title: 2013/112/EU: Commission Recommendation of 20 February 2013 Investing in children: breaking the cycle of disadvantage

text:
               2.3.2013

               EN

               Official Journal of the European Union

               L 59/5

         COMMISSION RECOMMENDATION
   of 20 February 2013
   Investing in children: breaking the cycle of disadvantage
   (2013/112/EU)
   THE EUROPEAN COMMISSION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Article 292 thereof,
   Whereas:

               (1)

               Respect for human dignity is a founding value of the European Union, whose aims include promoting the well-being of its people; the Union must protect the rights of the child, combat social exclusion and discrimination, promote social justice and protection;

               (2)

               Children (1) are more at risk of poverty or social exclusion than the overall population in a large majority of EU countries; children growing up in poverty or social exclusion are less likely than their better-off peers to do well in school, enjoy good health and realise their full potential later in life;

               (3)

               Preventing the transmission of disadvantage across generations is a crucial investment in Europe’s future, as well as a direct contribution to the Europe 2020 Strategy for smart, sustainable and inclusive growth, with long-term benefits for children, the economy and society as a whole;

               (4)

               Early intervention and prevention are essential for developing more effective and efficient policies, as public expenditure addressing the consequences of child poverty and social exclusion tends to be greater than that needed for intervening at an early age;

               (5)

               Tackling disadvantage in early years is an important means of stepping up efforts to address poverty and social exclusion in general. Prevention is most effectively achieved through integrated strategies that combine support to parents to access the labour market with adequate income support and access to services that are essential to children’s outcomes, such as quality (pre-school) education, health, housing and social services, as well as opportunities to participate and use their rights, which help children live up to their full potential and contribute to their resilience;

               (6)

               The most successful strategies in addressing child poverty have proved to be those underpinned by policies improving the well-being of all children, whilst giving careful consideration to children in particularly vulnerable situations;

               (7)

               The promotion of gender equality, gender mainstreaming and equal opportunities, as well as the fight against discrimination faced by children and their families on all grounds (particularly those related to sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation) should underpin any efforts to address child poverty and social exclusion;

               (8)

               The current financial and economic crisis is having a serious impact on children and families, with a rise in the proportion of those living in poverty and social exclusion in a number of countries;

               (9)

               Budget consolidation efforts due to growing fiscal constraints in a number of countries present significant challenges to ensure that social policies remain adequate and effective in the short as well as the long run;

               (10)

               More than a decade of cooperation at EU level has led to a common understanding of the determinants of child poverty through substantial work on developing appropriate monitoring indicators, identifying common challenges and successful policy approaches, which has given political momentum to the issue; subsequently, the Commission has announced the adoption of a Recommendation on Child Poverty in the Communication on ‘the European Platform against Poverty and Social Exclusion’ (2);

               (11)

               The Europe 2020 Strategy has given new impetus to efforts to address poverty and social exclusion in the EU, by setting a common European target to reduce the number of people at risk of poverty and social exclusion by at least 20 million by 2020, as well as stepping up efforts to address early school leaving. Tackling and preventing child poverty are an essential part of the EU and Member States’ efforts in this respect, and form part of the European Platform against Poverty and Social Exclusion;

               (12)

               The current governance under the European Semester serves to ensure implementation of the relevant Country-Specific Recommendations to combat child poverty and improve children’s well-being;

               (13)

               All EU Member States have ratified the United Nations Convention on the Rights of the Child (UNCRC). The standards and principles of the UNCRC must continue to guide EU policies and actions that have an impact on the rights of the child;

               (14)

               By way of the June 2012 Social Protection Committee advisory report (3) and key messages, as well as the October 2012 EPSCO Council Conclusions ‘Preventing and tackling child poverty and social exclusion and promoting children’s well-being’ (4), Member States reaffirmed their commitment and welcomed the Commission’s initiative to adopt a Recommendation on the issue;

               (15)

               Various EU policies have addressed issues linked to child poverty and the inter-generational transmission of disadvantage, in particular in the fields of education and training, health, children’s rights and gender equality (5);

               (16)

               While policies addressing child poverty are primarily the competence of Member States, a common European framework can strengthen synergies across relevant policy areas, help Member States review their policies and learn from each other’s experiences in improving policy efficiency and effectiveness through innovative approaches, whilst taking into account the different situations and needs at local, regional and national level;

               (17)

               In the context of the upcoming Multiannual Financial Framework, such guidance can also provide a basis for further cooperation and a focus for using relevant financial instruments, particularly the Structural Funds, to deliver on the proposed objective of ‘Promoting social inclusion and combating poverty’.

         RECOMMENDS THAT MEMBER STATES: Organise and implement policies to address child poverty and social exclusion, promoting children’s well-being, through multi-dimensional strategies, in accordance with the following guidelines:
   1.   BE GUIDED BY THE FOLLOWING HORIZONTAL PRINCIPLES

               —

               Tackle child poverty and social exclusion through integrated strategies that go beyond ensuring children’s material security and promote equal opportunities so that all children can realise their full potential;

               —

               Address child poverty and social exclusion from a children’s rights approach, in particular by referring to the relevant provisions of the Treaty on the European Union, the Charter of Fundamental Rights of the European Union and the UN Convention on the Rights of the Child, making sure that these rights are respected, protected and fulfilled;

               —

               Always take the child’s best interests as a primary consideration and recognise children as independent rights-holders, whilst fully acknowledging the importance of supporting families as primary carers;

               —

               Maintain an appropriate balance between universal policies, aimed at promoting the well-being of all children, and targeted approaches, aimed at supporting the most disadvantaged;

               —

               Ensure a focus on children who face an increased risk due to multiple disadvantage such as Roma children, some migrant or ethnic minority children, children with special needs or disabilities, children in alternative care and street children, children of imprisoned parents, as well as children within households at particular risk of poverty, such as single parent or large families;

               —

               Sustain investment in children and families, allowing for policy continuity and long-term planning; assess how policy reforms affect the most disadvantaged and take steps to mitigate any adverse effects.

