THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 213 thereof,

Having regard to the draft Regulation submitted by the Commission,

Whereas, in order to carry out the tasks assigned to it, the Commission should be kept informed of the level and composition of labour costs and of the structure and distribution of earnings in the Member States;

Whereas the development of the Community and the operation of the internal market increase the need for comparable data on the level and composition of labour costs and on the structure and distribution of earnings, particularly as a means of analysing the progress of economic and social cohesion and for establishing reliable and relevant comparisons between the Member States and the regions of the Community;

Whereas the best method of assessing the situation as regards labour costs and earnings is to compile Community statistics using harmonised methods and definitions as has been done on earlier occasions, most recently for 1996 in the case of the level and composition of labour costs pursuant to Regulation (EC) No 23/971 and for 1995 in the case of the structure and distribution of earnings pursuant to Regulation (EC) No 2744/952;

Whereas, to reflect changes taking place in the structure of the labour force, in the distribution of earnings, and in the composition of expenditure by enterprises on wages and related employers' contributions, the statistics need to be regularly updated;

Whereas, pursuant to Regulation (EC) No 2223/963 the European System of National and Regional Accounts in the European Community (ESA-95) is the term of reference for standards, definitions and accounting practices in the Member States in order to meet the Community needs; whereas this necessitates the establishment of complete, reliable and comparable statistical sources at national and regional level; whereas the levels of breakdown to be applied to the variables are limited to what is necessary to ensure comparability with previous statistics and compatibility with national accounts requirements;

Whereas the European Central Bank (ECB) needs information on the level and composition of labour costs and on the structure and distribution of earnings in order to assess the economic development in the Member States in the context of a single European monetary policy;

Whereas statistical information in this field is available only in certain Member States and valid comparisons cannot therefore be made; whereas Community statistics should consequently be produced and the results processed on the basis of common definitions and harmonised methodologies, taking into account the standards approved by relevant international organisations;

Whereas presently not all Member States collect complete data in sections M (Education), N (Health and social work) and O (Other Community, social and personal service activities); whereas it is therefore appropriate to decide on their possible inclusion in the scope of this Regulation in the light of a report to be submitted by the Commission on the basis of pilot studies on the feasibility of collecting complete data in these sectors;

Whereas although the importance of complete data of all segments of the economy should be fully recognised, it should be carefully weighed against the reporting possibilities and the response burden in specific areas, in particular in relation to small and medium-sized enterprises (SMEs); whereas it is therefore appropriate for the Commission to carry out pilot studies on the feasibility of collecting complete data from statistical units with less than ten employees and that the Council decides on this matter in the light of a report to be submitted by the Commission, within four years of the entry into force of this Regulation; whereas the use of administrative records may be helpful in the meanwhile and should be encouraged;

Whereas, in accordance with the principle of subsidiarity, the creation of common statistical standards enabling harmonised information to be produced is a proposed action the objectives of which can, by reason of its scale or effects be better achieved by the Community; whereas these standards will be implemented in each Member State on the authority of the agencies and institutions appointed to compile Community statistics;

Whereas it seems appropriate to make provisions for exceptions for certain Member States, in order to take account of particular technical difficulties encountered by such States in the collection of certain types of information, provided that the quality of the statistical information is not seriously affected;

Whereas the production of specific Community statistics is governed by the rules set out in Council Regulation (EC) No 322/97 of 17 February 1997 on Community Statistics4;

Whereas the Statistical Programme Committee established by Decision 89/382/EEC, Euratom5 has been consulted in accordance with Article 3 of the aforesaid Decision,

HAS ADOPTED THIS REGULATION: