				|

		52014DC0406

			Recommendation for a COUNCIL RECOMMENDATION on Germany’s 2014 national reform programme and delivering a Council opinion on Germany’s 2014 stability programme /* COM/2014/0406 final */

Recommendation for a
COUNCIL RECOMMENDATION
on Germany’s 2014 national reform
programme
and delivering a Council opinion on Germany’s 2014 stability programme

THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 121(2) and 148(4)
thereof,
Having regard to Council Regulation (EC) No
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary
positions and the surveillance and coordination of economic policies[1], and in particular
Article 5(2) thereof,
Having regard to Regulation (EU) No
1176/2011 of the European Parliament and of the Council of 16 November 2011 on
the prevention and correction of macroeconomic imbalances[2], and in particular
Article 6(1) thereof,
Having regard to the recommendation of the
European Commission[3],
Having regard to the resolutions of the
European Parliament[4],
Having regard to the conclusions of the
European Council,
Having regard to the opinion of the
Employment Committee,
Having regard to the opinion of the
Economic and Financial Committee,
Having regard to the opinion of the Social
Protection Committee,
Having regard to the opinion of the
Economic Policy Committee,
Whereas:
(1)
On 26 March 2010, the European Council agreed to
the Commission’s proposal to launch a new strategy for growth and jobs, Europe
2020, based on enhanced coordination of economic policies, which will focus on
the key areas where action is needed to boost Europe’s potential for
sustainable growth and competitiveness.
(2)
On 13 July 2010, the Council, on the basis of
the Commission's proposals, adopted a recommendation on the broad guidelines
for the economic policies of the Member States and the Union (2010 to 2014)
and, on 21 October 2010, adopted a decision on guidelines for the employment
policies of the Member States, which together form the ‘integrated guidelines’.
Member States were invited to take the integrated guidelines into account in
their national economic and employment policies.
(3)
On 29 June 2012, the Heads of State or
Government decided on a Compact for Growth and Jobs, providing a coherent
framework for action at national, EU and euro area levels using all possible
levers, instruments and policies. They decided on action to be taken at the
level of the Member States, in particular expressing full commitment to achieving
the objectives of the Europe 2020 Strategy and to implementing the
country-specific recommendations.
(4)
On 9 July 2013, the Council adopted a
recommendation on Germany’s national reform programme for 2013 and delivered
its opinion on Germany’s updated stability programme for 2012-2017. On 15 November 2013, in line with Regulation (EU) No 473/2013[5],
the Commission presented its opinion on Germany's draft
budgetary plan for 2014[6].
(5)
On 13 November 2013, the Commission adopted the
Annual Growth Survey[7],
marking the start of the 2014 European Semester of economic policy
coordination. On the same day on the basis of Regulation (EU) No 1176/2011, the
Commission adopted the Alert Mechanism Report[8],
in which it identified Germany as one of the Member States for which an
in-depth review would be carried out.
(6)
On 20 December 2013, the European Council
endorsed the priorities for ensuring financial stability, fiscal consolidation
and action to foster growth. It underscored the need to pursue differentiated,
growth-friendly fiscal consolidation, to restore normal lending conditions to
the economy, to promote growth and competitiveness, to tackle unemployment and
the social consequences of the crisis, and to modernise public administration.
(7)
On 5 March 2014, the Commission published the
results of its in-depth review for Germany[9],
under Article 5 of Regulation (EU) No 1176/2011. The Commission's analysis leads
it to conclude that Germany is experiencing macroeconomic imbalances, which
require monitoring and policy action. In particular, the current account has
persistently recorded a very high surplus, which reflects the positive effects
of strong competitiveness, with a large amount of savings being invested
abroad. It is also a sign that domestic growth has remained subdued and
economic resources may not have been allocated efficiently. Although the
current account surpluses do not raise risks similar to large deficits, the
size and persistence of the current account surplus in Germany deserve close
attention. The need for action to reduce the risk of adverse effects on the
functioning of the domestic economy and the euro area is particularly important
given the size of the German economy.
(8)
On 14 April 2014, Germany submitted its 2014 national
reform programme and on 8 April 2014 its 2014 stability programme. In
order to take account of their interlinkages, the two programmes have been
assessed at the same time.
(9)
The objective of the budgetary strategy outlined
in the 2014 Stability Programme is to ensure the continued achievement of the medium-term
objective. The Stability Programme confirms the medium-term objective of -0.5 %
of GDP, which reflects the requirements of the Stability and Growth Pact.
According to the Stability Programme, the (recalculated) structural balance
will remain positive in 2014 and thereafter and gross debt is planned to fall
to 76 % of GDP in 2014 and to remain on a sufficiently downward path
thereafter. Therefore, the budgetary strategy outlined in the programme is in
line with the requirements of the Stability and Growth Pact. The macroeconomic
scenario underpinning the budgetary projections in the programme, which has not
been formally endorsed by an independent body, is plausible, as it is broadly
in line with the Commission 2014 Spring Forecast. Based on the assessment of
the Stability Programme and the Commission Forecast, pursuant to Council
Regulation (EC) No 1466/97, the Council is of the opinion that public finances
in Germany remain overall sound as the medium-term objective is forecast to
continue to be maintained and the debt rule respected.
