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52000HB0005

Recommendation of the European Central Bank of 11 May 2000 on the statistical reporting requirements of the European Central Bank in the field of balance of payments statistics, the international reserves template and international investment position statistics (ECB/2000/5)

Official Journal C 176 , 21/06/2001 P. 0004 - 0025

Recommendation of the European Central Bankof 11 May 2000on the statistical reporting requirements of the European Central Bank in the field of balance of payments statistics, the international reserves template and international investment position statistics(ECB/2000/5)(2001/C 176/04)THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,Having regard to the Statute of the European System of Central Banks and of the European Central Bank (hereinafter referred to as the "Statute") and in particular to Articles 5.1 and the third indent of Article 34.1 thereof,Whereas:(1) The Statute requires the European Central Bank (ECB), assisted by the national central banks, to collect either from the competent national authorities or directly from economic agents the statistical information necessary in order for it to undertake the tasks of the European System of Central Banks (ESCB). For these purposes the ECB shall inter alia cooperate with the competent authorities of the Member States.(2) Article 4 of the Council Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by the European Central Bank(1) requires the Member States to organise themselves in the field of statistics and to fully cooperate with the ESCB in order to ensure the fulfilment of the obligations arising out of Article 5 of the Statute.(3) For the fulfilment of its tasks, the ESCB needs to compile comprehensive and reliable monthly, quarterly and annual balance of payments statistics, monthly statistics showing the outstanding amount of reserve assets and annual international investment position statistics showing the main items affecting monetary conditions and exchange markets in the participating Member States, when the latter are seen as one economic territory. For this purpose the required statistical information shall be transmitted on the 30th working day following the month to which data relate for monthly balance of payment key items, within three months of the end of the quarter or year to which data relate for quarterly and annual balance of payments data, within three weeks of the month-end to which the data relate for the international reserves template and within nine months of the date to which data relate for the international investment position.(4) In cases where the reporting agents report in accordance with national rules and established practices to other competent national statistical authorities, the respective national central bank and such authorities shall cooperate with each other to ensure that the statistical requirements of the ECB are met.(5) The rules on statistical confidentiality applied by the national statistical institutes on the statistical information they collect on their own behalf must be respected.(6) In Ireland, the Central Bank, assisted by the Central Statistics Office, currently compiles monthly balance of payments estimates. It is necessary for firm monthly balance of payments estimates to be compiled by the Central Statistics Office as soon as possible. The Central Statistics Office does not compile data for the international reserve template.(7) The definitive geographical categorisation of counterparts required on international investment position data to be provided within the deadlines established in Annex IV of the present recommendation shall be defined by the ECB in the course of 2001. The deadline and definitive geographical categorisation of counterparts required on balance of payments data shall be defined by the ECB in the course of 2001.(8) It is necessary to set up a procedure to carry out technical amendments to the annexes to this recommendation in an effective manner, provided that such amendments neither change the underlying conceptual framework nor affect the reporting burden. Account shall be taken of the views of the Statistics Committee of the ESCB when following this procedure. NCBs and other competent national authorities may propose technical amendments and express views to any technical amendments to the annexes to this recommendation through the Statistics Committee and its relevant working group.(9) In the light of further statistical progress achieved, the need for a comprehensive update of Recommendation ECB/1998/NP21 of 1 December 1998 on statistical reporting requirements of the European Central Bank in the field of balance of payments and international investment position statistics has arisen. This also provides an opportunity to carry out technical amendments where necessary,HAS ADOPTED THIS RECOMMENDATION:Article 1DefinitionsFor the purposes of this recommendation:- "participating Member State" shall mean a Member State which has adopted the single currency in accordance with the Treaty,- "resident" and "residing" shall mean having a centre of economic interest in the economic territory of a country, as described in Annex A of Council Regulation (EC) No 2533/98,- "economic territory of the participating Member States" shall mean the participating Member States viewed as one economic territory,- "euro area" shall mean the economic territory of the participating Member States, and the ECB,- "Eurosystem" shall mean the NCBs of the participating Member States and the ECB,- "cross-border transaction" shall mean any transaction that creates or redeems, in full or in part, claims or debts or any transaction that implies the transfer of a right over an object between residents of participating Member States seen as one economic territory and residents of non-participating Member States and/or residents of third countries. "Cross-border positions" shall mean the stock of financial claims on and financial liabilities to residents of non-participating Member States and/or residents of third countries. Cross-border positions shall also encompass land, other real property and other immovable assets physically located outside the economic territory of the participating Member States and owned by residents of participating Member States and/or located inside the economic territory of the participating Member States and owned by residents of non-participating Member States and/or residents of third countries; and monetary gold and special drawing rights (SDRs) owned by residents of participating Member States. However, until 31 December 2005, to the extent necessary for the compilation of the portfolio investment account and the portfolio investment income account within the balance of payments and the portfolio investment account within the international investment position, statistics covering the economic territory of the participating Member States, the terms "cross-border positions" and "cross-border transactions" also comprise positions and transactions in the assets and/or liabilities of residents of participating Member States vis-à-vis residents of other participating Member States,- "reserve assets" shall mean highly liquid, marketable and creditworthy claims held by the Eurosystem on residents of non-participating Member States and/or residents of third countries and denominated in currencies other than the euro, plus gold, reserve positions in the International Monetary Fund (IMF) and SDR holdings,- "other foreign currency assets" shall mean claims held by the Eurosystem on residents of participating Member States denominated in currencies other than the euro and claims on residents of non-participating Member States and/or residents of third countries denominated in currencies other than the euro, which do not meet the liquidity, marketability and creditworthiness criteria of reserve assets,- "reserve-related liabilities" shall mean predetermined and contingent short-term net drains on the Eurosystem of a kind similar to reserve assets and other foreign currency assets of the Eurosystem,- "balance of payments" shall mean the statistical statement that reports with the appropriate breakdown cross-border transactions during the period under review,- "international reserves template" shall mean the statistical statement that reports with the appropriate breakdown stocks of reserve assets, other foreign currency assets and reserve-related liabilities of the Eurosystem at a reference date,- "international investment position" shall mean the annual balance sheet that reports with the appropriate breakdown the stock of cross-border financial assets and liabilities at a reference date.Article 2Availability of statistical data to the national central banks1. In so far as the collection of statistical information concerning the cross-border positions and the cross-border transactions is entrusted to the addressees of this recommendation, they shall ensure that is made available to the respective national central banks in a timely manner.2. The data shall be made available in accordance with the statistical standards and requirements of the ECB concerning balance of payments statistics, the international reserves template and international investment position statistics as laid down in Annexes I, II, III, IV and V of this recommendation. Without prejudice to the ECB's monitoring task as laid down in Annex VI of this recommendation, the addressees of this recommendation shall monitor the quality and reliability of statistical information made available to the national central bank.Article 3Permanent cooperationThe addressees of this recommendation shall establish with the respective national central bank, in writing, the appropriate modalities of statistical cooperation to ensure a permanent structure of data transmission aimed at fulfilling the statistical standards and requirements of the ECB, unless the same result is already achieved on the basis of national legislation.Article 4Simplified amendment procedureTaking account of the views of the Statistics Committee, the Executive Board of the ECB shall be entitled to make technical amendments to the annexes to this recommendation, provided that such amendments neither change the underlying conceptual framework nor affect the reporting burden.Article 5Final provisions1. This recommendation shall replace Recommendation ECB/1998/NP21.2. This recommendation is addressed to the Belgian-Luxembourg Exchange Institute, the Central Statistics Office in Ireland and the Ufficio Italiano dei Cambi.3. This recommendation shall be published in the Official Journal of the European Communities.Done at Frankfurt am Main on 11 May 2000.The President of the ECBWillem F. Duisenberg(1) OJ L 318, 27.11.1998, p. 8.ANNEX ISTATISTICAL REPORTING REQUIREMENTS OF THE EUROPEAN CENTRAL BANK1. Statistical obligations of the national central banks (NCBs)1.1. The NCBs shall make available to the European Central Bank (ECB) data on the cross-border transactions, stock of reserve assets, other foreign currency assets and reserve-related liabilities and cross-border positions necessary to enable the ECB to compile the aggregated balance of