Proposal for a Council Regulation amending Regulation (EC) No 3605/93 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community
C 376 E/18 EN Official Journal of the European Communities 28. 12. 1999 Proposal for a Council Regulation amending Regulation (EC) No 3605/93 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community (1999/C 376 E/02) COM(1999) 444 final - 1999/0196(CNS) (Submitted by the Commission on 13 September 1999) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European the third subparagraph of Community, and in particular Article 104(14), Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, (1) Whereas the definitions of ádeficití and ágovernmentí, áinvestmentí are laid down in the Protocol on the excessive deficit procedure annexed to the Treaty estab- lishing the European Community and in Council Regu- lation (EC) No 3605/93 of 22 November 1993 (1) by reference to the European System of Integrated Economic Accounts; whereas Council Regulation (EC) No 2223/96 of 25 June 1996 (2) replaced that system with the European System of National in the and Regional Accounts Community (hereinafter referred to as ESA 95í); instruments; whereas, (2) Whereas the definition of ágovernment debtí laid down in the Protocol on the excessive deficit procedure and in Council Regulation (EC) No 3605/93 needs to be further amplified by a reference to the classification codes of ESA 95; whereas, in the case of financial derivatives, as defined in ESA 95, there is no nominal value identical to that for other debt financial derivatives must not be included with the liabilities the making up government debt Protocol on the excessive deficit procedure; whereas for liabilities denominated in foreign currency which are subject to agreements fixing the exchange rate, this rate should be taken into account in the conversion into national currency and this approach should similarly apply to agreements rates between foreign currencies; the purposes of relating to the therefore, exchange for (3) Whereas the calculation of the ratios of government deficit to gross domestic product and of government debt to gross domestic product referred to in Article 104 of the Treaty should also be rendered coherent on the basis of ESA 95; whereas ESA 95 provides an appropriate, detailed defi- nition of gross domestic product at current market prices; (1) OJ L 332, 31. 12. 1993, p. 7. (2) OJ L 310, 30. 11. 1996, p. 1. indicator States has (4) Whereas consolidated government interest expenditure is an important for monitoring the budgetary situation in the Member States; whereas interest expen- diture is intrinsically linked to government debt; whereas government debt to be reported to the Commission by the consolidated within the Member the levels of government government debt should be made mutually consistent; whereas the methodology of ESA 95 (point 1. 58) recognises that, for certain kinds of analysis, consolidated aggregates are more significant than overall gross figures; whereas the way in which the figures on interest expenditure are to be provided to the Commission by the Member States should be clarified; to be sector; whereas interest expenditure and of (5) Whereas the definitions and classification codes of ESA 95 may be subject to revision in the context of the necessary harmonisation of national statistics or for other reasons; to its whereas revisions of ESA 95 or amendments methodology the Commission in accordance with the rules on competence and procedure laid down in the Treaty and in Council Regulation (EC) No 2223/96; the Council or decided are by (6) Whereas Article 8(2) of Council Regulation (EC) No 2223/96 stipulates that the former European System of Integrated Economic Accounts is to continue to be used for the purposes of the excessive deficit procedure during a transitional period until the reporting exercise of 1 September 1999, HAS ADOPTED THIS REGULATION: Article 1 Regulation (EC) No 3605/93 is hereby amended as follows: 1. Articles 1 and 2 are replaced by the following text: Article 1 For the purposes of 1. the Protocol on the excessive deficit procedure and of this Regulation, the terms given in the following paragraphs are defined according to the European System of National and Regional Accounts in the Community (hereinafter ESA 95ö), adopted by Council Regulation (EC) No 2223/96 of 25 June 1996. The codes in brackets refer to ESA 95. referred to as 28. 12. 1999 EN Official Journal of the European Communities C 376 E/19 the Governmentö means ôgeneral 2. governmentö (S. 13), that is ôcentral governmentö (S. 1311), ôstate governmentö (S. 1313) and ôsocial security fundsö (S. 1314), to the exclusion of commercial operations, as defined in ESA 95. ôlocal governmentö (S. 1312), sector of The exclusion of commercial operations means that the sector of ôgeneral governmentö(S. 13) comprises only institu- tional units producing non-market services as their main activity. deficit Government (surplus)ö means the net 3. borrowing (net ôgeneral (B. 9) of governmentö (S. 13), as defined in ESA 95. The interest comprised in the government deficit is the interest (D. 41), as defined in ESA 95. the sector of lending) Government 4. capital governmentö (S. 13), as defined in ESA 95. investmentö means of formation (P. 51) the the gross of fixed ôgeneral sector 5. Government debtö means the total gross debt at nominal value outstanding at the end of the year of the sector of ôgeneral governmentö (S. 13), with the exception of those liabilities the corresponding financial assets of which are held by the sector of ôgeneral governmentö (S. 13). Government debt is constituted by the liabilities of general in the following categories: currency and government deposits than shares, excluding financial derivatives (AF. 33) and loans (AF. 4), as defined in ESA 95. securities other (AF. 2); shall be Liabilities denominated in foreign currencies converted to the national currency on the basis of the representative market exchange rate prevailing on the last working day of each year, except for those liabilities where the covered through contractual agreements. These liabilities shall be converted into national currency at the rate agreed upon in these contracts. foreign exchange rate risk is Article 2 For the purposes of the Protocol on the excessive deficit procedure and of this Regulation, gross domestic product means gross domestic product at current market prices (GDP mp) (B. 1*g), as defined in ESA 95. í 2. In Article 4(2) the codes for subsectors S61, S62 and S63 given at the end of the second subparagraph are replaced by the codes S. 1311, S. 1312, S. 1313 and S. 1314. 3. At the end of Article 5, the words áand interest expenditureí expenditure replaced by the words áand interest are (consolidated)í. 4. Article 7 is replaced by the following text: Article 7 In the event of a revision of ESA 95 or of an amendment to its methodology to be decided on by the Council or the Commission in accordance with the rules on competence and procedure laid down in the Treaty and in Regulation (EC) No 2223/96, the Commission shall introduce the new references to ESA 95 into Articles 1, 2 and 4. í The nominal value of a liability outstanding at the end of the year is the face value. Article 2 The nominal value of an index-linked liability corresponds to its face value adjusted by the index-related increase in the value of the principal accrued to the end of the year. This Regulation shall enter into force on 1 January 2000. This Regulation shall be binding in its entirety and directly applicable in all Member States