(10)
Only limited progress has been made by Germany in
enhancing the cost-effectiveness of public spending on healthcare and long-term
care, although new initiatives have been announced. While their aim is to
improve the cost-effectiveness of health care, these plans might not be
sufficient to contain expected future cost increases. The recently adopted pension
reform aims to improve early retirement conditions ("Rente mit 63")
and pension levels for certain groups, the latter also including a pension
supplement for those having raised children born before 1992 ("Mütterrente").
The reform puts an additional strain on the sustainability of the public pension
system and is planned to be financed by a higher pension contribution rate,
with negative implications for disposable incomes of the active labour force. The
reform could also have a negative impact on take-up of complementary second and
third pillar pensions. Germany has made limited progress in increasing spending
on education and some progress concerning higher research spending. Further
efforts appear necessary at all levels of government to meet the target for
total public and private expenditure on education and research of 10 % of
GDP by 2015, and even more ambitious follow-up targets should be aimed for in
order to catch up with the most innovative economies. Infrastructure investment
has been increased in Germany in recent years and plans exist to reinforce it
further, but additional efforts appear necessary.
(11)
Germany has made overall limited progress in improving
the efficiency and growth-friendliness of the tax system and to reduce the high
tax burden on labour. No major measures are foreseen to shift towards more
growth-friendly revenue sources. The application of the reduced value-added tax
(VAT) rate (currently 7 %) could be narrowed and the general VAT base
broadened. Rather low revenues from recurrent property taxes suggests that
there is scope for increases and the distribution of the tax burden could be
fairer if the tax base for the municipal real estate tax (Grundsteuer)
would be reassessed. Conditions for investment in Germany could be further
improved by reforming the local trade tax (Gewerbesteuer), cutting the administrative
burden linked to tax collection, and reducing the existing corporate tax bias
in favour of debt-financing.
(12)
The fiscal framework has been complemented by a
national balanced-budget rule and the establishment of an independent advisory
board. Specific rules for implementing the constitutional balanced-budget rule ('debt
brake') appear still to be required in several Länder so as to ensure
the effective application of the debt brake in the annual budgetary cycle. The
planned review of fiscal relations between the federation, Länder and
municipalities should be used to strengthen fiscal responsibility and
accountability.
(13)
Wages have risen in recent years after a
prolonged period of wage moderation, but in 2013 real wage growth was more
moderate than in 2012. Germany plans to introduce a general minimum wage of EUR
8.50/hour in 2015, which will take full effect as of 2017. The introduction of
the planned general minimum wage, which is aimed at ensuring an adequate
minimum income for workers, requires close monitoring of its impact, notably on
employment. Limited effort has been made to reduce the high tax wedge, notably
for low-wage earners. The adopted pension reform and current reform plans in
the area of long-term care, which involve a rise in social insurance
contribution rates, could again increase the tax wedge. Germany has made some
progress in raising the educational achievement of disadvantaged people, but
the link between educational achievement and socio-economic background remains
strong and persists over people's working life. Despite some progress towards
appropriate activation and integration measures, long-term unemployment remains
a concern, signalling a need for additional measures. Only limited progress has
been made in taking measures to facilitate the transition from mini-jobs into
forms of employment subject to full mandatory social security contributions. No
progress has been made to reduce fiscal disincentives
to work for second earners. Germany has made some
progress in expanding the availability of full-time early childhood education
and care places, while progress in the extension of all-day schools has been
limited. At the same time, childcare facilities and all-day schools are still
the subject of quality concerns and regional disparities.
(14)
The government proposal for a revision of the
Renewable Energy Act aims to slow down overall energy cost increases,
distribute the costs more evenly across consumers, control the expansion of
renewables and promote market integration. The implementation of the reform needs
to be carefully monitored with regard to its impact on the cost-effectiveness
of the support system. Further efforts are needed as regards network expansion
and coordination with neighbouring countries.
(15)
Policy action to further stimulate competition
in the services sectors has been limited, even though isolated reforms in
specific professions and regions have been enacted, for instance as regards
authorisations and commercial communication in the construction sector. While
productivity growth may be structurally lower in the service sectors than in
industry, it is particularly low in some service sectors, notably professional services.
There are still barriers to entering the market and exercising professional
services. These include restrictions on the legal form and shareholding, and
professional qualifications requirements. The diversity of regulatory arrangements
for professional services across Länder suggests that there is scope for
identifying the least burdensome regulatory approaches and extending them
throughout the country. The value of contracts
published by the German authorities under EU procurement legislation remains one
of the lowest in the EU. The comprehensive transition to a transparent e-procurement
market could increase competition. In the retail sector, planning regulations
in certain Länder continue to restrict new entries in the market.
Progress in improving competition in the railway markets has been limited.
(16)
Germany has made limited progress on measures
taken to consolidate the banking sector, in particular by improving the
governance framework. Commission state aid decisions have largely driven the
restructuring of Landesbanken in recent years and the sector remains
fragmented. Further efforts are needed to address structural and governance
obstacles that hamper a market-driven consolidation, which would also increase
the overall efficiency of the financial sector. Reviewing the legal framework
of the second banking pillar could further support consolidation in the public
banking sector.
(17)
In the context of the European Semester, the
Commission has carried out a comprehensive analysis of Germany’s economic
policy. It has assessed the stability programme and the national reform
programme. It has taken into account not only their relevance for sustainable
fiscal and socio-economic policy in Germany but also their compliance with EU
rules and guidance, given the need to reinforce the overall economic governance
of the European Union by providing EU-level input into future national decisions.
Its recommendations under the European Semester are reflected
in recommendations (1) to (4) below.
(18)
In the light of this assessment, the Council has
examined Germany’s stability programme, and its opinion[10] is reflected in
particular in recommendation (1) below.
(19)
In the light of the Commission's in-depth review
and this assessment, the Council has examined the national reform programme and
the stability programme. Its recommendations under Article 6 of Regulation (EU)
No 1176/2011 are reflected in recommendations (1) to (4) below.
(20)
In the context of the European Semester the
Commission has also carried out an analysis of the economic policy of the euro
area as a whole. On the basis of this analysis, the Council has issued specific
recommendations for Member States whose currency is the euro. Germany should
also ensure the full and timely implementation of these recommendations.
HEREBY RECOMMENDS that Germany take
action within the period 2014-2015 to:
1.
Pursue growth-friendly fiscal policy and
preserve a sound fiscal position, ensuring that the medium-term budgetary
objective continues to be adhered to throughout the period covered by the Stability
Programme and that the general government debt ratio remains on a sustained
downward path. In particular, use the available scope for increased and more
efficient public investment in infrastructure, education and research. Improve
the efficiency of the tax system, in particular by broadening the tax base, notably
on consumption, by reassessing the municipal real estate tax base, by improving
the tax administration and by reviewing the local trade tax, also with a view
to foster private investment. Make additional efforts to increase the
cost-effectiveness of public spending on healthcare and long-term care. Ensure
the sustainability of the public pension system by (i) changing the financing
of new non-insurance/extraneous benefits ("Mütterrente") to
funding from tax revenues, also in order to avoid a further increase of social
security contributions, (ii) increasing incentives for later retirement, and
(iii) increasing the coverage in second and third pillar pension schemes. Complete
the implementation of the debt brake consistently across all Länder, ensuring
that monitoring procedures and correction mechanisms are timely and relevant.
Improve the design of fiscal relations between the federation, Länder and
municipalities also with a view to ensuring adequate public investment at all
levels of government.
2.
Improve conditions that further support domestic
demand, inter alia by reducing high taxes and social security contributions,
especially for low-wage earners. When implementing the general minimum wage, monitor
its impact on employment. Improve the employability of workers by further
raising the educational achievement of disadvantaged people and by implementing
more ambitious activation and integration measures in the labour market,
especially for the long-term unemployed. Take measures to reduce fiscal
disincentives to work, in particular for second earners, and facilitate the
transition from mini-jobs to forms of employment subject to full mandatory
social security contributions. Address regional shortages in the availability
of fulltime childcare facilities and all-day schools while improving their
overall educational quality.
3.
Keep the overall costs of transforming the
energy system to a minimum. In particular, monitor the impact of the Renewable
Energy Act reform on the cost-effectiveness of the support system for renewable
energies. Reinforce efforts to accelerate the expansion of the national and
cross-border electricity and gas networks. Step up close energy policy
coordination with neighbouring countries.
4.
Take more ambitious measures to further
stimulate competition in the services sector, including certain professional
services, also by reviewing existing regulatory approaches and converging
towards best practices across Länder. Identify the reasons behind the low
value of public contracts open to procurement under EU legislation. Increase
efforts to remove existing planning regulations which restrict new entries in
the retail sector. Take action to remove the remaining barriers to competition
in the railway markets. Pursue consolidation efforts in the Landesbanken
sector, including by improving the governance framework.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 2.8.1997, p. 1.
[2]               OJ L 306, 23.11.2011, p. 25.
[3]               COM(2014) 406 final.
[4]               P7_TA(2014)0128 and P7_TA(2014)0129.
[5]               OJ L 140, 27.5.2013, p.11.
[6]               C(2013) 8001 final
[7]               COM(2013) 800 final.
[8]               COM(2013) 790 final.
[9]               SWD(2014) 78 final.
[10]             Under Article 5(2) of Council Regulation (EC) No
1466/97.