         2.   DEVELOP INTEGRATED STRATEGIES, BASED ON THREE KEY PILLARS

   2.1.   Access to adequate resources

      Support parents’ participation in the labour market — Acknowledge the strong link between parents’ participation in the labour market and children’s living conditions, and in accordance with the principles outlined in the Commission Recommendation on Active Inclusion (6) and the Barcelona targets (7), take all possible measures to support parents’ participation in the labour market, in particular for those at a distance from the labour market and in households at particular risk:

               —

               Make sure that work ‘pays’ by identifying and tackling the specific disincentives parents face when entering, remaining or progressing in the labour market, including those related to the design and interaction of tax and benefits systems;

               —

               Support the employability and participation of single parents and second earners in paid work, promoting gender equality in the labour market and in family responsibilities;

               —

               Provide enhanced support to parents’ reintegration into the labour market following parental leave through training measures and job search support, focusing specifically on those at particular risk;

               —

               Intensify efforts to ensure that all families, including those in vulnerable situations and living in disadvantaged areas, have effective access to affordable, quality early childhood education and care;

               —

               Adapt the design and eligibility criteria of childcare services to increasingly diverse working patterns, thereby helping parents maintain their work commitments or find a job, whilst keeping a strong focus on the child’s best interests;

               —

               Promote quality, inclusive employment and a working environment that enables parents to balance their work and parenting roles on an equal footing, including through parental leave, workplace support and flexible working arrangements.

      Provide for adequate living standards through a combination of benefits — Make it possible for children to enjoy adequate living standards that are compatible with a life in dignity, through an optimal combination of cash and in-kind benefits:

               —

               Support family incomes through adequate, coherent and efficient benefits, including fiscal incentives, family and child benefits, housing benefits and minimum income schemes;

               —

               Complement cash income support schemes with in-kind benefits related in particular to nutrition, childcare, education, health, housing, transport and access to sports or socio-cultural activities;

               —

               Ensure that the design of and eligibility to financial support for children reflects the development of living arrangements and provides adequate redistribution across income groups;

               —

               Create more effective access to the benefits to which children or their families are entitled by facilitating easy take up and developing beneficiary outreach services;

               —

               Deliver means-tested or other targeted benefits in a way that avoids stigmatisation, differentiates between children’s needs and reduces the risk of poverty traps whilst avoiding the creation of disincentives to work for second earners and single parents;

               —

               Use discretion when making family benefits conditional on parenting behaviour or children’s school attendance and assess the potential negative impact of such measures;

               —

               Set up regular and responsive delivery mechanisms that provide maximum coverage and benefit children most, such as advance payments.

         2.2.   Access to affordable quality services

      Reduce inequality at a young age by investing in early childhood education and care — Further develop the social inclusion and development potential of early childhood education and care (ECEC), using it as a social investment to address inequality and challenges faced by disadvantaged children through early intervention:

               —

               Provide access to high-quality, inclusive early childhood education and care; ensure its affordability and adapt provision to the needs of families;

               —

               Incentivise the participation of children from a disadvantaged background (especially those below the age of three years), regardless of their parents’ labour market situation, whilst avoiding stigmatisation and segregation;

               —

               Support parents in their role as the main educators of their own children during the early years and encourage ECEC services to work closely with parents and community actors involved in the child’s upbringing (such as health and parenting support services);

               —

               Raise parents’ awareness of the benefits of participation in ECEC programmes for their children and themselves; Use ECEC as an early-warning system to identify family or school-related physical or psychological problems, special needs or abuse.

      Improve education systems’ impact on equal opportunities — Increase the capacity of education systems to break the cycle of disadvantage, ensuring that all children can benefit from inclusive high quality education that promotes their emotional, social, cognitive and physical development:

               —

               Provide for the inclusion of all learners, where necessary by targeting resources and opportunities towards the more disadvantaged, and adequately monitor results;

               —

               Recognise and address spatial disparities in the availability and quality of educational provision and in educational outcomes; foster desegregation policies that strengthen comprehensive schooling;

               —

               Create an inclusive learning environment by strengthening the link between schools and parents, and provide if necessary personalised support to compensate for specific disadvantages, through for instance training for parents of migrant and ethnic minority children;

               —

               Address barriers which stop or seriously hinder children from attending or completing school (such as additional financial fees in compulsory education) by providing targeted educational aid in a supportive learning environment;

               —

               Improve the performance of students with low basic skills by reinforcing the learning of literacy, numeracy and basic maths and science, and ensuring early detection of low achievers;

               —

               Develop and implement comprehensive policies to reduce early school leaving which encompass prevention, intervention and compensation measures; ensure that these policies include measures for those at risk of early school leaving;

               —

               Strengthen equality legislation and guarantee the most marginalised learners the basic right to receive a quality minimum qualification;

               —

               Revise and strengthen the professional profile of all teaching professions and prepare teachers for social diversity; deploy special cultural mediators and role models to facilitate the integration of Roma and children with an immigrant background.

      Improve the responsiveness of health systems to address the needs of disadvantaged children — Ensure that all children can make full use of their universal right to health care, including through disease prevention and health promotion as well as access to quality health services:

               —

               Address the obstacles to accessing healthcare faced by children and families in vulnerable situations, including costs, cultural and linguistic barriers, lack of information; improve the training of health care providers in this respect;

               —

               Invest in prevention particularly during early childhood years, by putting in place comprehensive policies that combine nutrition, health, education and social measures;

               —

               Tackle the social gradient in unhealthy lifestyles and substance abuse by giving all children access to balanced diets and physical activity;

               —

               Devote special attention to children with disabilities or mental health problems, undocumented or non-registered children, pregnant teenagers and children from families with a history of substance abuse.

      Provide children with a safe, adequate housing and living environment — Allow children to live and grow up in a safe, healthy and child-friendly environment that supports their development and learning needs:

               —

               Make it possible for families with children to live in affordable, quality housing (including social housing), address situations of exposure to environmental hazards, overcrowding and energy poverty;

               —

               Support families and children at risk of homelessness by avoiding evictions, unnecessary moves, separation from families as well as providing temporary shelter and long-term housing solutions;

               —

               Pay attention to children’s best interests in local planning; avoid ‘ghettoisation’ and segregation by promoting a social mix in housing as well as adequate access to public transport;

               —

               Reduce children’s harmful exposure to a deteriorating living and social environment to prevent them from falling victim to violence and abuse.

      Enhance family support and the quality of alternative care settings — Strengthen child protection and social services in the field of prevention; help families develop parenting skills in a non-stigmatising way, whilst ensuring that children removed from parental care grow up in an environment that meets their needs:

               —

               Ensure that poverty is never the only justification for removing a child from parental care; aim at enabling children to remain in or return to the care of their parents by, for example, tackling the family’s material deprivation;

               —

               Ensure adequate gate-keeping to prevent children being placed in institutions and provide for regular reviews in the event of such placements;

               —

               Stop the expansion of institutional care settings for children without parental care; promote quality, community-based care and foster care within family settings instead, where children’s voice is given due consideration;

               —

               Ensure that children without parental care have access to quality services (both mainstream and specific services) related to their health, education, employment, social assistance, security and housing situation, including during their transition to adulthood;

               —

               Provide appropriate support to children left behind when one or both parents migrate to another country to work, as well as to their replacement carers.

         2.3.   Children’s right to participate

      Support the participation of all children in play, recreation, sport and cultural activities — Acknowledge the influence children have over their own well-being and their resilience in overcoming adverse situations, in particular by providing opportunities to participate in informal learning activities that take place outside the home and after regular school hours:

               —

               Address barriers such as cost, access and cultural differences to ensure that all children can participate in play, recreation, sport and cultural activities outside school;

               —

               Provide safe spaces in children’s environment and support disadvantaged communities by means of specific incentives;

               —

               Encourage schools, community actors and local authorities to create better after-school activities and facilities for all children, regardless of their parents’ work situation and background;

               —

               Enable all families to participate in social activities that boost their parental skills and foster positive family communication;

               —

               Promote approaches to participation that build on the potential for community volunteering and foster solidarity between generations.

      Put in place mechanisms that promote children’s participation in decision-making that affects their lives — Enable and encourage children to express informed views, ensuring that those views are given due weight and are reflected in the main decisions affecting them:

               —

               Use and further develop existing tools to involve children in the running of services such as care, healthcare and education, as well as to consult them on relevant policy planning through mechanisms adapted to their age;

               —

               Support the involvement of all children in existing participation structures; reach out to and support the participation of children from disadvantaged backgrounds;

               —

               Encourage professionals working with and for children to actively involve them, raising awareness of related rights and obligations;

               —

               Implement the child’s right to be heard in all justice-related decisions and promote child-friendly justice, in particular by giving children effective access to court and judicial proceedings.

         3.   FURTHER DEVELOP NECESSARY GOVERNANCE, IMPLEMENTATION AND MONITORING ARRANGEMENTS

      Strengthen synergies across sectors and improve governance arrangements — Ensure that policies effectively address child poverty and social exclusion through comprehensive design and enhance coordination between key actors:

               —

               Develop regular and systematic links between policy areas of high relevance to the social inclusion of children and strengthen synergies between key players, particularly in the fields of education, employment, health, equality and children’s rights;

               —

               Work towards mainstreaming children’s policies and rights into key policies through, for example, specific institutional arrangements;

               —

               Promote close cooperation and regular dialogue between public authorities at all levels, social partners, local communities and civil society organisations;

               —

               Support and further develop the involvement of children, including in the implementation of the present Recommendation.

      Strengthen the use of evidence-based approaches — Strengthen evidence-based policy development and social policy innovation, making sure to take due account of the potential impact of policies on children:

               —

               Make full use of existing statistics and administrative data to monitor the impact of policies on children and their families; reinforce statistical capacity (including by disaggregating by gender) where needed and feasible, particularly concerning child deprivation, access to quality and affordable childcare, children’s health and the situation of the most vulnerable children;

               —

               Improve the timeliness of data availability to monitor the situation of children, and promote the use of methods and models such as micro-simulation to support a more systematic ex ante assessment of the potential impact of policies on children;

               —

               Strengthen links between the policy and research community and test relevant policy innovations; encourage evidence-based evaluation of programme outcomes, including in the long term through tools such as longitudinal surveys; promote visibility and sharing of results;

               —

               Promote the exchange of good practice and knowledge, the roll-out of tried and tested intervention models, measures to foster solidarity in the wider community and empower local communities to work together;

               —

               Evaluate the impact of temporary policies introduced in response to the economic crisis before deciding to make these policies part of structural reforms.

         4.   MAKE FULL USE OF RELEVANT EU INSTRUMENTS

      Address child poverty and social exclusion as a key issue within the Europe 2020 Strategy — Mobilise the range of tools and indicators available within the Europe 2020 Strategy to give new impetus to joint efforts to address child poverty and social exclusion:

               —

               Firmly place child poverty and social exclusion as key issues in the Europe 2020 Strategy and National Reform Programmes, as part of the overall effort to reduce poverty and social exclusion, taking into account relevant Country Specific Recommendations adopted by the European Council;

               —

               Consider, where appropriate, the added value of setting national targets for reducing child poverty and social exclusion, taking national specificities into account;

               —

               Fully exploit the tools provided by the Europe 2020 Strategy and the Social Open Method of Coordination to improve the monitoring and evaluation of policies addressing child poverty and well-being, making full use of the proposed indicator-based monitoring framework annexed to the present Recommendation;

               —

               Strengthen synergies with relevant EU policies, in particular in the fields of education, health, gender equality and children’s rights.

      Mobilise relevant EU financial instruments — Make appropriate use of the opportunities provided by EU financial instruments to support the policy priorities outlined above:

               —

               Support the development of more evidence-based policies and social innovation through the Programme for Social Change and Innovation, the European Social Fund and Horizon 2020, and use these programmes to test, evaluate and scale up possible policy innovations;

               —

               Make full use of the Fund for European Aid to the Most Deprived (addressing children's food and material deprivation), the European School ‘Fruit and Milk’ Schemes (providing products with positive nutritional value and encouraging good eating habits) and the ‘Erasmus for All’ Programme (promoting children's access to education, informal learning and sport);

               —

               Exploit opportunities provided by the Structural Funds to support children and families when drawing up the European Social Fund and the European Regional Development Fund Operational Programmes 2014-2020, in line with Country Specific Recommendations;

               —

               Make appropriate use of thematic objectives related to promoting employment and supporting labour mobility, promoting social inclusion and combating poverty, investing in education, skills and lifelong learning as well as the relevant investment priorities within them. These include in particular early childhood education; reducing early school leaving; reconciliation between work and private life; access to services, including health care and social services; community-led local development strategies; support to the regeneration of deprived areas and transition from institutional to community-based services;

               —

               To ensure that 2014-2020 Structural Funds interventions are effective, pursue evidence-based strategies to reduce early school leaving, involving relevant stakeholders and measures to support the transition from institutional to community-based care;

               —

               Promote partnership in the programming of and access to Structural Funds by involving relevant stakeholders at national, regional and local levels, in particular the relevant public authorities, social partners and non-governmental organisations, in order to mobilise action to combat child poverty.

      Done at Brussels, 20 February 2013.

            For the Commission

         László ANDOR

            Member of the Commission

      (1)  In line with the UN Convention on the Rights of the Child, children are understood in this context as persons under the age of 18.

      (2)  COM(2010) 758 final.

