WRITTEN QUESTION E-2231/99

by Christopher Huhne (ELDR) to the Commission

(1 December 1999)

Subject: Estimate of the black economy

Please give estimates or a range of estimates of the size of the black economy for each of the Member States and briefly describe the methodological basis of calculation.

Answer given by Mr Solbes Mira on behalf of the Commission

(21 December 1999)

The concept of the black, hidden or underground economy is not well defined. The Commission is not directly engaged in measuring it and has no estimates of its size.

A large number of transactions and activities are in fact not recorded by administrative processes or by statistical enquiries for a wide range of reasons (including fraud, but also absence, exemptions, size thresholds). These transactions or activities are not necessarily in any sense hidden.

To ensure exhaustiveness of the data on gross national product (GNP) and other national accounts aggregates used for Community purposes (especially in determining Member States contributions to the Community budget), the Commission has worked intensively with the statistical services of the Member States for the last ten years to ensure that all activity that should be included in GNP is in fact included, regardless of whether or how it is declared to the authorities. A description of this work can be found in the report from the Commission to the Council and the Parliament the application of the Council Directive on the compilation of gross national product at market prices(1).

In the context of the European employment strategy, the Commission has issued a communication on undeclared work(2) addressing policy options in this area. In this communication, undeclared work is defined as any paid activities that are lawful as regards their nature but not declared to the public authorities, bearing in mind that differences in the regulatory systems of Member States must be taken into account.

(1) COM(96) 124 final.

(2) COM(98) 219 final.