payments, international reserves template and international investment position of the economic territory of the participating Member States.1.2. The content of the required statistical information shall be made available to the ECB in accordance with its statistical requirements laid down in Annexes II, III and IV of this recommendation.2. Timeliness2.1. Key items in the monthly balance of payments of the economic territory of the participating Member States shall be made available to the ECB by the NCBs by the close of business on the 30th working day following the end of the month to which the data relate.2.2. The quarterly detailed breakdown for the balance of payments of the economic territory of the participating Member States shall be made available to the ECB by the NCBs within three months of the end of the quarter to which the data relate.2.3. The annual data of an aggregated balance of payments of the economic territory of the participating Member States shall be made available to the ECB by the NCBs within three months of the end of the year to which the data relate with the same breakdowns as for the quarterly data.2.4. The data on the international reserves template shall be made available to the ECB within three weeks of the end of the month to which the data relate.2.5. The data on the international investment position shall be made available to the ECB by the NCBs within nine months of the year-end date to which the data relate.2.6. National collection of the data shall be organised with these deadlines in view.3. Transmission standardThe required statistical information shall be made available to the ECB in a form according to the requirements laid down in Annex V of this recommendation.ANNEX IISTATISTICAL REQUIREMENTS OF THE EUROPEAN CENTRAL BANK1. Balance of payments statisticsThe European Central Bank (ECB) requires balance of payments statistics at three different frequencies: monthly, quarterly and annually in respect of the corresponding reference calendar periods. As far as possible, they should be consistent with other statistics provided for the conduct of monetary policy.1.1. Monthly balance of payments statistics - key itemsObjectiveThe objective is a monthly balance of payments of the economic territory of the participating Member States showing the main items affecting monetary conditions and exchange markets.RequirementsIt is essential that the data are suitable for use in the calculation of the balance of payments of the economic territory of the participating Member States.For the purposes of monetary policy and foreign exchange operations, the ECB's requirement for monthly balance of payments statistics is confined to broad categories of transactions or "key items" (see Annex III, Table 1). The short deadline for the provision of the monthly key items, their highly aggregated nature and their use for monetary policy purposes and foreign exchange operations allow some departure from international guidelines (see Article 2(2) of this recommendation), where unavoidable. Recording on a full accruals or transactions basis is not required. In agreement with the ECB, national central banks (NCBs) of the participating Member States may provide data on the current and financial account on a settlement basis. Where necessary to meet the deadline, estimates or preliminary data will be accepted.The requirement for each broad category of transaction is assets and liabilities (or credits and debits for current account items). In general this requires NCBs of the participating Member States, within external transactions, to distinguish between transactions with residents of other participating Member States and transactions outside the economic territory of the participating Member States, and the NCB of each Member State to do so consistently. When membership of the euro area changes, the NCBs in the participating Member States are required to implement the change in the definition of the country composition of the euro area from the date on which the change in membership takes effect. Best estimates for historical data covering the enlarged euro area are requested from NCBs of former participating Member States and the new participating Member State(s).In order to permit a meaningful aggregation for the economic territory of the participating Member States on a monthly basis in the area of portfolio investment, a split is required between transactions in securities issued by residents of participating Member States and securities issued by residents of all other countries. For the purpose of making this distinction, it is necessary to identify separately whether or not the issuer of the security is a resident of a participating Member State. The net transactions in portfolio investment assets of the economic territory of the participating Member States are compiled by aggregating reported net transactions in securities issued by non-residents. Net transactions in portfolio investment liabilities of the economic territory of the participating Member States are compiled by consolidation of net transactions in total national liabilities and net transactions in securities issued and purchased by residents of the participating Member States.An analogous reporting requirement and compilation method for the aggregate are applied for portfolio investment income.1.2. Quarterly and annual balance of paymentsObjectiveThe objective of the quarterly and annual balance of payments of the economic territory of the participating Member States is to provide more detailed information to permit further analysis of external transactions. These statistics will notably contribute to the financial accounts under preparation and to the joint publication of EU/euro area balance of payments in cooperation with the Commission of the European Communities (Eurostat). A sector breakdown is the basis for supplementing monetary policy analysis with a monetary presentation of the euro area balance of payments statistics.RequirementsQuarterly and annual balance of payments statistics required by the ECB conform to the greatest extent possible to the standards set in international guidelines (see Article 2(2) of this recommendation). The breakdown of quarterly and annual balance of payments statistics required by the ECB is presented in Annex III, Table 2. Special European harmonised concepts and definitions of the capital and financial account are set out in Annex IV of this recommendation.The breakdown of the quarterly/annual current account is similar to the requirement for the monthly figures. Only key items are required for goods, services and transfer payments. For income, a more detailed breakdown is needed.In the financial account, the requirements of the International Monetary Fund (IMF) standard components of the balance of payments manual (BPM5) for the other investment item are simplified. This simplification includes the removal of a distinction between loans and deposits on each side of the balance sheet, the removal of the maturity breakdown and a change in the presentation of the breakdown (i.e. sector as first priority). This sectoral breakdown is compatible but not identical with the BPM5 where instruments have priority.Member States are expected to distinguish in their quarterly and annual balance of payments statistics between transactions with other participating countries and all other external transactions. As for the monthly data, a split between transactions in securities issued by residents of participating Member States and securities issued by residents of all other countries is required for quarterly and annual data in the areas of portfolio investment. The same holds for the portfolio investment income.For the balance of payments of the economic territory of the participating Member States, accrued investment income data are required on a quarterly basis. In line with the System of National Accounts, the BPM5 recommends that interest should be recorded on an accruals basis. This recommendation affects the current account (investment income) as well as the financial account.2. International reserves templateObjectiveThe objective is a monthly statement of the reserve assets, other foreign currency assets and reserve-related liabilities held by participating NCBs and the ECB following the presentation of the common IMF/Bank for International Settlements (BIS) template on "international reserves and foreign currency liquidity". This information complements the data on reserve assets included in the euro area balance of payments and international investment position statistics.RequirementsReserve assets of the euro area are highly liquid, marketable and creditworthy claims held by the ECB ("pooled reserves") and the national central banks in participating Member States ("unpooled reserve assets") on non-residents of the euro area and denominated in foreign currency (i.e. in currencies other than the euro), including gold, reserve positions in the IMF and SDR holdings. They may include positions in financial derivatives. Reserve assets are compiled on a gross basis without any netting-off of reserve-related liabilities. The breakdown of the data required from the participating Member States is presented in Annex III, Table 3, Section I.A.Foreign currency denominated assets of the Eurosystem which do not meet this definition, namely claims on residents of participating Member States and claims on residents of non-participating Member States which do not meet the liquidity, marketability and creditworthiness criteria, are included under the "other foreign currency assets" item of the international reserves template (Annex III, Table 3, Section I.B).Euro-denominated claims on non-residents and balances in foreign currency held by governments of participating Member States are not considered as reserve assets; such amounts are recorded as "other investment" if they represent claims on non-residents of the euro area.In addition, information on predetermined and contingent short-term net drains of the Eurosystem connected to reserve assets and other foreign currency assets of the Eurosystem, the so-called "reserve-related liabilities", is to be reported under Annex III, Table 3, Sections II to IV.3. International investment position statisticsObjectiveThe objective is an annual statement of the external assets and liabilities of the economic territory of the participating Member States as a whole, for monetary policy and exchange market analysis. The ECB requires international investment position statistics in respect of end-of-calendar-year stock levels. This statistical information may also assist in the compilation of balance of payments flows.RequirementsThe international investment position data required by the ECB conform to the greatest extent possible to the standards set in international guidelines (see Article 2(2) of this recommendation). The ECB compiles the international investment position for the economic territory of the participating Member States as a whole. The breakdown of the international investment position for the economic territory of the participating Member States is presented in Annex III, Table 4.The ECB may require items of particular