      (3)  Social Protection Committee, SPC advisory report to the European Commission on tackling and preventing child poverty, promoting child well-being, 27 June 2012.

      (4)  Preventing and tackling child poverty and social exclusion and promoting children’s well-being, EPSCO Council Conclusions, 4 October 2012, 14437/12.

      (5)  See in particular: ‘An updated strategic framework for European cooperation in education and training’, COM(2008) 865 final, ‘Solidarity in Health: reducing health inequalities in the EU’, COM(2009) 567 final, ‘An EU Agenda for the Rights of the Child’, COM(2011) 60 final, ‘Strategy for equality between women and men 2010-2015’, COM(2010) 491 final.

      (6)  Commission Recommendation on the active inclusion of people excluded from the labour market 2008/867/EC of 3 October 2008.

      (7)  Presidency conclusions, Barcelona European Council, 15-16 March 2002, SN 100/1/02 REV 1.

      ANNEX

         Indicator-based monitoring framework

      The proposed monitoring framework highlights indicators that are relevant for monitoring the Recommendation’s implementation. Proposals for further development are highlighted in the annexes to the Social Investment Package.

         Overall objective of combating child poverty and social exclusion and promoting child well-being

                  Europe 2020

                  Definition

                  Breakdowns

                  Source

                  primary/ secondary/context (1)

                  Comments

                     At risk of poverty or social exclusion for children (breakdown of the Europe 2020 poverty and social exclusion headline target)

                  The sum of children who live in a household which is at risk of poverty and/or severely materially deprived and/or a household with very low work intensity (for the definition of these 3 indicators, see below)

                  By age (0-17, 0-5, 6-11, 12-17)

                  Eurostat — EU-SILC

                  primary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                  Indicator

                  Definition

                  Breakdowns

                  Source

                  primary/ secondary/context

                  Comments

                     At-risk-of-poverty rate for children (to be analysed together with the value of the poverty threshold in PPS for a household consisting of 2 adults and 2 children aged below 14)

                  Share of children living in a household with an equivalised disposable income below 60 % of the national median equivalised disposable income

                  By age (0-17, 0-5, 6-11, 12-17) and household type

                  Eurostat — EU-SILC

                  primary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                     Severe material deprivation rate

                  Proportion of children who live in a household whose living conditions are severely constrained by a lack of resources, i.e. it experience at least 4 out of 9 of the following deprivation items: cannot afford (i) to pay rent or utility bills, (ii) to keep the home adequately warm, (iii) to pay unexpected expenses, (iv) to eat meat, fish or a protein equivalent every second day, (v) a week’s holiday away from home, (vi) a car, (vii) a washing machine, (viii) a colour TV, or (ix) a telephone.

                  By age (0-17, 0-5, 6-11, 12-17)

                  Eurostat — EU-SILC

                  primary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                     Share of children living in very low work intensity households

                  Share of children living in a household where working-age adults (18-59) have worked less than 20 % of their total work potential during the past year (i.e. during the income reference period)

                  By age (0-17, 0-5, 6-11, 12-17)

                  Eurostat — EU-SILC

                  primary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                     Child deprivation indicator

                  Under discussion

                  Eurostat -EU-SILC

                  n.a.

                  Under development

                     Dispersion of child poverty risk around the poverty risk threshold: At-risk-of-poverty rate calculated with 50 % and 70 % thresholds

                  Share of children living in a household with an equivalised disposable income below 50 % and below 70 % of the national equivalised median income

                  By age (0-17, 0-5, 6-11, 12-17)

                  Eurostat — EU-SILC

                  secondary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                     Persistent at-risk-of- poverty rate for children

                  Share of children living in a household with an equivalised disposable income below the poverty threshold in the current year and in at least two of the preceding 3 years

                  0-17

                  Eurostat — EU-SILC (longitudinal)

                  secondary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                     At-risk-of-poverty rate anchored at a fixed moment in time for children

                  Share of children living in households with an equivalised disposable income below 60 % of the national median equivalised disposable income, where the threshold is anchored at a fixed moment in time

                  0-17

                  Eurostat — EU-SILC

                  context

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

         Access to adequate resources

                  Indicator

                  Definition

                  Breakdowns

                  Source

                  primary/ secondary/context

                  Comments

                     In-work poverty rate of people living in households with dependent children

                  Share of individuals (with dependent children) who are defined as in work and have an income below the poverty threshold (60 % of the national median equivalised disposable income)

                  By age (0-17, 18-64, 0-64); by household type (single parents, two adults with dependent children)

                  Eurostat — EU-SILC

                  primary

                     At-risk-of-poverty rate for children by work intensity of the household

                  Share of children living in households with an equivalised disposable income below 60 % of the national median equivalised disposable income according to the work intensity of the household

                  0-17, work intensity of the household (very high [0,85 – 1], high [0,55 – 0,85], medium [0,45 – 0,55], low [0,2 – 0,45])

                  Eurostat — EU-SILC

                  primary

                     At-risk-of-poverty rate for children in households at work

                  Share of children living in households with an income below the poverty threshold (60 % of the national median equivalised disposable income) and with a work intensity above 0,2

                  By household type

                  Eurostat — EU-SILC

                  primary

                     Relative median poverty gap for children

                  Difference between the median equivalised income of persons below the at-risk-of poverty threshold and the at-risk-of poverty threshold, expressed as a percentage of the at-risk-of poverty threshold

                  0-17

                  Eurostat — EU-SILC

                  primary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                     Child care

                  Children cared for (by formal arrangements (2) other than the family) as a proportion of all children in the same age group

                  Less than 3 years, between 3 years and mandatory school age; less than 30h, 30h or more a week

                  Eurostat — EU-SILC

                  secondary

                  Relevance of breakdown by income quintile to be assessed

                     Employment impact of parenthood

                  Difference in percentage points (pp) between

                              —

                              employment rate of people aged 20-49 living in households in which there are no children aged 0-6 and

                              —

                              employment rate of people aged 20-49 living in households in which there is at least one child aged 0-6

                  Total, by gender

                  Eurostat — LFS

                  context

                  Looking at children aged 0-3 and 3-6 separately is recommended

                     Part-time employment due to care responsibilities

                  Persons employed part-time because of looking after children or incapacitated adults, as a percentage of total employed persons

                  Total, by gender

                  Eurostat — LFS

                  context

                     Impact of social transfers (other than pensions) in reducing child poverty

                  Difference between the children at-risk-of poverty rate before and after social transfers (excluding pensions)

                  Eurostat — EU-SILC

                  secondary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

                     Housing cost overburden

                  Percentage of the population living in a household where total housing costs (net of housing allowances) represent more than 40 % of the total disposable household income (net of housing allowances)

                  By age (0-17, 0-5, 6-11, 12-17), poverty status (above or below the at-risk-of-poverty threshold)

                  Eurostat — EU-SILC

                  secondary

                  Comparison with the working-age population (18-64) and the elderly population (65+) is recommended

         Access to quality services

                  Indicator

                  Definition

                  Breakdowns

                  Source

                  primary/ secondary

                  Comments

                     Early school education

                  Share of children between age 4 and the start of compulsory education who participate in early childhood education

                  By gender

                  UOE (3)

                  primary

                     Proficiency in reading, maths and science

                  Share of 15-year olds who score 1 or below (on a scale from 1 (lowest) to 5 (highest)) in PISA tests

                  By parental background (educational attainment, country of birth)

                  OECD- PISA (4)

                  primary

                  No data for CY and MT are available in current data collections.

