Harmonisation of the compilation of GNP

The creation of an additional own resource for the Communities, based on the gross national product at market prices ("GNPmp") of the Member States has made it necessary to make this aggregate more comparable and reliable. Both the definition and the method of calculating GNP must be harmonised. This will make it easier to analyse comparable data in the context of the internal market.

ACT

Council Directive 89/130/EEC on the harmonization of the compilation of gross national product at market prices [See amending acts]

SUMMARY

Firstly, the Directive defines GNPmp in accordance with the current European System of Integrated Economic Accounts (ESA). GNPmp is calculated by adding to gross domestic product at market prices (GDPmp, ESA code: N 1) the compensation of employees (R 10) and the property and entrepreneurial income (R 40) received from the rest of the world less the corresponding flows paid to the rest of the world. GDPmp represents the final result of productive activity by resident production units. Referring to the ESA, GDPmp may be presented in three ways:

• from the output angle: GDPmp (N 1) is the difference between output of goods and services (P 10) and intermediate consumption (P 20) plus VAT on products (R 21) and net taxes linked to imports (excluding value added tax (VAT)) (R 29);
• from the expenditure angle: GDPmp (N 1) is the sum of final consumption (P 30) on the economic territory by households and private non-profit institutions and general government, gross fixed capital formation (P 41), change in stocks (P 42), and the difference between exports (P 50) and imports (P 60);
• from the income angle: GDPmp (N 1) is the sum of compensation of employees (R 10), gross operating surplus of the economy (N 2), and taxes linked to production and imports (R 20) less subsidies (R 30).

Member States establish GNPmp in accordance with the definition given in the Directive. Before 1 October each year, they provide the Commission, in the context of national accounting procedures, with figures for the GNPmp aggregate and its components according to the ESA definitions referred to above. Member States also supply the information necessary to show how the aggregate was found. The figures cover the preceding year and any changes made to the figures for previous financial years. The Commission is assisted by a committee.

The Agreement on the European Economic Area amends the Directive. It states that Liechtenstein is exempt from providing the data required by the Directive and that Austria, Finland, Iceland, Norway and Switzerland will provide the data as from 1995 at the latest.

Background

In practice, the Directive has been replaced de facto but not de jure since 2002 by Council Regulation (EC, Euratom) No 1287/2003 of 15 July 2003 on the harmonisation of gross national income at market prices (GNI Regulation).

RELATED ACTS

Implementing measures:

Decision 93/475/EEC, Euratom [Official Journal L 224 of 3.9.1993]

Commission Decision of 22 July 1993 defining production and import subsidies for the purpose of the implementation of Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices.

Decision 93/570/EC, Euratom [Official Journal L 276 of 9.11.1993]

Commission Decision of 4 October 1993 defining the distinction between 'other taxes linked to production' and 'intermediate consumption' for the purpose of the implementation of Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices.

Decision 94/168/EC [Official Journal L 77 of 19.3.1994]

Commission Decision of 22 February 1994 on measures to be taken for the implementation of Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices. The purpose of this Decision is to improve the exhaustiveness of GDPmp as a major component of the GNPmp of the Member States as regards economic activity within the production boundary of the European system of integrated economic accounts ("ESA"). This includes economic activity which is lawful in itself but which is not carried on in conformity with tax and social security regulations. Economic activity which is unlawful as such according to national legislation is outside the scope of the measures provided for by this Decision.

Decision 95/309/EC, Euratom [Official Journal L 186 of 5.8.1995]

Commission Decision of 18 July 1995 specifying the principles for estimating dwelling services for the purpose of implementing Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices.

Decision 97/157/EC, Euratom [Official Journal L 60 of 1.3.1997]

Commission Decision of 12 February 1997 defining the treatment of the income of undertakings for collective investment for the purpose of the implementation of Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices.

Decision 97/619/EC, Euratom [Official Journal L 252 of 16.9.1997]

Commission Decision of 3 September 1997 on changes to the Member States' GNP estimates for the purpose of implementing Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices.

Decision 98/501/EC, Euratom [Official Journal L 225 of 12.8.1998]

Commission Decision of 24 July 1998 concerning certain specific transactions identified within the work on the protocol of the Excessive Deficit Procedure, for the application of Article 1 of Council Directive 89/130/EEC, Euratom on the harmonisation of the compilation of gross national product at market prices.

Decision 1999/622/EC, Euratom [Official Journal L 245 of 17.9.1999]

Commission Decision of 8 September 1999 on the treatment of repayments of VAT to non-taxable units and to taxable units for their exempt activities, for the purpose of implementing Council Directive 89/130/EEC, Euratom on the harmonisation of the compilation of gross national product at market prices.

Commission Regulation (EC) No 109/2005 of 24 January 2005 on the definition of the economic territory of Member States for the purposes of Council Regulation (EC, Euratom) No 1287/2003 on the harmonisation of gross national income at market prices [Official Journal L 021 of 25.01.2005].

See also

For further information, visit the DG Budget website .

Last updated: 02.01.2006