significance for the conduct of monetary policy, specifically those items within the other investment account which are currently provided to the BIS for its statistics on international banking, on a quarterly basis.The international investment position shows financial stocks at the end of the reference period, valued at end-period prices. As such, part of the change in the value of stocks during the reference period will be due to the financial transactions that have taken place and been recorded in the balance of payments. Likewise, part of the changes in positions at the beginning and at the end of a given period will be caused by changes in the prices of the financial assets and liabilities shown. In the event that stocks are denominated in currencies other than the unit of account used for the international investment position, changes in the exchange rates vis-à-vis other currencies will also affect the values of those stocks. Finally, any other change in stocks, which is not due to the abovementioned factors will be considered as other adjustments.A proper reconciliation between the financial flows and stocks of the economic territory of the participating Member States requires these changes in value owing to price, exchange rate changes and other adjustments to be reflected separately.However, for practical reasons, at the start of stage III of economic and monetary union, these changes will be shown together as a lump sum under a single heading and the international investment position will be compiled on a net basis relying on aggregate national data. In addition, specific rules may be applied for the valuation of equity capital in direct investment, notably in the case of unquoted shares.Coverage of the international investment position is as close as possible to that for quarterly/annual balance of payments flows. The concepts, definitions and breakdowns are in line with those used for quarterly/annual balance of payments flows. As far as possible, data on the international investment position should be considered with other statistics, such as money and banking statistics, financial accounts and national accounts. These stocks encompass direct investment position data compiled by the Commission of the European Communities (Eurostat).Portfolio assets within the international investment position shall be compiled from pure stock data related to end-of-year holdings of equity and short and long-term debt securities issued by non-euro area residents, separating each category. The data requirements established by the ECB are fully consistent with those adopted for the IMF coordinated portfolio investment survey.ANNEX IIIREQUIRED BREAKDOWNSTABLE 1Monthly key items for the balance of payments of the euro area"extra": means transactions with non-residents of the euro area (for portfolio investment assets and related income it refers to the residency of the issuers)."intra": means cross-border transactions within the euro area."national": means the amount of all cross-border transactions by residents of a Member State (used only in connection with liabilities on portfolio investment accounts and the net balance of the financial derivatives accounts).>TABLE>>TABLE>TABLE 2Quarterly and annual balance of payments of the euro area>TABLE>>TABLE>TABLE 3Monthly international reserves of the Eurosystem; reserve-related liabilities of the euro areaI. Official reserve assets and other foreign currency assets (approximate market value)A. Official reserve assets(1) Foreign currency reserves (in convertible foreign currencies)(a) Securities, of which:issuer headquartered in the euro area(b) total currency and deposits with(i) other national central banks, Bank of International Settlements (BIS) and IMF(ii) banks headquartered in the euro area and located abroad(iii) banks headquartered and located outside the euro area(2) IMF reserve position(3) SDRs(4) Gold (including gold deposits and gold swaps)(5) Other reserve assets(a) financial derivatives(b) loans to non-bank non-residents(c) other.B. Other foreign currency assets(a) securities not included in official reserve assets(b) deposits not included in official reserve assets(c) loans not included in official reserve assets(d) financial derivatives not included in official reserve assets(e) gold not included in official reserve assets(f) other.II. Predetermined short-term net drains on foreign currency assets (nominal value)>TABLE>III. Contingent short-term net drains on foreign currency assets (nominal value)>TABLE>IV. Memo items(1) To be reported with standard periodicity and timeliness:(a) short-term domestic currency debt indexed to foreign exchange rates(b) financial instruments denominated in foreign currency and settled by other means (e.g. in domestic currency)- non-deliverable forwards(i) short positions(ii) long positions- other instruments(c) pledged assets- included in reserve assets- included in other foreign currency assets(d) securities lent and on repo- lent or repoed and included in section I- lent or repoed but not included in section I- borrowed or acquired and included in section I- borrowed or acquired but not included in section I(e) financial derivative assets (net, marked to market)- forwards- futures- swaps- options- other(f) derivatives (forward, futures or options contracts) that have a residual maturity greater than one year, which are subject to margin calls.- aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency (including the forward leg of currency swaps)(i) short positions(ii) long positions- aggregate short and long positions of options in foreign currencies vis-à-vis the domestic currency(i) short positions- bought puts- written calls(ii) long positions- bought calls- written puts(2) To be disclosed less frequently (e.g. once a year):(a) currency composition of reserves (by groups of currencies)- currencies in SDR basket- currencies not included in SDR basket.TABLE 4Annual international investment position of the euro area>TABLE>International investment positions for end-1999 and end-2000 should refer to "national data"."extra": means positions with non-residents of the euro area (for portfolio investment assets and related income it refers to the residency of the issuers)."intra": means cross-border positions within the euro area."national": means the amount of all cross-border positions by residents of a Member State (used only in connection with liabilities on portfolio investment accounts and the net balance of the financial derivatives accounts).ANNEX IVCONCEPTS AND DEFINITIONS TO BE USED IN THE BALANCE OF PAYMENTS STATISTICS, INTERNATIONAL RESERVES TEMPLATE AND INTERNATIONAL INVESTMENT POSITION STATISTICS TO BE REPORTED TO THE EUROPEAN CENTRAL BANKIn order to construct meaningful aggregated external statistics for the economic territory of the participating Member States, concepts and definitions have been defined in the field of balance of payments statistics (income, capital and financial accounts), the international reserves template and international investment position statistics. These requirements are based on the so-called "Implementation package" (July 1996) and additional documents endorsed by the Governing Council of the European Central Bank (ECB). Current international standards, such as the International Monetary Fund (IMF) balance of payments recommendations (balance of payments manual (BPM5), IMF/Bank for International Settlements template on "International reserves and foreign currency liquidity"), have been used as a reference in formulating these concepts and definitions. The most important harmonisation proposals are listed below. Further guidance is available in the corresponding reports to which reference codes are provided in brackets. The reports referred to do not form part of the legal text.1. Concepts and definitions of selected items1.1. Investment income (ST/SC/BP/INCO9801)Definition: Investment income incorporates income derived from a resident entity's ownership of a foreign financial asset and, symmetrically, income derived from a non-resident entity's ownership of a domestic financial asset.Coverage: Investment income includes receipts and payments on direct investment, portfolio investment and other investment incomeand receipts on reserve assets. The requirements for monthly key items, in addition to quarterly and annual balance of payments, are almost identical to IMF standard components as defined in the BPM5. The main difference is that the ECB does not require a breakdown of direct investment income on equity into distributed and undistributed profits.Time of recording: Interest income is recorded on an accruals basis (this is not required for the monthly data). Dividends are recorded as of the date on which they become payable.1.2. Capital account (STA/WGS/BOP/CAPITAL96)Definition: The definition of the capital account covers capital transfers and the acquisition/disposal of non-produced non-financial assets. Current transfers are to be recorded in the current account.Coverage: The standard components of the capital account consist of a sectoral breakdown into the items general government and other sectors, with a further breakdown thereafter. The ECB will compile only a lump-sum capital account, within which no breakdown is required. The separation between current and capital transfers is important and generally depends, in practice, upon the use of the transfer by the recipient country.1.3. Direct investment (STA/WGS/BOP/DI95)Definition: According to international standards (IMF/OECD), ownership of 10 % or more of the equity of an enterprise indicates the existence of a long-term interest on the part of the direct investor and therefore constitutes a direct investment relationship. The relationship based on this criterion can exist directly between two entities or indirectly via a third entity being itself in a direct investment relationship with the two others. As a consequence, a direct investment relationship can exist between a number of related enterprises, whether the linkages involve a single chain or a number of chains. It can extend to indirect relationships, such as to direct investment enterprise's subsidiaries, sub-subsidiaries and associates as well as to fellow subsidiaries (sister companies).Coverage: Special purpose entities (SPEs) are considered as regular direct investors and/or direct investment enterprises. Those NCBs of the participating Member States that are not in a position to follow this recommendation provide data on SPEs separately. In order to avoid discrepancies and in line with both the recommendations of the IMF and Eurostat/OECD guidelines, direct investment relationships are recorded using the "directional" principle. In order to achieve consistency in the compilation of reinvested earnings, the calculation method and the time of recording are agreed. Inter-company financial transactions, including trade credits, are regarded as direct investment capital.1.4. Portfolio investment (STA/WGS/BOP/PORT95)Definition: The euro area portfolio investment account includes (i) equity securities; and (ii) debt securities in the form of bonds and notes and money market instruments, unless they are categorised either as