reservations were placed, one for Austria and one for United Kingdom. The reservation for Austria was following the Excessive Deficit Procedure (EDP) dialog visit for Austria. The reservation for the United Kingdom was following a recent audit carried out by the European Court of Auditors. Details can be found in Annex 3. In August and September 2013, the Commission notified EU-27 Member States that it reserved its position on two additional transversal issues. More information can be found in Annex 4.
7. Explanations of the Commission’s concerns on reservations were provided with the notification letters. The countries were asked to transmit to the Commission by 22 September 2014, except for the new specific reservation for the United Kingdom, which has 22 September 2016 as deadline, the changes to GNI estimates required as a result of the country specific points notified, or any additional methodological information showing clearly that the points are no longer relevant.
8. Annex 3 provides an overview on the country specific GNI reservations and the years of their application and on the progress made until now. In 2012, 2013, 2014 and 2015, the Member States have notified to Eurostat revision impacts due to their work on their specific reservations or have provided additional information on these issues or have contacted Eurostat for further clarification (for more detail, see document GNIC/279/A, in particular Part A.1 and the Quality Reports in Part A.3). The revision impacts and information provided is being assessed and some of the country specific GNI reservations have therefore now been lifted and the others are currently being assessed. In some cases the reservations have been only partly addressed by the Member States. Annex 3 provides the details.
9. Eight transversal reservations relate to: I. The treatment of cross-border property income, II. The calculation and allocation of financial intermediation services indirectly measured (FISIM), III. The treatment of entities with little or no physical presence, IV. The treatment of car scrap schemes, V. The treatment of cooperative dwellings, VI. The inclusion of illegal activities in national accounts, VII. The recording of the vehicle registration tax and VIII. The calculation of IC for actual and imputed rentals in the estimation of the production of housing services. They cover the years 2002-2010, except for the reservation on FISIM which covers the year 2010 only and the reservation on the recording of the vehicle registration tax and the reservation on the calculation of IC for actual and imputed rentals which cover the years 2009 and 2010 only.
10. The transversal issues call for a detailed comparative analysis of the solutions adopted by Member States. Recommendations for the treatment of car scrap schemes (GNIC/232) and the treatment of cooperative dwellings (GNIC/231) were agreed on by the GNIC in its meeting in July 2012, as were recommendations for the illegal prostitution and the production and trafficking of drugs (GNIC/230). Smuggling was dealt with by the GNIC in October 2012 (GNIC/240). FISIM (GNIC/244) and treatment of entities with little or no physical presence (GNIC/243) was also discussed in the same meeting.
11. After analysis and exchange with the Member States, some of the transversal GNI reservations have been lifted for individual Member States prior to the submission of the 2014 GNI Questionnaires and Quality reports. The Member States addressed many of their outstanding transversal reservations with the 2014 submission; they are currently being assessed. Annex 4 provides more information on the progress made until now.
12. Regarding the issue of the treatment of cross-border property income, the Member States has submitted the questionnaires and replies to the follow up questions and the results are currently being assessed by Eurostat. Regarding the reservations on the calculation and allocation of financial intermediation services indirectly measured (FISIM); the treatment of entities with little or no physical presence; the treatment of car scrap schemes; the treatment of cooperative dwellings and the recording of the vehicle registration tax, the cross country analyses have been finalised and these reservations have been lifted for many countries and others are currently being assessed. Regarding the issue of the inclusion of illegal activities in National Accounts, as of the 22nd September 2014 all Member States now include estimates for these activities and the cross-country analysis is progressing. More information can be found in annex 4.
13. If Eurostat considers that a reservation has been adequately addressed, it will send a technical opinion to DG Budget, which may notify to the Permanent Representative of the concerned Member State that the reservation is lifted. Finally, Eurostat sends a copy of the official letter to the National Statistical Institute of the Member State concerned.