title: Council Recommendation of 8 July 2014 on the National Reform Programme 2014 of Malta and delivering a Council opinion on the Stability Programme of Malta, 2014

text:
               29.7.2014

               EN

               Official Journal of the European Union

               C 247/83

         COUNCIL RECOMMENDATION
   of 8 July 2014
   on the National Reform Programme 2014 of Malta and delivering a Council opinion on the Stability Programme of Malta, 2014
   2014/C 247/16
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

               On 26 March 2010, the European Council agreed to the Commission's proposal to launch a new strategy for growth and jobs, Europe 2020, based on enhanced coordination of economic policies, which focuses on the key areas where action is needed to boost Europe's potential for sustainable growth and competitiveness.

               (2)

               On 13 July 2010, the Council, on the basis of the Commission's proposals, adopted a Recommendation on the broad guidelines for the economic policies of the Member States and the Union (2010 to 2014) and, on 21 October 2010, it adopted a decision on guidelines for the employment policies of the Member States (3), which together form the ‘integrated guidelines’. Member States were invited to take the integrated guidelines into account in their national economic and employment policies.

               (3)

               On 29 June 2012, the Member States, Heads of State or Government decided on a Compact for Growth and Jobs, providing a coherent framework for action at national, EU and euro area levels using all possible levers, instruments and policies. They decided on action to be taken at the level of the Member States, in particular expressing full commitment to achieving the objectives of the Europe 2020 Strategy and to implementing the country-specific recommendations.

               (4)

               On 9 July 2013, the Council adopted a Recommendation (4) on Malta's National Reform Programme for 2013 and delivered its opinion on Malta's updated Stability Programme for 2012-2016. On 15 November 2013, in line with Regulation (EU) No 473/2013 of the European Parliament and of the Council (5), the Commission presented its opinion on Malta's draft budgetary for 2014.

               (5)

               On 13 November 2013, the Commission adopted the Annual Growth Survey, marking the start of the 2014 European Semester for economic policy coordination. Also, on 13 November 2013, the Commission, on the basis of Regulation (EU) No 1176/2011, adopted the Alert Mechanism Report, in which it identified Malta as one of the Member States for which an in-depth review would be carried out.

               (6)

               On 20 December 2013, the European Council endorsed the priorities for ensuring financial stability, fiscal consolidation and action to foster growth. It underscored the need to pursue differentiated, growth-friendly fiscal consolidation, to restore normal lending conditions to the economy, to promote growth and competitiveness, to tackle unemployment and the social consequences of the crisis, and to modernise public administration.

               (7)

               On 5 March 2014, the Commission published the results of its in-depth review for Malta, under Article 5 of Regulation (EU) No 1176/2011. The Commission's analysis leads it to conclude that Malta is no longer experiencing macroeconomic imbalances in the sense of the Macroeconomic Imbalance Procedure. Although indebtedness remains high, risks to the sustainability of private and public sector debt and the stability of the financial sector appear contained, even if they deserve continued monitoring. In particular, financial stability indicators remain sound. Still, in light of the structural nature of the risks in the sector, a continuation of the current prudent supervisory and risk-taking practices is key. The housing market has stabilised and thus risks arising from over-exposure to property are limited. Private debt is on the decrease; the corporate deleveraging is taking place in an orderly manner and credit market pressures are limited.

