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Common rules for the provision of basic information on Purchasing Power Parities and for their calculation and dissemination
Purchasing Power Parities (PPPs) allow a volume comparison of gross domestic product (GDP) and its aggregates between the Member States of the European Union (EU). In order to improve the transparency and quality of the entire process of PPP production, this Regulation is intended to set up a legal framework for the calculation of PPPs within the national statistical institutes and in the Statistical Office of the European Communities (Eurostat).
Regulation (EC) No 1445/2007 of the European Parliament and of the Council of 11 December 2007 establishing common rules for the provision of basic information on Purchasing Power Parities and for their calculation and dissemination.
Purchasing Power Parities (PPP) * take account of differences in price levels between Member States, thereby allowing a direct comparison to be made between the volume of their gross domestic product (GDP). This Regulation creates a legal framework for the sustainable development, production and dissemination of PPPs.
Roles and responsibilities
Eurostat's tasks include collecting information from the Member States for the calculation of PPPs, coordinating the supply of basic information *, calculating and publishing PPPs, and developing and communicating methodology, in consultation with the Member States. Eurostat calculates PPPs each calendar year.
The Regulation sets out the method which Member States must follow to collect the basic data. The survey results and basic information are certified by the Member States and sent to the Commission.
The results published by the Commission for each Member State include at least the following:
- PPPs at the level of GDP;
- PPPs for private household consumption expenditure and actual individual consumption;
- price level indices relative to the Community average;
- GDP, private household consumption expenditure and actual individual consumption and respective per capita figures in purchasing power standard (PPS *).
Use of PPPs
PPPs are used to calculate:
- the sums allocated by the Structural Funds and the Cohesion Fund; national per capita GDPs deflated by PPPs are used to draw up the list of regions eligible for Structural Funds assistance and to determine the amount of funding allocated to each region;
- the correction coefficients to be applied to the remuneration and pensions of officials and other servants of the European Communities (EC) in accordance with the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the EC.
The Commission provides a financial contribution covering up to 70% of the costs incurred by Member States which are eligible under the rules on grants.
|Key terms used in the act|
|Act||Entry into force||Deadline for transposition in the Member States||Journal|
Regulation (EC) No 1445/2007
OJ L 336, 20.12.2007