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Annex 1:
State of Play on General Reservations, status 31/03/15
Country / Reservations / Years of application / Revisions introduced in GNP/GNI questionnaire and/or additional information provided with Quality Report / Reservation lifted / Follow-upGreece / (1) General reservation on GNI data, introduced September 2012 / 2008 / 2014 / Technical opinion on lifting of reservations 1-2 is being prepared
(2) General reservation on GNI data, introduced September 2013 / 2009 / 2014
Annex 2:
State of Play on GNP Reservations of Greece 1995-2001, status 31/0315
Country / Reservations / Years of application / Revisions introduced in GNP/GNI questionnaire and/or additional information provided with Quality Report / Reservation lifted / Follow-upGreece / (1) Estimates for the small business strata in the manufacturing branches need to be based on new data sources / 1995-2001 / 2006-2008 / 06/07/2009
(2) Estimates for the construction industry need to be re-benchmarked and should take into account direct data sources for the construction industry / 1995-2001 / 2006-2008 / 06/07/2009
(3) Estimates for wholesale and retail trade, hotel and restaurants, and other land passenger transport (tourist buses) and travel agencies need to be re-benchmarked using recent data sources / 1995-2001 / 2006-2008 / 06/07/2009
(4) Estimates for dwelling services need to be re-benchmarked on the basis of the recent housing census and household budget survey / 2000-2001 / 2006-2008 / 06/07/2009
(5) Estimates for activities especially within NACE K, M, N and O need to be cross-checked and if necessary revised with the use of recent and more direct data sources / 1995-2001 / 2006-2008 / 06/07/2009
(6)The present estimates for final consumption expenditure of non-profit institutions serving households need to be reviewed and revised when necessary / 1995-2001 / 2006-2008 / 06/07/2009
(7)The calculation of the transition between GDP (ESA95) and GNP (ESA79) needs to be reviewed / 1995-2001 / 2005 (partially)/ 2006-2008, 2013, 2014 / Technical opinion on lifting of reservation 7 is being prepared
Annex 3:
State of Play on GNI Reservations, status 31/03/15
Country / Reservations / Years of application / Revisions introduced in GNI questionnaire and/or additional information provided with Quality Report / Reservations lifted / Follow-up /Belgium / (1) The balancing of the supply and use table for construction needs to be updated with new estimates of the hidden economy in order to improve the quality of the estimates for construction. / 2002-2010 / 2014 / 1-3 is currently being assessed.
(2) In activities other than construction, the coefficients used to determine the adjustments for exhaustiveness need to be re-examined and updated if necessary. / 2002-2010 / 2014
(3) The revision of foreign trade statistics and their use in national accounts need to be further analysed, especially the treatment of the activities of fiscal representatives. / 2002-2010 / Previously provided by email
Bulgaria / (1) A review of the methods to ensure exhaustiveness has to be carried out with a
view to validating and complementing the applied exhaustiveness adjustments.
(2) A review of the methods used to calculate output and intermediate consumption
in dwelling services has to be carried out. Improvements to the "stratification
method" used in the calculation of output need to be made, especially with regard
to the price element of the stratification model. The estimates of intermediate
consumption should be revised whereas the minor repairs by owner occupiers of a
kind typically carried out by tenants should be separately identified and recorded
as Household Final Consumption Expenditure.
(3) Improvements need to be made in the estimation of consumption of fixed capital
by means of the Perpetual Inventory Method (PIM). In particular the PIM model
should also cover Non-Profit Institutions Serving Households and include
intangible fixed assets. The treatment of roads in PIM should be aligned to the
recommendations of the GNP Committee on the consumption of fixed capital on
roads, bridges etc.
(4) The estimates of own account Gross Fixed Capital Formation (GFCF) need to be
reviewed due to possible application of an incorrect formula used in the
calculation of a mark-up for net operating surplus. Own-account production of
software by financial corporations needs to be estimated.
(5) The coverage of entertainment, literary and artistic originals in the calculation of
output and GFCF should be extended to include estimations for books, musical
works and artistic originals.
(6) An alternative method for estimating output and intermediate consumption in
construction services should be developed to allow for regular cross-checks with
the main method based on the annual statistical reports of construction
enterprises. Improvements need to be made in the estimation of own-account
construction.
(7) Improvements need to be made in the estimation of compensation of employees
to and from the rest of the world.
(8) Further clarifications are required in order to assess if there is a need for
additional specific improvements of the calculations for the following
components:
- output, its allocation to users and intermediate consumption in financial
intermediation (excluding FISIM);
- components of the expenditure approach to Gross Domestic Product;
- taxes and subsidies (and borderline cases). / 2007-2010
2007-2010
2007-2010
2007-2010
2007-2010
2007-2010
2007-2010
2007-2010
/ 2014
2014
2014
2014
2014
2014
2014
2014 / Technical
opinion on lifting of reservation 5 is being prepared
1-4, 6-8 is currently being assessed. 1, 3 and 8 are only partly addressed.
Czech Republic / (1) The sources and methods used for the calculation of dwelling services need to be reviewed in order to assess the related national accounts estimates. / 2004-2010 / 2011, 2014 / 1 is currently being assessed.