               (8)

               On 16 April 2014, Malta submitted its 2014 National Reform Programme which was updated on 8 May 2014 and, on 30 April 2014, its 2014 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (9)

               The objective of the budgetary strategy outlined in the 2014 Stability Programme is to correct the excessive deficit in a sustainable manner by 2014 and to gradually progress toward the medium-term objective of a balanced budgetary position in structural terms, which is more stringent than what the Stability and Growth Pact requires. However, the achievement of the medium-term objective is not planned within the programme period. In 2014, the planned (recalculated) structural adjustment is narrowly missing the recommended effort. After the planned correction of the excessive deficit, a small deviation from the adjustment path towards the medium-term objective is planned in 2015. Thereafter, the planned annual progress towards the medium-term objective is broadly in line with the requirement of at least 0,5 % of GDP. The Stability Programme projects that the government debt, at 73 % of GDP in 2013, will be put on a downward path, compliant with the debt reduction benchmark, as from 2014. Overall, the programme objectives are largely in line with the requirements of the Stability and Growth Pact. The macroeconomic scenario underpinning the budgetary projections in the Stability Programme, which has been endorsed by an independent body (the National Audit Office), is plausible for 2014 and 2015 since the economic growth projections are marginally lower than those in the Commission services 2014 Spring forecast for these years.
               However, risks to the budgetary targets are tilted to the down-side, as the structural revenue increase planned over the programme period is not fully underpinned by measures and expenditure overruns could require higher than budgeted disbursements. According to the Commission forecast, Malta is expected to sustainably correct its excessive deficit in 2014. At the same time, based on the Commission forecast, the fiscal effort over the period 2013-2014 falls short by 1,6 % of GDP in terms of (corrected) change in the structural balance and by 1,25 % of GDP in terms of the amount of required measures estimated as necessary at the time of the Excessive Deficit Procedure recommendation. While there is no margin with respect to the compliance with the debt reduction benchmark in 2014, risks to the debt scenario are tilted to the positive side.

               (10)

               In 2015, there is a risk of significant deviation from the required progress towards the medium-term objective. Based on its assessment of the Stability Programme and the Commission forecast, pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that, while Malta's planned headline deficit and general government debt comply with the Excessive Deficit Procedure recommendation, additional efforts are needed to bring the structural adjustment in line with the recommended one in 2014 and to ensure an appropriate path towards the medium-term objective as of 2015.

               (11)

               The non-binding nature of Malta's fiscal framework and the short horizon of fiscal planning are not supportive of a sound fiscal position. The adoption of the legislation meant to come into force by the end of 2013 and aimed at fulfilling the requirements of Council Directive 2011/85/EU (6) and the Fiscal Compact has been delayed. However, according to the Stability Programme the Government has recently endorsed a Fiscal Responsibility Act, which will be submitted for the Parliament's approval. The draft act foresees the introduction of a balanced-budget rule in structural terms, a debt rule, a three‐year rolling budgetary framework and a gradual setting up of a Fiscal Council which would be charged with endorsing the government's official macroeconomic and fiscal forecasts as well as ex ante and ex post monitoring of the respect of fiscal rules.

               (12)

               Malta's revenue departments are due to be merged into a single authority, which would streamline tax collection processes and counter tax evasion. In order to improve tax compliance and encourage the recovery of amounts due, the penalties in VAT legislation and the interest on taxes due have been revised. Various other measures have been introduced that are also expected to consolidate Malta's tax system. These measures go in the right direction, but their impact has yet to become apparent.

               (13)

               Despite still facing challenges regarding the long-term sustainability of Malta's public finances, little progress can be registered as yet on its pensions system reforms and the sustainability of its healthcare services. While a Pensions Strategy Group has been set up to assess all options for reforming the pension system, the Maltese authorities have given a commitment not to raise the statutory retirement age beyond the increases outlined in the 2006 pension reform. While Malta intends to address these shortcomings with labour market measures and in particular its recently adopted active ageing strategy, it is unlikely that this will solve the problem. The sustainability of the healthcare system adds to the challenge in view of a projected increase in age-related expenditure. A draft national health systems strategy has just been launched, but it is unclear how this will be implemented and what gains it will bring in terms of cost-effectiveness and sustainability. There is a need to strengthen public primary care.

               (14)

               Malta's early school leaving rate is still very high, but measures are being taken to reduce it and a comprehensive monitoring system is being set up. Basic skill attainment remains low, however, thereby contributing to low literacy and early school leaving. Proper implementation of the recently adopted National Literacy Strategy is expected to support efforts addressing this shortcoming. This is to be complemented by further measures, which are expected to increase the labour-market relevance of training and education. These include the reform of the apprenticeship framework, establishing a lifelong learning strategy, the introduction of work-based learning in vocational educational and training, and a specific programme financed through the European Social Fund.

               (15)

               Malta is currently implementing a number of significant measures that seek to increase the participation of women in the labour market, in particular through the provision of free childcare services to households in which parents are in employment or pursuing further education. Effective implementation will be crucial. The authorities are also helping to provide after-school care and offering opportunities to send children to school before the stipulated opening hours, so that parenthood can be better reconciled with working life. Tax incentives are also envisaged to encourage parents to send children to childcare facilities already running under previous schemes. Little is being done, however, to provide and promote the use of flexible working arrangements, such as teleworking and flexitime, which would help the reintegration of women into the labour market.

