More Scrutiny Powers for EU

The European Commission has proposed a Regulation designed to better ensure the quality of statistical data on the excessive deficit procedure (EDP). This proposal comes in response to recent developments regarding, in particular, the Greek government deficit and its handling of debt statistics. The Commission states in the proposal that “the Greek case” has demonstrated that the current system for fiscal statistics is not able to properly mitigate the risk of incorrect or inaccurate data being sent to the Commission. Without action to address this weakness, the Commission says that the reliability of statistics could continue to be compromised.

Fiscal statistics

Eurostat, the Commission’s statistical authority, is in charge of supervising the quality of the fiscal data the Commission receives from Member States. The basis for this EU fiscal surveillance system is specified in the Treaties and in EU legislation. The Commission says that the quality of data used for fiscal statistics is often dependent to the success with which Member States have implemented relevant legal acts, such as Council Regulation (EC) No 2223/961 (ESA 95), and Council Regulation (EC) No 479/2009, which stipulates that Member States must provide the Commission with statistics as promptly as possible.

Previous Policies

In 2005, the Commission amended Council Regulation (EC) No 3605/93 on the quality of EDP data. The Commission said that it wanted to increase the transparency of EDP-related statistics, and to strengthen the powers of Eurostat regarding data quality. In particular, the Commission proposed to establish "in-depth monitoring visits" in the Member States. However, the Commission says that the tools provided to it by the Council Regulation (EC) No 2103/2005 were more limited than it had initially requested. For example, Member States are not obliged to give the Commission (represented in this case by Eurostat) access to all information it requests.

Scope of the Amended Regulation

The Commission says that the purpose of this new amended Regulation is to improve the quality and reliability of government finance statistics. In order to do this, the proposal is based on a two-pillar approach:
• first, more frequent and regular statistical visits in the context of the standard EDP procedure;
• second, where a risk-based assessment identifies specific and significant problems, Eurostat can conduct additional methodological visits.
The Commission specifies in its proposal that the methodological visits will take place only in cases where there are identified substantial risks or potential problems with the quality of the data.
The Commission wants Eurostat to obtain the right to examine public accounts directly in the cases where there are substantial doubts about the reliability of the statistical data submitted by a national statistical authority.

Next Steps

In order for this proposal to become legislation, the Council will have to adopt it by unanimity after consulting the European Parliament and the European Central Bank.