ACT: Council Regulation 701/2006/EC laying down detailed rules for the implementation of Regulation 2494/95/EC as regards the temporal coverage of price collection in the harmonised index of consumer prices.

CONTENT: this Regulation seeks to establish minimum standards for price collection periods in order to improve the comparability, reliability and relevance of HICPs.

Representation: The HICP is a sample statistic, which shall represent the average change in prices between the calendar month of the current index and the period to which it is compared.

Minimum standards for price collection: Price collection shall take place across at least a one working week period at, or near, the middle of the calendar month to which the index pertains. In cases where products typically show sharp and irregular price changes within the same month, price collection will take place over a period of more than one working week. The rules apply, in particular, to energy products and fresh food (such as fruit and vegetables).

The Regulation’s provisions will be implemented in December 2007, at the latest, and take effect with the index for January 2008.

ENTRY INTO FORCE: 29 May 2006.

PURPOSE: to lay down detailed rules for the implementation of Council Regulation 2494/95/EC as regards the common index reference period for the harmonised index of consumer prices, and amending Regulation 2214/96/EC.

LEGISLATIVE ACT: Commission Regulation 1708/2005/EC.

CONTENT: The aim of this Regulation is to establish common rules for determining certain index reference periods in order to ensure that the resulting Harmonised Indices of Consumer Prices (HICPs) are comparable and relevant.

There shall be three types of common reference or base periods used in the construction of HICPs which may be chosen independently of each other, namely:

(a) The ‘weighting reference period’ is as defined in Article 2 of Commission Regulation 2454/97/EC.

(b) The ‘price reference period’ is the period from which the current price change is measured and for which prices are used as denominators in the index calculations; it refers to the prices used for the volume valuation in the HICP weights.

(c) The ‘index reference period’ is the period for which the index is set to 100 index points.

The HICP common index reference period shall be set at 2005 = 100. The full time series of the HICP all-item indices and subindices shall be rescaled to another common index reference period when deemed appropriate. Upon updates, the full time series of all HICPs and HICP sub-indices shall be rescaled to the common index reference period. The rescaling to the new index reference period shall take effect with the index for the January of the following calendar year.

The Commission (Eurostat) may update the index reference period after consulting the Statistical Programme Committee established by Decision 89/382/EEC, Euratom. Any additional COICOP/HICP sub-indices to be integrated within the HICP shall be linked in December at the level of 100 index points and take effect with the index for the following January.

ENTRY INTO FORCE: 09/11/2005.

According to Mrs LULLING (EPP, L), in order to measure the inflationist temperature it was essential to create a unique ‘thermometer’ by way of harmonised consumer price indices. This Regulation was therefore a framework law within which detailed rules could be laid down in the form of a regulation by the Commission. In spite of the fact that this Regulation went outside the qualified majority procedure, for which there was the ‘modus vivendi’ with the Council and the Commission, Parliament wanted to be more closely involved in this decision-making stage. Commissioner BRITTAN pointed out that the timetable for EMU provided for an initial stage of consumer price harmonisation in 1996. As regards the legal basis, the Commission considered that Article 213 of the Treaty was adequate and appropriate. Therefore, as Article 213 did not imply the codecision procedure provided for in ex-Article 189b, the Commission could not take over the amendments on the legal basis. The remaining six amendments could not be taken over as they were redundant or unimportant in relation to this Regulation.

The Council noted that there was broad agreement on the draft, although certain aspects had yet to be finalised to enable the Regulation to be adopted at its next meeting, after receipt of the European Parliament’s opinion. The Regulation is needed in order to assess, on a uniform statistical basis, the progress made by Member States in fulfilling their obligations regarding the achievement of a high degree of price stability, which is an important criterion in the process of achieving EMU.

The Opinion endorsed the proposal for a regulation but pointed out that the statistical data omitted in the first stage should be included in the second stage (compilation of the harmonised consumer price index) so that the convergence criteria provided for in the EU Treaty could be assessed fairly. As regards the monetary union consumer price index, the ESC felt that the inclusion of a larger basket of products would enhance its value as a statistical instrument.