               (16)

               In order to further improve its international competitiveness, in addition to avoiding the potentially negative impact of a misalignment between wage and productivity developments, Malta still needs to address infrastructure shortcomings in the energy and transport sectors that dampen its potential, in particular in view of elevated energy costs. The electricity interconnector with Italy is due to be completed this year, which will enhance security of supply and may contribute to the diversification of supply and the use of externally generated renewable energy. The Delimara LNG terminal and the planned link-up with the European gas network will also add to Malta's energy mix, making it less reliant on one main source of energy and thereby increasing its attractiveness as a place for business. Home-grown renewable energy sources, with the exception of some success as regards the use of photovoltaic energy, represent a potential that remains to be tapped.

               (17)

               Certain public administration inefficiencies are limiting the further development of the business climate in Malta. While improvements in public procurement go in the right direction, procurement procedures remain excessively long, resulting in inefficient public expenditure. These measures are not accompanied by targets making an assessment of their effectiveness difficult. The lack of alternatives to debt financing leads to a high cost of funding for companies, which puts pressure on their economic activity. This corporate debt bias may also lead to excessively high corporate leverage and insufficient allocation of capital. Further opportunities for non-debt financing therefore need to be pursued. The inefficiencies in the judicial system highlighted in the 2013 country-specific recommendations for Malta remain. While it is expected that a number of the numerous reform proposals delivered by the Commission for the Reform of Justice in November 2013 will be implemented by the end of 2014, a clear timeline and prioritisation of measures still needs to be announced. It also remains to be seen how these will address the backlog, in particular as regards the shortcomings identified above.

               (18)

               Malta has strengthened regulatory oversight to ensure the stability of the financial sector. Macro-prudential supervision has been added to the functions of the Central Bank of Malta, and special emphasis is being placed on financial stability issues, while the Joint Financial Stability Board is now enshrined in legislation. Satisfactory measures have been taken to improve loan-loss provisioning, mainly through the introduction of a revision of Banking Rule 9.

               (19)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Malta's economic policy. It has assessed the National Reform Programme and the Stability Programme. It has taken into account not only their relevance for sustainable fiscal and socio-economic policy in Malta but also their compliance with EU rules and guidance, given the need to reinforce the overall economic governance of the Union by providing EU-level input into future national decisions. Its recommendations under the European Semester are reflected in recommendations (1) to (5) below.

               (20)

               In the light of this assessment, the Council has examined the Stability Programme, and its opinion (7) is reflected in particular in recommendation (1) below.

               (21)

               In the context of the European Semester the Commission has also carried out an analysis of the economic policy of the euro area as a whole. On this basis, the Council has issued specific recommendations addressed to the Member States whose currency is the euro (8). As a country whose currency is the euro, Malta should also ensure the full and timely implementation of those recommendations,

         HEREBY RECOMMENDS that Malta take action within the period 2014-2015 to:

               1.

               Correct the excessive deficit in a sustainable manner by 2014. In 2015, significantly strengthen the budgetary strategy to ensure the required structural adjustment of 0,6 % of GDP towards the medium-term objective. Thereafter, pursue a structural adjustment of at least 0,5 % of GDP each year, and more in good economic conditions or if needed to ensure that the debt rule is met in order to keep the general government debt ratio on a sustained downward path. Finalise the adoption of the Fiscal Responsibility Act with a view to putting in place a binding, rule-based multiannual fiscal framework and establishing an independent institution charged with the monitoring of fiscal rules and endorsing macroeconomic forecasts underpinning fiscal planning. Continue improving tax compliance and fighting tax evasion by ensuring the continued roll-out and evaluation of measures taken so far, while taking additional action, in particular by promoting the use of electronic means of payment.

               2.

               To ensure the long-term sustainability of public finances continue the ongoing pension reform, such as by accelerating the already enacted increase in the statutory retirement age and by consecutively linking it to changes in life expectancy. Ensure that a comprehensive reform of the public health system delivers a cost-effective and sustainable use of available resources, such as strengthening primary care.

               3.

               Continue policy efforts to address the labour-market relevance of education and training by stepping up efforts on the reform of the apprenticeship system. Further improve basic skills attainment and reduce early school leaving, in particular by finalising and implementing the announced national literacy strategy. Further improve the labour-market participation of women, in particular those wishing to re-enter the labour market by promoting flexible working arrangements.

               4.

               Diversify the energy mix in the economy, including by increasing the share of energy produced from renewable sources.

               5.