direct investment or as reserve assets. Financial derivatives as well as repurchase agreements and bond lending are excluded from portfolio investment.Coverage: The equity securities item covers all instruments representing claims on the residual value of incorporated enterprises after the claims of all creditors have been met. Shares, stocks, preferred stock or shares, participation, or similar documents usually denote ownership of equity. Transactions/holdings of shares of collective investment institutions, e.g. investment funds, are also included.Bonds and notes are, in principle, securities issued with an initial maturity of more than one year which usually give the holder (i) the unconditional right to a fixed monetary income or contractually determined variable monetary income (payment of interest being independent of the earnings of the debtor); and (ii) the unconditional right to a fixed sum in repayment of principal on a specified date or dates.Unlike bonds and notes, money market instruments are securities issued with an initial maturity of less than or equal to one year. They generally give the holder the unconditional right to receive a stated, fixed sum of money on a specified date. These instruments are usually traded, at a discount, in organised markets; the discount is dependent upon the interest rate and the time remaining to maturity.Time of recording: The recording of transactions in financial items takes place when both creditor and debtor enter the claim and liability, respectively, in their books (in accordance with the BPM5).Recommendations for methods of recording the balance of payments on a full accruals basis have been agreed (STA/WGS/BOP/ACC9711). For the balance of payments of the economic territory of the participating Member States, accrued investment income is required only on a quarterly and annual basis. Recording on a full accruals basis is not a requirement for the monthly key items balance of payments.1.5. Financial derivatives (April 1997, October 1997, April 1998: STA/WG/BOP/SG59802)Definition: Financial derivatives are financial instruments that are linked to a specific financial instrument, indicator or commodity, and through which specific financial risks can be traded in financial markets in their own right. Transactions in financial derivatives are treated as separate transactions rather than as integral parts of the value of underlying transactions to which they may be linked.Coverage: Transactions and positions in options, futures, swaps, forward foreign exchange contracts, credit derivatives and embedded derivatives are recorded in the balance of payments, international reserves and international investment position.Initial margin payments are regarded as changes in deposits and should be recorded, if identifiable, in the other investment account. The treatment of variation margin payments depends on the form of the variation margin; options-style variation margins are regarded, in principle, as changes in deposits and should be recorded, if identifiable, under the item "other investment". Futures-style variation margin payments are regarded, in principle, as transactions in derivatives and should be recorded in the financial derivatives account.In the case of options, the full premium (i.e. the purchase/sale price of the options and the implied service charge) should be recorded as financial derivatives.The net stream of settlement flows associated with interest rate derivatives should be recorded as financial derivatives.Embedded derivatives should be recorded together with the underlying financial instrument and should not be recorded and valued separately in balance of payments, international reserves and international investment position statistics.The classification of specific instruments of credit derivatives should be decided upon on a case-by-case basis.The valuation of financial derivatives should be conducted on a marked-to-market basis.Time of recording: The recording of transactions in financial items takes place when both creditor and debtor enter the claim and liability, respectively, in their books (in accordance with the BPM5). Owing to practical problems involved in separating the asset and liability flows in a meaningful way for some derivative instruments, all financial derivatives transactions in the balance of payments of the economic territory of the participating Member States are being recorded on a net basis for the time being. Financial derivative asset and liability positions in the international investment position statistics are recorded on a gross basis, with the exception of those financial derivatives falling into the category of reserve assets, which are recorded on a net basis.1.6. Other investment (STA/WG/BOP/OTH95)Definition: Other investment is defined as a residual category that includes all financial transactions not covered in direct investment, portfolio investment, financial derivatives or reserve assets accounts.Coverage: Other investment covers trade credits, loans/currency and deposits and other assets/other liabilities (in accordance with the BPM5).Balances and transactions between NCBs arising from operations settled via Target are to be recorded on a net basis under the asset side of loans and deposits of other investment of monetary authorities.The accounting practice of banks is the guiding principle for the balance of payments treatment of repurchase agreements, sell/buy-back transactions and bond lending, rather than the "transfer of ownership" criterion. Where there is no accepted international accounting standard, a common practice, which would meet statistical needs, is adopted in agreement with the ECB. This recommendation leads to the recording of genuine repurchase agreements, sell/buy-back transactions and bond lending as collateralised loans.Time of recording: The principles of "transfer of ownership", "time of settlement" and "time of payment" all conform to the IMF recommendations.In order to achieve consistent aggregate data for the economic territory of the participating Member States, no distinction is made between loans and deposits within each sector and no maturity breakdown is used. A sectoral presentation of the breakdown, compatible with the IMF standard components, is used in quarterly and annual data. Member States may add detail in national statistics. For the monthly key items, a split between short-term and long-term flows in the banking sector is required.1.7. Reserve assetsDefinition: In line with BPM5 recommendations, reserve assets of the euro area are highly liquid, marketable and creditworthy claims held by the ECB ("pooled reserves") and the participating NCBs ("unpooled reserve assets") on non-residents of the euro area and denominated in foreign currency (i.e. in currencies other than the euro), plus gold, reserve positions in the IMF and SDR holdings. Related assets of the ECB and the participating NCBs which do not meet this definition, namely euro-denominated claims on non-residents and foreign currency denominated claims on residents of the euro area; for example, deposits denominated in foreign currency placed with banking institutions resident in the euro area, are therefore not treated in external statistics as reserve assets of the euro area. Nor are balances in foreign currency held by governments of participating Member States considered to be reserve assets.Coverage: Transactions and positions on reserve assets of the euro area are presented in the euro area balance of payments and international investment position, respectively. The presentation follows the BPM5 standard components although a separate category for financial derivatives has been introduced, in accordance with the outline adopted by the IMF. Holdings of reserve assets, including gold holdings, should be valued in the international investment position using closing mid-market prices at the end of the appropriate periods and converted into euro using the closing mid-market exchange rates prevailing on the last day of the reference period; transactions in reserves should be recorded in the balance of payments at the market price at the time of the transaction and converted into euro using the market exchange rates at the time of the transaction. Income on reserve assets is to be recorded indistinguishably under the "other investment" item of the investment income account, including interest income on reserve holdings of debt securities, and on an accruals basis at least quarterly. Reserve assets in the balance of payments and international investment position statements are to be reflected on a gross basis without any netting-off of reserve-related liabilities, except for financial derivatives where net recording is to be applied.The concept that usable reserves might be a more important indicator of a country's ability to meet its foreign exchange obligations than gross reserves as shown in the balance of payments and international investment position statements gained in importance and has been adopted in the IMF's special data dissemination standard. To calculate usable reserves, data on gross reserves need to be supplemented with information about other foreign currency assets and reserve-related liabilities. Accordingly, monthly data on (gross) reserve assets of the Eurosystem are supplemented with information on other foreign currency assets and predetermined and contingent short-term net drains on the gross reserve assets classified according to residual maturity. Moreover, a currency split between gross reserve assets denominated in SDR currencies (in total) and other currencies (in total) with a quarter's lag is also required.Regarding specific items, holdings of monetary gold should remain unchanged in all reversible gold transactions (gold swaps, repos, loans and deposits). Repo transactions in foreign currency denominated securities result in increases in the total amount of the reserve assets of the cash-borrowing NCB owing to the fact that the securities repoed still remain on the balance sheet; in the case of reverse repos, the cash-lending monetary authority does not register any variation in the total amount of reserve assets if the non-resident counterpart is another monetary authority or financial institution, owing to the fact that the claim on the cash borrower is then regarded as a reserve asset.2. Implementation methods for geographical allocation (STA/WGS/BOP/GEO96)Difficulties in the compilation of geographically broken down balance of payments and international investment position statistics are resolved by means of a step-by-step approach. This approach involves three steps towards meeting data requirements, which are progressively more demanding. The portfolio investment account, the portfolio investment income account and the financial derivatives account respectively deserve special attention.2.1. General approach (to be applied for all accounts of the balance of payments and international investment position - with the exceptions listed below)Step 1: Compilation method at the euro area level: addition of national total net transactions/positions.Implemented since 1999 for international investment positions.Step 2: Compilation method