                     Young people not in employment, education or training (NEET) rate

                  Young people not in employment, education or training (NEET) rate

                  By gender, 15-19

                  Eurostat — LFS

                  primary

                     Early leavers from education and training

                  Population aged 18-24 years with lower secondary education at most and not in further education or training

                  By gender, highest educational level completed

                  Eurostat — LFS

                  secondary

                     Self-declared unmet need for medical care

                  Proportion of people aged 16-25 reporting not having accessed medical services due to cost, distance or waiting lists

                  Eurostat — EU-SILC

                     Infant mortality

                  Ratio of the number of deaths of children under one year of age during the year to the number of live births in that year (expressed per 1 000 live births)

                  By SES of parents (under development)

                  Eurostat

                  primary

                     Child mortality 1-14 years

                  Death rate per 100 000 population

                  Eurostat

                     Low birth weight

                  Weight at birth of less than 2 500 grams (5.5 pounds)

                  WHO-OECD

                  primary

                     Vaccination coverage

                  % of infants who, on reaching their 1st birthday in the given calendar year, have been fully vaccinated against pertussis (whooping cough), diphtheria, tetanus (DPT) and poliomyelitis. And % of infants who, on reaching their 2nd birthday in the given calendar year, have been fully vaccinated against measles, mumps and rubella (MMR)

                  WHO

                  context

                     Obesity

                  Young people aged 15-24 with a body mass index of 30 or above

                  By gender and SES of parents

                  Eurostat — EHIS (5)

                  context

                     Regular smokers

                  Share of daily cigarette smokers in the population aged 15-24

                  By gender and SES of parents

                  Eurostat — EHIS

                  context

                     Mental health

                  Young people (15-24) with depressive syndrome

                  By gender

                  Eurostat — EHIS

                  context

                  Under development

                     Causes of death of young people — suicide

                  Deaths caused by suicide per 100 000 inhabitants aged 15-24

                  By gender

                  Eurostat — Causes of death statistics

                  context

                     Housing deprivation

                  Percentage of the population deprived of each housing deprivation item. The items considered are:
                  (1) leaking roof, damp walls/floors/foundation, or rot in window frames or floor; (2) lack of bath or shower in the dwelling (3) lack of indoor flushing toilet for sole use of the household; (4) problems with the dwelling: too dark, not enough light

                  By age (0-17, 0-5, 6-11, 12-17), at-risk-of-poverty status (i.e. above or below the threshold)

                  Eurostat — EU-SILC

                  primary

                     Overcrowding

                  Percentage of the population living in an overcrowded household. A person is considered to be living in an overcrowded household if the household does not have at its disposal a minimum number of rooms equal to:

                              —

                              one room for the household;

                              —

                              one room for each couple;

                              —

                              one room for each single person aged 18+;

                              —

                              one room for two single people of the same sex between 12 and 17 years of age;

                              —

                              one room for each single person of different sex between 12 and 17 years of age;

                              —

                              one room for two people under 12 years of age.

                  By age (0-17, 0-5, 6-11, 12-17), at-risk-of-poverty status (above or below the threshold)

                  Eurostat -EU -SILC

                  primary

         (1)  Primary indicators are lead indicators which cover the broad fields that have been considered the most important outcome elements whereas secondary indicators support the lead indicators by describing in greater detail the nature of the problem or by describing other dimensions of the problem. Context indicators provide additional detail and contextual information: the list proposed is indicative and leaves room for other background information considered relevant to better frame and understand the national context..

         (2)  Formal arrangements are defined as the following services: pre-school or equivalent, compulsory education, centre-based services outside school hours, a collective crèche or another day-care centre, including family day-care and professional certified childminders. The care provided by family members, neighbours or non-certified childminders is therefore not included under this definition of ‘formal arrangements’.

         (3)  UNESCO/OECD/EUROSTAT database on education statistics.

         (4)  http://www.oecd.org/statisticsdata/03381,en_2649_35845621_1_119656_1_1_1.00.html.

         (5)  EHIS is the ‘European Health Interview Survey’.


Avis juridique important

|

31978K0962

Commission Recommendation No 962/78/ECSC of 12 May 1978 to the Governments of the Member States of the Community amending the list of products annexed to Recommendations 77/330/ECSC and 77/518/ECSC, as last amended by Recommendation 77/808/ECSC, establishing Community surveillance in respect of the import into the Community from third countries of certain iron and steel products covered by the Treaty establishing the European Coal and Steel Community

