OECD Main Economic Indicators (MEI) - Treatment of Euro Area Statistics in the MEI Publication

The euro was introduced as a common currency for the eleven participating countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain) of the European Monetary Union on 1 January 1999. The euro area was then enlarged to include Greece on 1 January 2001.

For purposes of statistical treatment in MEI products, the euro area is regarded as an autonomous entity and presented as a "country" in the majority of cases.  The exceptions are for some series presented in Part One and Part Four of the publication for which an explanation is given below. 

The concept of the euro area as an autonomous entity is straightforward for statistics which have come into existence from the introduction of the euro.  Those covered in the MEI are euro area share prices, euro exchange rate and net international trade in the Euro area.  In addition, there are other financial statistics which now exist only at the euro area level and not for participating countries.  Those covered in the MEI are short-term interbank interest rates and the fully consolidated euro area monetary aggregates. 

Aggregation of euro area statistics

Other statistics for the Euro area need to be aggregated from the participating countries.  The choice of aggregation methodology, in particular the weights used to combine equivalent statistics from the participating countries, affects the interpretation of the euro area aggregate.  Statistics for the euro area can be regarded as coming from an autonomous entity if the weights used to aggregate data from the participating countries are derived from the same actual quantities observed in each country (possibly converted by exchange rates if the weighting base was prior to the introduction of the Euro).  For example, private final domestic consumption expenditure in euro for 2001 from each participating country is used as the country weight to calculate the euro area Harmonised Index of Consumer Prices (HICP) presented in Part Two of the publication. 

All euro area statistics supplied by European agencies for the MEI can be regarded as coming from an autonomous entity as they are produced by the methods outlined in the above two paragraphs.  In addition, the OECD calculates some Euro area statistics for the MEI using the above methodology and these can also be regarded as coming from an autonomous entity.  The affected series are: national accounts and crude steel series in Part Two, and; passenger cars, hourly earnings, civilian employment and effective exchange rates series in Part One.  Consequently, all such statistics (i.e. those supplied by the European agencies and OECD calculations using the above methodology) are included in the specific euro area statistics in Part Two or are located with country data for the international comparison tables in Part One and Part Four of the publication.

An alternative method for aggregating participating countries statistics in the Euro area is to take account of differences in purchasing power between the participating countries.  That is, the difference in quantity of equivalent goods that can be purchased for the same amount of money (i.e. in euros) in the different countries due to differing price levels between the countries.  This is the preferred approach used by the OECD for aggregating economic statistics, in particular those related to expenditures or production, where the principle concern is international comparability across the OECD.  (For more detail on evaluating appropriate aggregation methodologies, see "Compilation Methodologies for Euro Area Aggregates", Hong and Beilby-Orrin (1999))

Consequently, euro area series presented in Part One for national accounts volume indices, industrial production, composite leading indicator, retail trade, consumer prices and producer prices are weighted averages of the participating countries' data where the weights are calculated by converting the selected economic variables using purchasing power parities (PPPs).  For example, national accounts volume series use fixed US dollar PPPs for the OECD standard base year of  2000, while the producer price index is a chain-linked index weighted using the previous year's total GDP for each country converted with the previous year's US dollar GDP-PPPs.  An explanation of OECD PPP statistics is given in Part Four of this publication.  Euro area PPP statistics presented in Part Four are also aggregated using the PPP based weights for the participating countries.

As a result, Euro area series presented using this methodology for aggregation in Part 1 and Part 4 of the MEI publication will differ from equivalent series presented in Part 2, and those published by the relevant European agencies.  However, all Euro area series calculated using PPPs as weights are clearly indicated in this publication and the resulting Euro area data is presented with other area totals (e.g. total OECD, OECD Europe, G7 countries, EU15 etc.) to indicate that in these cases the Euro area data should not be regarded as coming from an autonomous entity.

Coverage

Most Euro area statistics in the MEI cover the 12 participating countries for the entire time series.  The exceptions are hourly earnings in industry and some financial series provided by the European Central Bank which cover only the original 11 EU countries prior to 2001 (i.e. they exclude Greece prior to 2001).  The affected series are footnoted in the publication tables. The sources and methods used by the European authorities for the compilation of euro area statistics presented in part 2 of the MEI publication can be found at Electronically available national practices for individual countries