at the euro area level: separate addition of transactions/positions with non-residents for credits and debits or net assets and net liabilities (balance of payments)/assets and liabilities (international investment position).Data requirements at the NCB level: separate identification of transactions/positions between residents of the participating Member States and non-euro area residents.Implemented for balance of payments: since January 1999.Deadline for implementation for international investment position: end-September 2002 - data referring to end-2001.Step 3: Compilation method at the euro area level and data requirements at the Member State level: similar to step 2 with the addition of a geographical breakdown within extra-euro area transactions/positions. This is only necessary for quarterly and annual statistics.Deadline for implementation for international investment position: end-September 2004 - data referring to end-2003.2.2. Portfolio investment accountStep 1: Compilation method at the euro area level: addition of national total net portfolio investment transactions/positions.Implemented since 1999 for international investment position.Step 2: Compilation method at the euro area level: addition of net transactions/positions in securities issued by non-residents for portfolio investment assets. Consolidation of net transactions/positions in total national liabilities and transactions/positions in securities issued and purchased by residents of the participating Member States for portfolio investment liabilities.Data requirements at the NCB level: transactions/positions in portfolio investment assets broken down into transactions/positions in euro area securities issued by residents of participating Member States and other securities. To achieve this it is necessary to identify the issuer (debtor) of the security in order to establish whether the issuer is a resident of one of the participating Member States or a non-resident. For transactions/positions in portfolio investment liabilities, only national total net figures are required.Portfolio investment positions within the international investment position shall be compiled on the basis of pure stock data related to end-of-year holdings of equity and short and long-term debt securities issued by non-euro area residents, taking advantage of the fact that the data requirements established by the ECB are fully consistent with participation in the IMF coordinated portfolio investment survey.Implemented for portfolio investment transactions since January 1999.Deadline for implementation for portfolio investment stocks: end-September 2002 - data referring to end-2001.Step 3: Compilation method at the euro area level and data requirements at the NCB level: similar to step 2 with the addition of a geographical breakdown (as yet unspecified) within extra-euro area transactions/positions on the asset side. No geographical breakdown into extra-euro area transactions/position is required for the liabilities side. Step 3 only applies to quarterly and annual statistics on transactions and annual statistics on positions.Deadline for implementation for portfolio investment positions (asset side only): end-September 2004 - data referring to end-2003.2.3. Portfolio investment income accountStep 1: Compilation method at the euro area level: addition of national total net investment income transactions.Step 2: Compilation method at the euro area level: addition of income credit transactions derived from portfolio investment assets issued by non-residents. Consolidation of income debit transactions derived from total national net liabilities and credit transactions derived from securities issued by residents of the participating Member States.Data requirements at the NCB level: credit transactions in portfolio investment income broken down into transactions derived from securities issued by residents of participating Member States and from securities issued by residents of other countries. To achieve this it is necessary to identify the issuer (debtor) of the security in order to establish whether the issuer is a resident of one of the participating Member States or a non-resident. For debit transactions derived from portfolio investment liabilities, only national total figures are required.Implemented since January 2000.Step 3: Compilation method at the euro area level and data requirements at the NCB level: similar to step 2 with the addition of a geographical breakdown within extra-euro area credit transactions. No geographical breakdown into extra-euro area income transactions is required for the debit side. Step 3 is only necessary for quarterly and annual statistics.2.4. Financial derivatives accountTransactionsStep 1: The requirements for transactions in financial derivatives with extra-euro area counterparts only comprise a net presentation of this item.Compilation method at the euro area level: addition of national total net transactions in financial derivatives.PositionsStep 1: Compilation method at the euro area level: addition of national total net positions in financial derivatives.Implemented since 1999.Step 2: Compilation method at the euro area level: separate addition of net positions in financial derivatives with non-residents on the asset and liabilities side.Data requirements at the NCB level: separate identification of positions between residents of the participating Member States and positions with residents of other countries (non-euro area) as defined by the location of the market where relevant, or the actual counterpart for over-the-counter financial derivatives.Deadline for implementation: end-September 2002 - data referring to end-2001.Step 3: A geographical breakdown within extra-euro area positions in financial derivatives. This is only necessary for quarterly and annual statistics.3. Classification by institutional sector in the euro area aggregatesThe sector breakdown of euro area aggregates comprises monetary authorities, general government, monetary financial institutions (MFIs) and other sectors of the euro area.Monetary authoritiesThe "monetary authorities" sector of the euro area statistics consists of the Eurosystem, i.e. the ECB and the NCBs of participating Member States.General governmentThe "general government" sector of the euro area statistics is consistent with the definition of that sector in the SNA 93 and ESA 95 and thus comprises the following units:- central government,- State/regional government,- local government,- social security funds.MFIs excluding monetary authoritiesThis sector coincides with the MFI sector for money and banking statistics (excluding monetary authorities). It comprises:(i) credit institutions as defined by Community law, i.e. undertakings whose business is to receive deposits or other repayable funds from the public (including the proceeds arising from the sales of bank bonds to the public) and to grant credit for their own account; and(ii) all other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs, and, for their own account (at least in economic terms), to grant credits and/or to make investments in securities.Other sectorsThe "other sectors" category of the euro area statistics comprises a variety of institutional units, mainly:(i) other financial institutions not included in the MFI definition, such as collective investment institutions not deemed to be money market funds, real estate investment institutions, securities dealers, mortgage credit institutions, insurance companies, pension funds and financial auxiliaries; and(ii) non-financial institutions, such as public and private non-financial enterprises, non-profit institutions serving households, and households.ANNEX VTRANSMISSION OF THE DATA TO THE EUROPEAN CENTRAL BANKThe exchange of the statistical informationneeded by the European Central Bank (ECB) relies upon the facility provided by the ESCB-Net. All exchanges of data within the ESCB use the same conceptual data model.National central banks shall observe the recommendations listed below in order to ensure that data transmission functions satisfactorily, in particular with regard to the following items:- Completeness: national central banks shall report all required series keys. To report no series keys or non-listed series keys would be considered as incomplete reporting. Should an observation be missing, the omission shall be recorded using the corresponding observation status flag. In addition, when revisions are made to only a sub-set of series keys, the validation rules should be applied to the whole balance of payments.- Sign convention: the data transmission of national central banks to the ECB as well as the European Commission (Eurostat) follows a uniform sign convention for all data which are to be reported. Under this sign convention, credits and debits in the current and capital account must be reported with a plus sign, whilst net balances are to be calculated and reported as credits minus debits. In the financial account, decreases in net assets/increase in net liabilities must be reported with a plus sign, whereas increases in net assets/decreases in net liabilities must be reported with a minus sign. Net balances are to be calculated and reported as net changes in assets plus net changes in liabilities. In transmitting international investment position data, the net positions should be calculated and reported as asset position minus liability position.- Accounting identities of the data: the complete validation rules which were distributed and which are available on request must be implemented by the national central banks before the data are transmitted to the ECB.ANNEX VIMONITORING OF STATISTICAL COMPILATION METHODSThe European Central Bank (ECB) will monitor the compilation methods used for the reporting on the balance of payments and international investment position statistics, as well as the concepts and definitions applied on a regular basis by the Member States participating in the euro area. The monitoring will be carried out in connection with updating and maintaining of the document entitled "European Union balance of payments/international investment position statistical methods" (B.o.p. Book), and by the six-monthly review procedure.The B.o.p. Book contains information on the structure of balance of payments statistical and international investment position data for all Member States. There are detailed descriptions of data compilation methods and of the concepts and definitions applied, as well as information on departures from the agreed definitions for the balance of payments and international investment position statistics in the Member States.The B.o.p. Book will be updated on annual basis in close cooperation with the Member States.The six-monthly review forms part of the process of updating the B.o.p. Book. The six-monthly review procedure is based on reports to be endorsed by the Governing Council of the ECB covering the statistical treatment of the investment income account and the financial account in the balance of payments and international investment position statistics and forms a basis for the ECB to assess the quality of the data provided to the ECB for the balance of payments statistics.