Official Journal L 126 , 13/05/1978 P. 0005 - 0005

****( 1 ) OJ NO L 114 , 5 . 5 . 1977 , P . 15 .  ( 2 ) OJ NO L 209 , 17 . 8 . 1977 , P . 18 .  ( 3 ) OJ NO L 352 , 31 . 12 . 1977 , P . 15 .    COMMISSION RECOMMENDATION NO 962/78/ECSC   OF 12 MAY 1978   TO THE GOVERNMENTS OF THE MEMBER STATES OF THE COMMUNITY AMENDING THE LIST OF PRODUCTS ANNEXED TO RECOMMENDATIONS 77/330/ECSC AND 77/518/ECSC , AS LAST AMENDED BY RECOMMENDATION 77/808/ECSC , ESTABLISHING COMMUNITY SURVEILLANCE IN RESPECT OF THE IMPORT INTO THE COMMUNITY FROM THIRD COUNTRIES OF CERTAIN IRON AND STEEL PRODUCTS COVERED BY THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY   THE COMMISSION OF THE EUROPEAN   COMMUNITIES ,   HAVING REGARD TO THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY , AND IN PARTICULAR ARTICLE 74 ( 3 ) THEREOF ,   WHEREAS , BY RECOMMENDATION 77/330/ECSC OF 15 APRIL 1977  ( 1 ), AS AMENDED BY RECOMMENDATION 77/518/ECSC OF 28 JULY 1977 ( 2 ), AND AS LAST AMENDED BY RECOMMENDATION 77/808/ECSC OF 23 DECEMBER 1977 ( 3 ), THE COMMISSION ESTABLISHED COMMUNITY SURVEILLANCE IN RESPECT OF THE IMPORT INTO THE COMMUNITY OF CERTAIN IRON AND STEEL PRODUCTS COVERED BY THE ECSC TREATY IN ORDER TO FOLLOW DEVELOPMENTS AND TO ENSURE THAT SUCH IMPORTS OR THE CONDITIONS UNDER WHICH THEY ARE EFFECTED DO NOT SERIOUSLY THREATEN COMMUNITY PRODUCTION ;   WHEREAS THIS SURVEILLANCE DOES NOT EXTEND TO IMPORTS FROM THIRD COUNTRIES OF SEMI-FINISHED PRODUCTS , WHICH INCREASED SUBSTANTIALLY IN QUANTITY DURING THE FIRST FEW MONTHS OF 1978 AND WHICH , THROUGH THEIR PRICE LEVEL , CONTRIBUTED TO THE DETERIORATION IN THE LEVEL OF INTERNAL PRICES ;   WHEREAS THIS CRITICAL TREND IS CONTINUING ; WHEREAS , CONSEQUENTLY , THE COMMUNITY SURVEILLANCE ESTABLISHED BY RECOMMENDATION 77/330/ECSC , AS AMENDED BY RECOMMENDATION 77/518/ECSC , AND AS LAST AMENDED BY RECOMMENDATION 77/808/ECSC , SHOULD BE EXTENDED TO IMPORTS OF SEMI-FINISHED PRODUCTS AND THE LATTER SHOULD THEREFORE BE INCLUDED IN THE LIST OF PRODUCTS ANNEXED TO THE SAID RECOMMENDATION ,   HAS ADOPTED THIS RECOMMENDATION :   ARTICLE 1   THE FOLLOWING PRODUCT SHALL BE ADDED TO THE LIST OF PRODUCTS ANNEXED TO RECOMMENDATION 77/330/ECSC , AS AMENDED BY RECOMMENDATION 77/518/ECSC :    // CCT HEADING NO  //  DESCRIPTION  //  // 73.07 A I //  BLOOMS AND BILLETS ( * ) // 73.07 B I //  SLABS AND SHEET BARS ( * ) // 73.15 A I B ) 2 //  HIGH CARBON STEEL BLOOMS , BILLETS , SLABS AND SHEET BARS ( * ) // 73.15 B I B ) 2 //  ALLOY STEEL BLOOMS , BILLETS , SLABS AND SHEET BARS ( * ) //  ( * ) INCLUSIVE THE SAME PRODUCTS OBTAINED BY CONTINUOUS CASTING .   ARTICLE 2   THIS RECOMMENDATION SHALL BE NOTIFIED TO THE GOVERNMENTS OF THE MEMBER STATES AND PUBLISHED IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES .   IT SHALL ENTER INTO FORCE FOR EACH MEMBER STATE ON THE DATE OF ITS PUBLICATION IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES .   DONE AT BRUSSELS , 12 MAY 1978 .   FOR THE COMMISSION   ETIENNE DAVIGNON   MEMBER OF THE COMMISSION


title: Commission Recommendation of 19 September 2005 on accounting separation and cost accounting systems under the regulatory framework for electronic communications   (Text with EEA relevance)

text:
               11.10.2005

               EN

               Official Journal of the European Union

               L 266/64

      COMMISSION RECOMMENDATION

   of 19 September 2005
   on accounting separation and cost accounting systems under the regulatory framework for electronic communications
   (Text with EEA relevance)
   (2005/698/EC)
   THE COMMISSION OF THE EUROPEAN COMMUNITIES,
   Having regard to Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (1), and in particular to Article 19(1) thereof,
   After consulting the Communications Committee,
   Whereas:

               (1)

               Certain provisions of the regulatory framework for electronic communications networks and services require necessary and appropriate cost accounting mechanisms to be implemented, namely Articles 9, 11, 13 and 6(1) in connection with Annex I, of Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive) (2); Articles 17 and 18(1) of and Annex VII(2) to Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive) (3); and Article 13 of Directive 2002/21/EC.

               (2)

               Operators designated as having significant market power (SMP) on a relevant market (hereinafter referred to as notified operators), as a result of a market analysis carried out in accordance with Article 16 of Directive 2002/21/EC, may be subject, inter alia, to obligations concerning the preparation of separated accounts and/or implementation of a cost accounting system. The purpose of imposing such obligations is to make transactions between operators more transparent and/or to determine the actual cost of services provided. Furthermore, accounting separation and the implementation of cost accounting systems may be used by national regulatory authorities to complement the application of other regulatory measures (e.g. transparency, non discrimination, cost orientation) on notified operators.

               (3)

               This Recommendation updates Commission Recommendation 98/322/EC of 8 April 1998 on interconnection in a liberalised telecommunications market (Part 2 — Accounting separation and cost accounting) (4), following the application of the regulatory framework for electronic communications (25 July 2003). This revision is necessary since the regulatory framework of 2002 brought about some important changes to the regulatory package of 1998 such as the enlarged scope of application of the framework; a different approach to the imposition of ex ante obligations; a different scope of application of the specific provisions concerning cost accounting and accounting separation; and the application of the principle of technology neutrality.

               (4)

               The overall objectives of this Recommendation are to foster the application of consistent accounting principles and methodologies at EU level, taking into account the experience gained by the national regulatory authorities in the domain of cost accounting and accounting separation; improve the transparency of the accounting systems, the methodologies, the data elaborated, the auditing and reporting process to the benefit of all involved parties.

               (5)

               Operators may operate in markets in which they have been designated as having significant market power, as well as in competitive markets where they are not so designated. In order to carry out its regulatory tasks, a national regulatory authority may need information about markets where operators do not have SMP. When an obligation for accounting separation is imposed on a notified operator with SMP on one or more markets, the imposition of accounting separation may cover markets where the operator does not have SMP, e.g. to ensure the coherence of data.

               (6)

               Any mandated cost accounting or accounting separation methodology used in particular as a basis for price control decisions should be specified in a way that encourages efficient investment, identifies potential anti-competitive behaviour, notably margin squeezes, and should be in accordance with the national regulatory authority’s policy objectives as set out in Article 8 of Directive 2002/21/EC.

