7-10 February th Conference of Commonwealth Statisticians Adapting the European Statistical System to meet the Bubbles Challenge James Whitworth Head, International Statistical Co-operation Eurostat European Commission

7-10 February th Conference of Commonwealth Statisticians Crises and bubbles Keeping track of housing bubbles Macroeconomic surveillance GDP and beyond Eurostat vision for the production of statistics

7-10 February th Conference of Commonwealth Statisticians Crises and bubbles Global Financial Crisis and Sovereign Debt Crisis – financial imbalances Ongoing debates, e.g. UN Statistical Commission High Level Seminar 2009, UN-Eurostat workshops in Ottawa, Scheveningen, Moscow ( ) Dont shoot the statisticians! BUT we must adapt our systems, making them more responsive and gear them towards making bubble tracking easier (e.g. rapid estimates, housing prices)

7-10 February th Conference of Commonwealth Statisticians Tracking Housing Bubbles (1) Little activity from official statisticians (Main sources: building societies, press) Not difficult to see why. Many problems: Valuation Coverage of regions Types of dwelling Timing Land costs Amenities Quality issues

7-10 February th Conference of Commonwealth Statisticians Tracking Housing Bubbles (2) First pilot work 2000 – 5 countries OOH component of Harmonised Index of Consumer Prices Further pilot projects in 2006 – 11 countries Co-operation with OECD and IMF Still concerned with Harmonised Index of Consumer Prices Increased urgency in 2010 Now working with 25 EU and EFTA countries, co-operation with European Central Bank, Statistics Netherlands Publication of handbook and technical manual, December 2010 (on Eurostat web site) – comments welcome

7-10 February th Conference of Commonwealth Statisticians Tracking Housing Bubbles (3) Technical Manual on Owner Occupied Housing Draft published by Eurostat in February 2010 Link: y/owner_occupied_housing_hpi/owner_occupied_housing y/owner_occupied_housing_hpi/owner_occupied_housing Index of Owner Occupied Housing Net Acquisitions Approach (new buildings, extensions, improvements) Excludes land Used in Consumer Price Index House Price Index Independent indicator in its own right All market transactions of newly built and existing dwellings Includes land

7-10 February th Conference of Commonwealth Statisticians Tracking Housing Bubbles (4) Experimental House Price Index

7-10 February th Conference of Commonwealth Statisticians Macroeconomic Surveillance (1) Previous work: qualification criteria for Euro entry (inflation Debt/deficit, etc.) => Excessive debt procedures Economic Governance package – September 2010 Alert Mechanism through a scoreboard Preventative surveillance based on discussions and in- depth reviews Excessive Imbalance Procedure Enforcement mechanism for Euro area members

7-10 February th Conference of Commonwealth Statisticians Macroeconomic Surveillance (2) Eurostats new powers Are public finance data flows appropriate to ESA (SNA)? Is the data exhaustive? Is the quarterly data timely and consistent? How do member states control this data? How reliable are the data flows between public entities and the NSO? Are the registries of entities controlled by general government complete? Is the Code of Practice being implemented properly?

7-10 February th Conference of Commonwealth Statisticians GDP and Beyond (1) Why? Renewed EU Sustainable Development strategy in 2006 OECD global project on measuring societies (Istanbul declaration in June 2007) Beyond GDP conference in Nov 2007 (GDP and Beyond EC Communication in Aug 2009) Commission on the measurement of economic performance and social progress (Stiglitz-Sen- Fitoussi report in Sept 2009) Europe 2020 strategy (first half 2010)

7-10 February th Conference of Commonwealth Statisticians GDP and Beyond (2) Five key actions 1.Complementing GDP with environmental and social indicators A comprehensive environmental index Quality of life and well-being 2.Near real time information for decision-making More timely environmental indicators More timely social indicators 3.More accurate reporting on distribution and inequalities 4.Developing a European Sustainable Development Scoreboard 5.Extending National Accounts to environmental and social issues Fromto

7-10 February th Conference of Commonwealth Statisticians Eurostat vision for production statistics (1) Classic way of collecting data in Europe is based in the 1950s BUT new developments: New requirements: needs grow Faster figures (e.g. bubbles) Need to simplify, reduce regulation ICT tools Need to reuse data sources Cross-cutting domains (e.g. GDP & beyond)

7-10 February th Conference of Commonwealth Statisticians Domain 1Domain 2 …Domain N … … Data collection Data processing Transmission to Eurostat EU data compilation … … … … Domain 1 Domain 2 Domain N … Member State 1 … … Member State 27 Domain 1Domain 2 … Member State 2

7-10 February th Conference of Commonwealth Statisticians

7-10 February th Conference of Commonwealth Statisticians Common infrastructure Entry EU data compilation Primary surveys Administrative data repositories Other external sources Processing

7-10 February th Conference of Commonwealth Statisticians Eurostat Vision (2) Vision Infrastructure Projects (VIPs) Modernisation of European Enterprise and Trade Statistics (MEETS) Eurogroups Register Census hub 2011 Common validation tools Data linking Secure and easy access to confidential data

7-10 February th Conference of Commonwealth Statisticians Eurostat Vision (2) – case study Typical production company: 200 employees Before 2 annual surveys, Structural Business Statistics Energy Monthly intra-EU trade Monthly reports for short term statistics Monthly production Some duplication After Administrative data (registers) Company accounts Monthly survey

7-10 February th Conference of Commonwealth Statisticians Thank you James Whitworth Head, International Statistical Co-operation, Eurostat, European Commission