title: Recommendation for a COUNCIL RECOMMENDATION on the National Reform Programme 2011 of Estoniaand delivering a Council opinionon the Stability Programme of Estonia, 2011-2015

text:
   EUROPEAN COMMISSION
                                  Brussels, 7.6.2011
                                  SEC(2011) 804 final
                   Recommendation for a
           COUNCIL RECOMMENDATION
   on the National Reform Programme 2011 of Estonia
             and delivering a Council opinion
    on the Stability Programme of Estonia, 2011-2015
                   {SEC(2011) 715 final}
EN                                                    EN
 ---pagebreak---                                            Recommendation for a
                                    COUNCIL RECOMMENDATION
                         on the National Reform Programme 2011 of Estonia
                                     and delivering a Council opinion
                          on the Stability Programme of Estonia, 2011-2015
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular
   Article 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of
   the surveillance of budgetary positions and the surveillance and coordination of economic
   policies1, and in particular Article 5(3) thereof,
   Having regard to the recommendation of the European Commission2,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   After consulting the Economic and Financial Committee,
   Whereas:
   (1)     On 26 March 2010, the European Council agreed to the European Commission's
           proposal to launch a new strategy for jobs and growth, Europe 2020, based on
           enhanced coordination of economic policies, which will focus on the key areas where
           action is needed to boost Europe’s potential for sustainable growth and
           competitiveness.
   (2)     On 13 July 2010, the Council adopted a recommendation on the broad guidelines for
           the economic policies of the Member States and the Union (2010 to 2014) and, on 21
           October 2010, adopted a decision on Guidelines for the employment policies of the
           Member States,3 which together form the “integrated guidelines”. Member States were
           invited to take the integrated guidelines into account in their national economic and
           employment policies.
   1
           OJ L 209, 2.8.1997, p.1.
   2
           OJ C , , p. .
   3
           Maintained for 2011 by Council Decision 2011/308/EU of 19 May 2011.
EN                                                     2                                         EN
 ---pagebreak---    (3) On 12 January 2011, the Commission adopted the first Annual Growth Survey,
       marking the start of a new cycle of economic governance in the EU and the first
       European semester of ex-ante and integrated policy coordination, which is anchored in
       the Europe 2020 strategy.
   (4) On 25 March 2011, the European Council endorsed the priorities for fiscal
       consolidation and structural reform (in line with the Council’s conclusions of 15
       February and 7 March 2011 and further to the Commission’s Annual Growth Survey).
       It underscored the need to give priority to restoring sound budgets and fiscal
       sustainability, reducing unemployment through labour market reforms and making
       new efforts to enhance growth. It requested Member States to translate these priorities
       into concrete measures to be included in their Stability or Convergence Programmes
       and National Reform Programmes.
   (5) On 25 March 2011, the European Council also invited the Member States participating
       in the Euro Plus Pact to present their commitments on time for their inclusion in their
       Stability or Convergence Programmes and their National Reform Programmes.
   (6) On 29 April 2011, Estonia submitted its 2011 Stability Programme covering the period
       2011-2015 and its 2011 National Reform Programme. In order to take account of the
       interlinkages, the two programmes have been assessed at the same time.
   (7) Estonia was particularly hard-hit by the global financial crisis, which amplified the
       reversal of the domestic real estate and consumption boom. The cumulative loss of
       GDP reached 19% in 2008-09 and the unemployment rate increase almost four fold to
       16.8% by 2010. However, the economy has bounced back quickly and the real GDP
       growth is expected to accelerate in the coming years. The recovery has been driven
       mainly by exports, but domestic demand is gaining ground mostly through strong
       investment. The improved growth outlook has provided a positive impetus to the
       labour market. Employment rate has risen markedly recently, although long-term
       unemployment remains high. While inflation accelerated compared to last year, it is
       expected to moderate in line with developments in the global commodity prices.
   (8) Based on the assessment of the Stability Programme pursuant to Council Regulation
       (EC) No 1466/97, the Council is of the opinion that the macroeconomic scenario
       underpinning the budgetary projections is plausible. The medium-term budgetary
       strategy of the programme is to achieve the medium-term objective, defined as
       structural balance, by 2013, and to maintain it throughout the rest of the programme
       period, by aiming at structural surpluses in 2013 and beyond. The headline general
       government budgetary position is projected to reach surplus by 2013, while in the
       short term the headline deficit is expected to deteriorate somewhat due to the one-off
       impact of environmental investments on carbon credits. The budgetary adjustment of
       the programme relies on holding back growth in government consumption
       expenditure. The programme provides some information regarding measures to reach
       the targeted position and the previous track record of meeting the fiscal targets
       mitigates the risk of missing them in the coming years. In particular, the envisaged
       reforms seek efficiency gains in several areas, such as education and active labour
       market policies. Risks to the budgetary targets thus appear to be broadly balanced.
       Nevertheless, it will be important for the upcoming budgets to provide the key details
       of measures to further enhance the efficiency of public spending, thus underpinning
       the implementation of the Stability Programme.
EN                                             3                                               EN
 ---pagebreak---    (9)  Long-term unemployment remains high and unemployment rates across regions have
        been rather diverging and persistent. Despite considerable increases since 2009,
        financing of active labour market policies remains one of the lowest in the EU, and
        results in a low share of the unemployed receiving active support. The Estonian labour
        market is relatively flexible, reinforced by the decision to postpone increases in the
        unemployment insurance benefit coverage in the Labour Law package to 2013.
        Despite this flexibility, Estonia has a relatively high labour tax wedge, which could
        have negative consequences for labour supply and demand. This problem is
        particularly acute in view of the high unemployment rate of the young and the low-
        skilled, who are exposed to a risk of poverty. Reforms envisaged to reduce social
        insurance contributions address the right issues, but need to take place while
        strengthening the budgetary position. There is potential for efficiency gains through a
        stricter means testing to better target other benefits.
   (10) Estonia’s resource intensity is among the highest in the EU. This is partly the result of
        a production structure concentrated on energy-intensive sectors and industries.
        Another determinant is the low energy efficiency performance at sectoral level. In its
        NRP, Estonia indicates a national energy savings target of 9% in 2016 compared to
        projections (16% by 2020 in the NRP). However, this does not cover major sectors
        and areas of savings potential, such as buildings and transport. Besides, there is little
        information on how and when measures will be implemented and their expected
        results. Hence, improving energy efficiency has further potential. Increasing energy
        efficiency is likely to have a positive impact on the environment and on the security of
        energy supply, but also to reduce inflationary pressures and improve cost
        competitiveness.
   (11) Notwithstanding the overall high share of people with tertiary education, further
        reform of the education system at all levels could help address skill gaps, a large
        number of schools and tertiary education institutions, and a lack of focus in
        professional education resulting in the high share of people with no professional
        qualification (32% in 2009). Given current demographic trends, improving the quality
        of human capital is important for raising potential growth in the medium term. In
        particular, ensuring that tertiary education is aimed at fields of key importance to the
        economy (e.g. engineering) could support the ongoing rebalancing towards tradable
        sectors. Implementing the education reform would also contribute to improving public
        sector efficiency, as the current system of managing education is too fragmented at the
        local level, leading to both inefficient subsidies and low-quality services.
   (12) Estonia has made a number of commitments under the Euro Plus Pact4. These contain
        measures to address public finance sustainability, employment, and competitiveness.
        On the fiscal side, the Pact commits to achieve budget balance by 2013 and a surplus
        in 2014; to include a public sector budget balance requirement in the state budget base
        law; as well as first steps to reform special pension schemes. In order to promote
        employment, some tax incentives are envisaged. For competitiveness, measures focus
        on innovation, higher education, and public service reform. The Pact commitments
        reflect the agenda presented in the National Reform Programme. The objectives set out
        in the Pact would benefit from further measures to strengthen labour market policies,
   4
        More details on the commitments made under the Euro Plus Pact can be found in SEC(2011) 715.
EN                                                 4                                                 EN
 ---pagebreak---          as well as addressing resource efficiency and the energy market. The Euro Plus Pact
         commitments have been assessed and taken into account in the recommendations.
   (13)  The Commission has assessed the Stability Programme and National Reform
         Programme, and the Euro Plus Pact commitments5. It has taken into account not only
         their relevance for sustainable fiscal and socio-economic policy in Estonia but also
         their conformity with EU rules and guidance, given the need to reinforce the overall
         economic governance of the European Union by providing EU level input into future
         national decisions. It considers that while measures to reach the targeted budgetary
         position would have to be specified in forthcoming budgets, the track record of the
         Estonian authorities mitigates the risk of missing the fiscal targets. Further steps
         should be taken to strengthen labour market policies and provide better incentives to
         work, to enhance human capital through a large scale education reform as well as
         addressing resource efficiency and the energy market.
   (14)  In light of this assessment, the Council has examined the 2011 Stability Programme of
         Estonia and its opinion6 is reflected in particular in its recommendation under (1) set
         out below. Taking into account the European Council conclusions of 25 March 2011,
         the Council has examined the National Reform Programme of Estonia,
   HEREBY RECOMMENDS that Estonia should take action within the 2011-2012 period to:
   (1)     Achieve structural surplus by 2013 at the latest, while limiting deficit in 2012 to at
           most 2.1% of GDP in 2012, keeping tight control over expenditure and enhancing the
           efficiency of public spending.
   (2)     Take steps to support labour demand, by reducing the tax and social security burden
           in a budgetary neutral way, especially for low and medium-income earners. Improve
           the effectiveness of active labour market policies by targeting measures on young
           people and the long-term unemployed, especially in areas of high unemployment, in
           order to reduce the risk of poverty.
   (3)     Ensure implementation of planned incentives to reduce energy intensity and improve
           the energy efficiency of the economy, targeted on the buildings and transportation
           sectors, including by ensuring better market functioning.
   (4)     While implementing the education system reform, give priority to measures
           improving the quality and availability of pre-school and professional education, and
           strengthen the system of professional qualifications. Focus education outcomes more
           on labour market needs, and provide opportunities for low-skilled workers to take
           part in life-long learning.
   Done at Brussels,
                                                     For the Council
                                                     The President
   5
         SEC(2011) 715.
   6
         Foreseen in Article 5(3) of Council Regulation (EC) No 1466/97.
EN                                                     5                                          EN