               (7)

               The implementation of a new or revised costing methodology may indicate that current levels of regulated charges and/or price mechanisms are inappropriate or misaligned in some way. If a national regulatory authority believed corrective action is required then due regard should be taken of the commercial and economic environment to minimise risk and uncertainty in the relevant markets. This action could include, for example, spreading any price adjustment over a reasonable period of time.

               (8)

               When implementing an accounting system that uses a forward-looking approach (such as long run incremental cost) based not on historic costs but on current costs, e.g. where assets are revalued based on the cost of using a modern equivalent infrastructure built with the most efficient technology available, national regulatory authorities may need to adjust the parameters of the cost methodology in order to achieve these objectives. The coordinated use of top-down and bottom-up approaches should be envisaged, where applicable. Accounting systems should be based on the principle of cost causation, such as activity based costing.

               (9)

               When current cost accounting (CCA) is applied to network assets, such as the local loop which is considered to be less replicable in the medium term, consistent application of costing methodologies requires parameters (such as cost of capital, depreciation profiles, mark-ups, time varying components) to be adjusted by the national regulatory authorities accordingly.

               (10)

               When the implementation of a cost accounting system is mandated in accordance with Article 13(4) of Directive 2002/19/EC, rules used for the allocation of costs should be displayed at a level of detail that makes clear the relationship between costs and charges of networks components and services; the basis on which directly and indirectly attributable costs have been allocated between different accounts also needs to be provided.

               (11)

               This Recommendation provides guidance on how to implement cost accounting and accounting separation under the new regulatory framework of 2002. Recommendation 98/322/EC provides guidance on the implementation of cost accounting and accounting separation under the regulatory framework of 1998. The Recommendation of 1998 continues to apply in situations where Member States have not completed the review of existing obligations concerning cost accounting and accounting separation in accordance with Article 16 of Directive 2002/21/EC.

               (12)

               Where a compensation mechanism which involves financial transfers is implemented by Member States, Annex IV, part B to the Universal Service Directive requires that these transfers are undertaken in an objective, transparent, non-discriminatory and proportionate manner. In order to meet these purposes, any compensation received for the provision of universal service obligations should be duly reported in the systems for accounting separation.

               (13)

               As regards the funding of universal service obligations, the Recommendation does not prejudice Commission Directive 80/723/EEC of 25 June 1980 on transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertakings (5).

               (14)

               The application of the principles of this Recommendation is without prejudice to the duty of the Member States and of undertakings to comply fully with the Community competition rules.

               (15)

               Commission Recommendation 2002/590/EC of 16 May 2002 on ‘Statutory Auditor’s Independence in the EU: A Set of Fundamental Principles’ (6), establishes a sound framework against which the auditor’s independence can be tested, where relevant.

               (16)

               The European Regulators Group (ERG) (7) has provided an opinion on the revision of Commission Recommendation on accounting separation and cost accounting of 1998 which includes a detailed annex on aspects of cost accounting and accounting separation,

         HEREBY RECOMMENDS:

               1.

               This Recommendation concerns the implementation of accounting separation and cost accounting systems by operators designated by their national regulatory authority as having significant market power on relevant markets as a result of a market analysis carried out in accordance with Article 16 of Directive 2002/21/EC. Operators with such obligations are hereinafter referred to as ‘notified operators’.
               The purpose of imposing an obligation to implement a cost accounting system is to ensure that fair, objective and transparent criteria are followed by notified operators in allocating their costs to services in situations where they are subject to obligations for price controls or cost-oriented prices.
               The purpose of imposing an obligation regarding accounting separation is to provide a higher level of detail of information than that derived from the statutory financial statements of the notified operator, to reflect as closely as possible the performance of parts of the notified operator’s business as if they had operated as separate businesses, and in the case of vertically integrated undertakings, to prevent discrimination in favour of their own activities and to prevent unfair cross-subsidy.

               2.

               It is recommended that national regulatory authorities require from the notified operators the disaggregation of their operating costs, capital employed and revenues to the level required to be consistent with the principles of proportionality, transparency and regulatory objectives mandated by national or Community law.
               It is recommended that the allocation of costs, capital employed and revenue be undertaken in accordance with the principle of cost causation (such as activity-based costing, ‘ABC’).
               The cost accounting and accounting separation systems of the notified operators need to be capable of reporting regulatory financial information to demonstrate full compliance with regulatory obligations. It is recommended that this capability be measured against the qualitative criteria of relevance, reliability, comparability and materiality.
               It is recommended that national regulatory authorities satisfy themselves as to the adequacy and effectiveness of the cost accounting and accounting separation systems; such systems may be subject to public consultation.

               3.

               It is recommended that a national regulatory authority, when assessing the features and specification of the cost accounting system, reviews the capability of the notified operator’s cost accounting system to analyse and present cost data in a way that supports regulatory objectives. In particular, the cost accounting system of the notified operator should be capable of differentiating between direct costs (8), and indirect costs (9).
               It is recommended that national regulatory authorities, having adopted a decision on a cost accounting system based on current costs set clear deadlines and a base year for their notified operators’ implementation of new cost accounting systems based on current costs.
               Evaluation of network assets at forward-looking or current value of an efficient operator, that is, estimating the costs faced by equivalent operators if the market were vigorously competitive, is a key element of the ‘current cost accounting’ (CCA) methodology. This requires that the depreciation charges included in the operating costs be calculated on the basis of current valuations of modern equivalent assets. Consequently, reporting on the capital employed also needs to be on a current cost basis. Other cost adjustments may be required to reflect the current purchase cost of an asset and its operating cost base. Evaluation of network assets at forward-looking or current value may be complemented by the use of a cost accounting methodology such as long run incremental costs (LRIC), where appropriate.
               It is recommended that national regulatory authorities have due regard to price and competition issues that might be raised when implementing CCA, such as in the case of local loop unbundling.
               It is recommended that national regulatory authorities take due regard to further adjustments to financial information in respect of efficiency factors, particularly when using cost data to inform pricing decisions since the use of cost accounting systems (even applying CCA) may not fully reflect efficiently incurred or relevant costs (10). Efficiency factors may consist of evaluations of different network topology and architecture, of depreciation techniques, of technology used or planned for use in the network.

               4.

               It is recommended that notified operators required to report accounting separation provide a profit and loss statement and statement of capital employed for each of the regulatory reporting entities (based on the relevant markets and services). Transfer charges or purchases between markets and services need to be clearly identified in sufficient detail to justify compliance with non discrimination obligations. These accounting separation reporting obligations may require the preparation and disclosure of information for markets where an operator does not have SMP.
               For consistency and data integrity, it is recommended that the financial reports of the regulatory accounts be consolidated into a profit and loss statement and a statement of capital employed for the undertaking as a whole. A reconciliation of the separate regulatory accounts to the statutory accounts of the operator is also required. These statements should be subject to an independent audit opinion or a national regulatory authority compliance audit (subject to the availability of suitably qualified staff).

               5.

               It is recommended that national regulatory authorities make relevant accounting information from notified operators available to interested parties at a sufficient level of detail. The detail of information provided should serve to ensure that there has been no undue discrimination between the provision of services internally and those provided externally and allow identification of the average cost of services and the method by which costs have been calculated. In providing information for these purposes, national regulatory authorities should have due regard for commercial confidentiality.
               In this respect, the publication by the notified operator of sufficiently detailed cost statements showing, for example, the average cost of network components will increase transparency and raise confidence on the part of competitors that there are no anti-competitive cross-subsidies. This is considered to be particularly important for wholesale services. Implementing guidelines on reporting requirements and publication of information are set out in the Annex.

               6.

               Certain undertakings may be designated as universal service providers in accordance with Article 8 of the Universal Service Directive and may be subject to regulatory control on retail tariffs in accordance with the provisions of Article 17 of the universal service Directive. For those Member States that operate schemes to finance universal service obligations, it is recommended that any contribution that designated undertaking(s) receive as part of a compensation mechanism is identified in the systems for accounting separation.

               7.

               These accounting guidelines are concerned with regulatory reporting and they are not intended as a replacement for any statutory financial reporting that may be required in the Member State.

               8.

               This Recommendation will be reviewed not later than three years after the date of application.

               9.

               This Recommendation is addressed to the Member States.

      Done at Brussels, 19 September 2005.

            For the Commission

         Viviane REDING

            Member of the Commission

      (1)  OJ L 108, 24.4.2002, p. 33.

      (2)  OJ L 108, 24.4.2002, p. 7.

      (3)  OJ L 108, 24.4.2002, p. 51.

      (4)  OJ L 141, 13.5.1998, p. 6.

      (5)  OJ L 195, 29.7.1980, p. 35. Directive as last amended by Directive 2000/52/EC (OJ L 193, 29.7.2000, p. 75).

      (6)  OJ L 191, 19.7.2002, p. 22.

      (7)  The ERG was established by Commission Decision 2002/627/EC (OJ L 200, 30.7.2002, p. 38) as amended by Decision 2004/641/EC (OJ L 293, 16.9.2004, p. 30).

      (8)  Direct costs are those costs wholly and unambiguously incurred against specified activities.

      (9)  Indirect costs are those costs that require apportionment using a fair and objective attribution methodology.

      (10)  Some of the assets may be in excess of requirements or network architecture may be suboptimal. Implementation of a bottom-up economic/engineering model helps providing information about inefficient and unnecessary incurred costs, which should be removed.

      ANNEX
      GUIDELINES ON REPORTING REQUIREMENTS AND PUBLICATION OF INFORMATION
      This Annex outlines the periodic reporting framework, publication issues and the statement of compliance.
      Pursuant to the principles recommended at point 2 of the Recommendation, cost accounting and accounting separation systems must produce financial information at a level of detail which demonstrates compliance with the principles of non-discrimination and transparency, adequately identifying and attributing revenues, costs, capital employed and volumes for the various activities performed by the operator. Such accounting information should be made available promptly to the national regulatory authority.
      Good presentation of regulatory accounts ensures that the essential messages of the financial statements are communicated clearly and effectively and in as simple and straightforward a manner as possible. The presentation of information in financial statements involves some degree of abstraction and aggregation. If this process is carried out in an orderly manner, greater knowledge will result because such a presentation will satisfy the various regulatory objectives such as demonstrating that charges are cost-orientated or that there is no undue discrimination.
      Accounting reports comprise supporting notes and supplementary schedules that amplify and explain the financial statements. Both the financial statements and the supporting notes form an integrated whole.
      Regulatory accounting information serves national regulatory authorities and other parties that may be affected by regulatory decisions based on that information, such as competitors, investors and consumers. In this context, publication of information may contribute to an open and competitive market and also add credibility to the regulatory accounting system.
      However, full disclosure may be restricted by national and Community rules regarding business confidentially. Therefore, it is recommended that national regulatory authorities, having taken the opinion of operators, define what information can be considered as confidential and should not be made available.
      1.   Preparation and publication of information
      The following financial information should be prepared and published (subject to confidentiality and national law obligations) for the relevant market/service:

                  —

                  profit and loss statements,

                  —

                  capital employed statement (detailed calculation methodology and value of parameters used),

                  —

                  consolidation and reconciliation with statutory accounts or other source of costing information,

                  —

                  a description of the costing methodologies including reference to cost base and standards, allocation and valuation methodologies, identification and treatment of indirect costs,

                  —

                  non-discrimination notes (detailed transfer charges),

                  —

                  audit opinion (if required by the national regulatory authority),

                  —

                  a description of accounting policies and regulatory accounting principles,

                  —

                  a statement of compliance with Community and national rules,

                  —

                  other supplementary schedules as required.

            Reporting formats, which may follow standard statutory accounting design, should be defined in advance by the national regulatory authority, in consultation with operators. The statement of compliance with Community and national legislation, audit opinion and description of accounting principles, policies, methodologies and procedures used, namely the cost allocation methodologies, cannot be considered confidential. Without prejudice to national and Community laws on business confidentiality, the audit results should be made publicly available.
      2.   The statement of compliance
      The annual statement of compliance should at least include:

                  —

                  the conclusions of the auditor,

                  —

                  all identified irregularities,

                  —

                  recommendations made by the auditor (with a description of the corresponding effects),

                  —

                  the full description of the verification methodology followed, and

                  —

                  some aggregate financial and accounting data (such as CCA adjustments, main assumptions made on attribution methodologies, level of costs allocated and the level of granularity of the model).

            Publication of the statement of compliance and of the audit results should be presented in a form easily accessible by interested parties, such as a paper or electronic version, or published on the operator’s or national regulatory authority’s website.
      3.   Reporting period
      Publication of regulatory accounts should take place annually and as soon as possible after the end of the accounting (reporting) year. Publication of the statement must take place no later than two months after the completion of the regulatory audit or no later than the current practice as specified by regulatory obligations.