Avis juridique important

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31961Y0722(01)

/* Commission Recommendation to the Member States on the application of Regulation No 11 concerning the abolition of discrimination in transport rates and conditions, in implementation of Article 79(3) of the Treaty */

Official Journal 050 , 22/07/1961 P. 0975 - 0978 Spanish special edition: Chapter 07 Volume 1 P. 0039  Portuguese special edition Chapter 07 Volume 1 P. 0039

 /* There is no English version of this document available since it was not included in the English Special Edition. dagresptnoen73 */


title: RECOMMENDATION FOR A COUNCIL REGULATION, concluding an Agreement between the European Economic Community and the Portuguese Republic on the voluntary restraint arrangements for Portuguese exports of tomato preserves for 1976 (submitted to the Council by the Commission)

text:
ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (75) 626
Vol. 1975/0236
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak--- COMMISSION OF THE EtlROPEAN COMMUNITIES
                                                   COM(75 ) 626 Final
                                                                             \
                           /              •
                                                   Brussels , , 3 December 1975
                    RECOMMENDATION FOR A COUNCIL REGULATION ,
       concluding an Agreement "between the European Economic Community
    and the Portuguese Republic on the voluntary restraint arrangements
             for Portuguese exports of tomato preserves for 1976
                 ( submitted to the Council by the Commission )
COK(75 ) 626 Final
 ---pagebreak---                    EXPLANATORY MEMOHAÎTDtTM
The Common importation z*ules for preserved tomatoes fixing a
minimum price in respect of third, countries entered into force
on 1 September 1975 •  In order to guarantee comparable
advantages to Portugal , the Community has already adopted a
Regulation (No 2148/75 of 14 September 1975 ) which lays down
that the 3($ tariff reduction shall be maintained in respect
of Portugal subject to the continued observance by that
country of the voluntary restraint arrangements .
The purpose of the exchange of letters annexed to the draft
Regulation is to confirm , for 1976f the voluntary restraint
volume agreed with Portugal for the current year .
 ---pagebreak---                                RECOMMENDATTON FOR
                              A COUÎICTL REGULATION
     concluding an Agreement between the European Economic Community and
     the Portuguese Republic on the voluntary restraint arrangements for
                Portuguese exports of tomato preserves for 1976
THE COUNCIL OP THE EUHOPEAN COMKUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular Article 113 thereof ;
Having regard to the recommendation from the Commission ;
Whereas the Agreement in the form of an exchange of letters relating to
Article 3(2 ) of Protocol No 8 to the Agreement between the European Economic
Community and the Portuguese Republic signed in Brussels on 22 July 1972
should be concluded .
HAS ADOFTED THIS REGULATION :
 ---pagebreak---                             Article 1
The Agreement in the form of an exchange of letters relating to Article 3
of Protocol No 8 to the Agreement between the European Economic Community
and the Portuguese Republic is concluded on behalf of the Community .   .
The text of the letters is annexed to this Regulation .
                            Article 2
The President of the Council is heretry authorized to designate the person
empowered to sign the Agreement in the form of an exchange of letters . referred
to in Article 1 , and to confer on him the powers he requires to enter into ,
an undertaking on behalf of the Community .
                            Article 3
This Regulation shall enter into force on the day following its publication
in the Official Journal of the European Communities .
                                                                          v
This Regulation is binding in its; entirety and directly applicable in all
Member States .
Done at                 '                             For the Council
                                                      The Président
 ---pagebreak---                          - 3 -
                  RECOMMENDATION FOR
                 A COUNCIL REGULATION
CONCLUDING AN AGREEMENT BETWEEN THE EUROPEAN ECONOMIC
COMMUNITY AND THE PORTUGUESE REPUBLIC ON THE VOLUNTARY
RESTRAINT ARRANGEMENTS FOR PORTUGUESE EXPORTS OF TOMATO
                 PRESERVES FOR 1976
 ---pagebreak---                          LETTER NO 1
                                      !
                                           Brussels ,
 I have the honour to refer to the provisions of Article 3 of
 Protocol No 8 to the Agreement "between the European Economic Community and
 the Portuguese Republio signed on 22 July 1972 , as well as to the
 exchange of letters of                      1975 *
 I have the honour to inform you that for 1976 the Community is
 ready to renew the agreed volume for the current year .
■ \
 Under these conditions the Portuguese Government undertakes to adopt
 all necessary measures in order that the quantities of tomato
 concentrates of subheading No 20.02 ex C supplied to the Community
 in 1976 do not exceed 90 000 tonnes , comprising 28 000 tonnes for
 the Community as originally constituted and a total of 62 000 tonnes
 for Denmark , Ireland . and the United Kingdom .
 I should he grateful if you would kindly confirm the agreement of
 your Government with the contends of this letter .
 Please accept ,                   , the assurance of my highest
 considération .
                                                On "behalf of the Council
                                                of the European Communities
 ---pagebreak---                             - 5 -
                LETTER NO 2
                                    Brussels ,
 I have the honour to acknowledge receipt of your letter to
today worded as follows :
"   I have the honour to refer to the provisions of Article 3 of
Protocol Ho 8 to the Agreement "between the European Community
and the Portuguese Republio signed on 22 July 1972 , as well as to
the exchange of letters of              1975 *
I have the honour to inform you that for 1976 the Community
is ready to renew the agreed volume for the current year .
Under these conditions the Portuguese Government undertakes to
adopt all necessary measures in order that the quantities of tomato
concentrates of subheading Ho 20.02 ex C supplied to the Community
in 1976 do not exceed 90 OOCTtonnes , comprising 28 000 tonnes for
the Community as originally constituted and a total of 62 000 tonnes
for Denmark , Ireland and the United Kingdom .
I should "be grateful if you would kindly confirm the agreement of
your Government with the contents of this letter .
Please accept ,                  , the assurances of my highest
considération . "
                                 On behalf of the Government
                                 of the Portuguese Republic


Avis juridique important

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31987H0525

87/525/EEC: Commission Recommendation of 8 October 1987 to the Portuguese Republic concerning the adjustment of the State monopoly of a commercial character in alcohol vis-à-vis the other Member States (Only the Portuguese text is authentic)

Official Journal L 306 , 28/10/1987 P. 0032 - 0034

*****COMMISSION  RECOMMENDATION  of 8 October 1987  to the Portuguese Republic concerning the adjustment of the State monopoly of a commercial character in alcohol vis-à-vis the other Member States  (Only the Portuguese text is authentic)  (87/525/EEC)  I  Article 208 of the Act of Accession states that, without prejudice to paragraph 2 of the same Article, Portugal shall, from 1 January 1986, progressively adjust State monopolies of a commercial character within the meaning of Article 37 (1) of the EEC Treaty so as to ensure that by 1 January 1993 no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States.  In addition to the products specified in Article 208 (2), in respect of which provision was made for specific adjustment measures, the following products are subject in Portugal to monopolies within the meaning of Article 37 of the EEC Treaty:  - ethyl alcohol of agricultural origin (agricultural product listed in Annex II to the EEC Treaty, as amended by Regulation No 7a adding certain products to the list in Annex II to the Treaty establishing the European Economic Community (1)),  - ethyl alcohol of non-agricultural origin falling within CCT heading Nos ex 22.08 A and B and ex 22.09 A (Nimexe code code 22.08-10 and 22.08-30),  - wine spirits for use in the making of port wine falling within CCT heading No 22.09 C V a) and b) (Nimexe code 22.09-81 and 22.09-91).  The Portuguese State conferred on itself the exclusive right to import and market the abovementioned products on its national territory. The monopoly in ethyl alcohol is administered by the Administração-geral do açúcar e do álcool (AGA), and that in spirits for use in the making of port wine by the Instituto do Vinho do Porto (IVP).  The second subparagraph of Article 208 (1) of the Act further stipulates that the present Member States shall have equivalent obligations in relation to Portugal. In the other Member States, however, none of the products is or is any longer subject to a monopoly within the meaning of Article 37 (1) of the EEC Treaty.  The third subparagraph of Article 208 (1) of the Act of Accession provides that the Commission shall make recommendations to Portugal as to the manner in which, and the timetable according to which, the adjustment provided for in the first paragraph must be carried out.  II  Since no specific mention is made of the Portuguese monopoly in alcohol - in contrast to the monopoly in petroleum products, in respect of which detailed rules are laid down in Article 208 (2) of the Act of Accession - the Commission believes that the timetable for the gradual removal of existing quantitative restrictions in this area should be based on the criteria provided for in Article 33 of the EEC Treaty. Article 33 stipulates for the original Member States a transitional period of 12 years and the setting of an initial quota amounting to not less than 3 % of national production on the understanding that the initial quota must not be lower than any bilateral quotas open to any other Member States on the entry into force of the Treaty. The quota was to be raised to 5 % at the end of the third year. Thereafter, it was to be increased by not less than 15 % annually. At the end of the tenth year, each quota was to be equal to not less than 20 % of national production.  III  The Commission considers that the provisions of Article 208 (1) of the Act of Accession need to be adapted in setting the volume of the initial quota and its annual rate of increase for Portugal.  The Commission considers that account must be taken of the length of the transitional period, expiring on 31 December 1992, set for Portugal in Article 208 (1), and of the time which has already elapsed.  As regard the initial quotas, account should be taken - by analogy with the provisions of Article 33 of the EEC Treaty - of any bilateral quotas open to any other Member States. In accordance with the objectives of the Act of Accession, the scope for trade existing before the entry into force of the Act must be at least maintained. The initial quota must therefore be equivalent to the amount of bilateral trade. If there are no bilateral quotas, the initial quota should be set at 3 % of national production, where national production is equal to or - in the event of exports - greater than domestic consumption.  In setting the initial quotas for the three products covered by this recommendation, it would therefore seem necessary to take account of production and imports. Since the situation is not the same for each of the three products, they must be treated separately.  IV  1. In the case of ethyl alcohol of agricultural origin, national production is roughly equivalent to national consumption; it is for this reason that only small quantities have previously been imported. The setting of an initial quota by reference to national production therefore appears to meet the abovementioned objectives of the Act of Accession.  However, the Commission considers that account must also be taken of the provisions of Article 37 (4) of the EEC Treaty. Any existing rules designed to make it easier to dispose of agricultural products or obtain for them the best return should therefore not be called into question so as to ensure equivalent safeguards for the employment and standard of living of the producers concerned, account being taken of possible adjustments and necessary specialization. Nevertheless, any such rules must be brought fully into line with the requirements of Article 37 (1) before the end of the transitional period.  In view of the length of the transitional period and of the time which has already elapsed, and in view of the objectives referred to above, the Commission considers that a quota for 1987 amounting to 6 % of national production of ethyl alcohol of agricultural origin and an annual 20 % increase in the quota are fair and reasonable.  2. Ethyl alcohol of non-agricultural origin is not manufactured in Portugal. It is not used in certain sectors, such as the manufacture of beverages. Consequently, the AGA imports only small quantities. The initial quota volume can therefore be set only by reference to the imports actually made.  In view of the part of the transitional period which has already elapsed, the Commission considers that the initial quota for 1987 for ethyl alcohol of non-agricultural origin from the other Member States should amount to not less than 40 % of the highest annual level of imports recorded in the period from 1982 to 1986 inclusive.  3. In the case of wine spirits for use in the making of port wine, by contrast, imports account for a substantial proportion of national domestic consumption, and indeed tend to be well in excess of national production. The IVP is obliged to import wine spirits, being responsible for ensuring that the Portuguese market is properly supplied.  The situation differs fundamentally from the situation regarding ethyl alcohol of agricultural origin, where national production is sufficient to meet the requirements of the market. In the latter case, the opening of an import quota is likely to have an immediate effect on the disposal of national production.  By contrast, the only effect which an import quota would have, in the case of a monopoly which itself imports considerable quantities, would perhaps be to reduce the imports the monopoly was obliged to make, though the monopoly would remain free to import whatever quantities it wished to distribute on the national market. The monopoly would be in a favourable position where it wished to import large quantities, since its purchase tenders would be for amounts that would be attractive to the major producers.  The Commission accordingly considers that, in setting a quota for such products, reference must be made to the imports carried out by the Portuguese monopoly.  The Commission is nevertheless of the opinion that Portugal should not be required to set the initial quota volume at a level corresponding to the total amount of actual imports in previous years. This could reduce considerably the monopoly's room for manoeuvre and could jeopardize its task of ensuring the disposal of national production; such a situation would not appear to be in line with the objective laid down in Article 208, which does not call for the abrupt dismantlement of the monopoly at the beginning of the transitional period, but merely for its gradual adjustment during the period.  It would seem to the Commission, however, in a situation where the monopoly's imports are well in excess of national production, as was the case in 1986, and in view of the length of the transitional period, that the setting of a quota for the second year amounting to 25 % of imports in 1985 is fair. Article 37 (4) cannot be invoked in this instance, since wine spirits are not agricultural products within the meaning ot the EEC Treaty.  However, account should be taken of the effect of all the provisions of the Accession Treaty and in particular those which set the transitional periods for the application of the common agricultural policy to Portugal.  V  For these reasons, and subjects to the position the Commission may subsequently adopt in the light of the results of applying the recommendation, the Commission hereby recommends, pursuant to the third subparagraph of Article 208 (1) of the Act of Accession, that the Portuguese Republic should:  1. - open, for ethyl alcohol of agricultural origin, subject in Portugal to a State monopoly of a commercial character, a quota for the remaining period of 1987 amounting to not less than 6 % of the relevant national production in 1986,  - open, for ethyl alcohol of non-agricultural origin, subject in Portugal to a State monopoly of a commercial character, a quota for the remaining period 1987 amounting to not less than 40 % of the highest annual level of imports recorded in the period 1982 to 1986 inclusive, - open, for wine spirits for use in making port wine, subject in Portugal to a State monopoly of a commercial character, a quota for the remaining period of 1987 amounting to not less than 25 % of imports made in 1985,  - increase the 1987 quotas by 20 % in 1988,  - increase the previous year's quotas by 20 % in the years thereafter.  It is understood that, by 31 December 1992, all quantitative restrictions will have been removed.  The quotas should be administered in a transparent, objective and non-discriminatory manner. They should be open to any importer other than the monopolies, and the products imported under them should not be made subject to any exclusive marketing rights in Portugal.  2. - inform all interested parties through the appropriate channels, and in particular by publishing a notice to importers in the Portuguese official journal Diário da República, of the possibilities available to them under the abovementioned quotas of obtaining supplies of the products referred to above from the other Member States.  Done at Brussels, 8 October 1987.  For the Commission  Peter SUTHERLAND  Member of the Commission  (1) OJ No 7, 30. 1. 1961, p. 71/61.