               Continue efforts to increase the efficiency and reduce the length of public procurement procedures; encourage alternatives to debt-financing of companies through facilitating access to capital markets and developing venture capital funds; and increase the efficiency of the judicial system by ensuring a timely and efficient implementation of the planned judicial reform.

      Done at Brussels, 8 July 2014.

            For the Council

            The President

         P. C. PADOAN

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  OJ L 306, 23.11.2011, p. 25.

      (3)  Maintained for 2014 by Council Decision 2014/322/EU of 6 May 2014 on guidelines for the employment policies of the Member States for 2014 (OJ L 165, 4.6.2014, p. 49).

      (4)  OJ C 217, 30.7.2013, p. 59.

      (5)  Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area (OJ L 140, 27.5.2013, p.11).

      (6)  Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States (OJ L 306, 23.11.2011, p. 41).

      (7)  Under Article 5(2) of Regulation (EC) No 1466/97.

      (8)  See page 141 of the current Official Journal.


				|

		52013PC0907

			Recommendation for a COUNCIL DECISION establishing that no effective action has been taken by Poland in response to the Council Recommendation of 21 June 2013 /* COM/2013/0907 final */

			   	Recommendation for a
COUNCIL DECISION
establishing that no effective action has
been taken by Poland in response to the Council Recommendation of 21 June 2013

THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the
Treaty on the Functioning of the European Union, and in particular Article
126(8) thereof,
Having regard to the
recommendation from the European Commission,
Whereas:
(1)       According to Article 126
of the Treaty on the Functioning of the European Union (TFEU) Member States
shall avoid excessive government deficits;
(2)       The Stability and Growth
Pact is based on the objective of sound government finances as a means of
strengthening the conditions for price stability and for strong sustainable
growth conducive to employment creation.
(3)       On 7 July 2009, the
Council decided, in accordance with Article 104(6) of the Treaty establishing
the European Community (TEC), that an excessive deficit existed in Poland and
issued a recommendation to correct the excessive deficit by 2012 at the latest,
in accordance with Article 104(7) TEC and Article 3 of Council Regulation (EC)
No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of
the excessive deficit procedure[1].
In order to bring the general government deficit at or below 3% of GDP in a
credible and sustainable manner, the Polish authorities were recommended to
implement the fiscal stimulus measures in 2009 as planned, ensure an average
annual structural budgetary adjustment of at least 1¼% percentage points of GDP
starting in 2010, spell out detailed measures that are necessary to bring the
deficit below the reference value by 2012 and introduce reforms to contain
primary current expenditure over the following years. The Council established a
deadline of 7 January 2010 for effective action to be taken.
(4)       On 3 February 2010, the
Commission concluded that based on the Commission 2009 autumn forecast, Poland had taken necessary action in compliance with the Council recommendation of 7 July
2009 to bring its government deficit within the Treaty reference value and
considered that no additional step in the excessive deficit procedure was
therefore necessary. On the basis of its 2011 autumn forecast, the Commission
considered that Poland was not on track and asked for additional measures, which
  Poland adopted and publicly announced until 10 January 2012. Thus, on 11
January 2012 the Commission confirmed the Polish authorities had taken
effective action towards a timely and sustainable correction of the excessive
deficit and no further steps in the excessive deficit procedure of Poland were needed at the time[2].
(5)       On 21 June 2013, the
Council concluded that Poland had taken effective action but adverse economic
events with major implications on public finances had occurred, and issued
revised recommendations[3].
Thus, Poland fulfilled the conditions for the extension of the deadline for
correcting the excessive general government deficit as laid down in Article
3(5) of Regulation (EC) No 1467/97. The Council recommended that Poland should put an end to the excessive deficit situation by 2014. Poland should reach a headline general government deficit target of 3.6% of GDP in 2013 and
3.0% of GDP in 2014, which is consistent with an annual improvement of the
structural budget balance of at least 0.8% of GDP and 1.3% of GDP in 2013 and
2014, respectively, based on the Commission updated 2013 spring forecast. Poland should rigorously implement the measures already adopted, while complementing them
with additional measures sufficient to achieve a correction of the excessive
deficit by 2014. Poland should use all windfall gains for deficit reduction.
The Council established the deadline of 1 October 2013 for Poland to take effective action and, in accordance with Article 3(4a) of Regulation (EC) No
1467/97, to report in detail the consolidation strategy that is envisaged to
achieve the targets.
(6)       On 2 October 2013, Poland submitted a report on effective action. The macroeconomic scenario underpinning the
report is similar to the one used for the Convergence Programme 2013. After
recording an average real GDP growth of 4% per year over 2001-2011, the pace of
economic activity slowed down in 2012 to 1.9%. The macroeconomic scenario
underpinning the report on effective action projects real GDP growth to slow down
further in 2013 to 1.5% before rebounding in 2014 and 2015 with real GDP
expanding by 2.5% and 3.8%, respectively. According to the Commission 2013
autumn forecast, real GDP is set to grow at 1.3% in 2013 and accelerate to 2.5%
in 2014 and 2.9% in 2015. Compared to the Polish authorities, the Commission has
a less optimistic view on domestic demand growth over the forecast horizon,
private consumption and private investment in particular.
(7)       The Polish authorities
foresee a general government deficit of 4.8% of GDP in 2013, up from 3.9% of
GDP in 2012. This is worse than 3.5% of GDP provided in the 2013 update of the
Convergence Programme and is due to a significant revenue shortfall of 1.2 % of
GDP and an expenditure slippage of 0.1% of GDP. Subsequently, the Polish
Ministry of Finance projects a surplus of 4.5% of GDP in 2014 on the back of
the planned pension reform, which in particular results in a one-off transfer
of assets worth 8.5% of GDP. In 2015, the general government balance is
expected to turn back to a deficit of 3% of GDP.
(8)       For 2013 and 2014, the
Commission forecast is similar to the Polish authorities'. It also projects a
deficit of 4.8% of GDP in 2013. The deterioration compared to the 3.9% of GDP
in the EDP baseline scenario is mainly due to revenue shortfalls. In 2014, the
general government balance is projected to be in surplus (+4.6% of GDP) as a
consequence of the planned pension reform. For 2015 the Commission is less
optimistic than the Polish authorities and expect a general government deficit
of 3.3% of GDP. The 0.3 pp. of GDP difference is mainly due to lower current
revenues based on a lower projection of nominal GDP growth as well as higher
government expenditure on intermediate consumption. The deficit targets are
subject to implementation risks.
(9)       Both the Polish
authorities and the Commission project the general government gross debt to
remain below the 60% threshold over the entire period under consideration.
According to the Commission 2013 autumn forecast, the debt-to-GDP ratio is
forecast to fall from 55.6% in 2012 to 51% in 2014, mainly as an effect of the
announced transfer of pension funds' assets of 8.5% of GDP, before edging up to
52.5% in 2015.
(10)     Since, according to the
Commission's 2013 autumn forecast, the general government deficit in 2013 is
projected to reach 4.8% of GDP, Poland is set to miss the headline deficit
target of 3.6% of GDP recommended by the Council. Also the annual adjusted
structural effort in 2013 (0.3% of GDP) is well below the recommended annual
fiscal effort (0.8% of GDP). The bottom-up analysis of new discretionary
measures complemented by an assessment of expenditure developments[4], shows an overall fiscal effort
of 0.2% of GDP. This falls short of the required additional measures of 0.4% of
GDP underlying the fiscal effort set in the Council Recommendation and confirms
that Poland has not implemented the fiscal effort in 2013 as recommended by the
Council.
(11)     In 2014, the Commission
expect a general government surplus of 4.6% of GDP. Thus, the headline deficit
target is set to be fulfilled only due to the one-off transfer of pension
funds' assets. The expected annual adjusted structural effort is with 1.4% of
GDP in 2014 above the recommended annual fiscal effort of 1.3% of GDP.
(12)     Overall, Poland has not complied with fiscal targets recommended for 2013, while for 2014 the targets
specified in the Council recommendation of 21 June 2013 are forecast to be met.
However, the Commission projection for 2015 expect the correction of the excessive
deficit in 2014 not to be sustainable as the deficit is set to reach 3.3% of
GDP,
HAS DECIDED AS FOLLOWS:
Article 1
Poland has not taken
effective action in 2013 in response to the Council recommendation according to
Article 126(7) of the Treaty of 21 June 2013
Article 2
This decision
is addressed to the Republic of Poland.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 2.8.1997, p. 6.
[2]               Communication from the
Commission to the Council on assessment of budgetary implementation in the
context of the ongoing Excessive Deficit Procedures after the Commission
services' 2011 Autumn forecast - COM(2012) 4 final, 11.1.2012.
[3]               Council Recommendation with a
view to bringing an end to the situation of an excessive government deficit in Poland, 21 June 2013.
[4]               Corrected for expenditure
over- and under-execution which is outside the control of the government.


title: EU Drugs Strategy (2013-20)

text:
               29.12.2012

               EN

               Official Journal of the European Union

               C 402/1

         EU Drugs Strategy (2013-20)
   2012/C 402/01
   PREFACE

               1.

               This EU Drugs Strategy provides the overarching political framework and priorities for EU drugs policy identified by Member States and EU institutions, for the period 2013-20. The framework, aim and objectives of this Strategy will serve as a basis for two consecutive 4-year EU Drugs Action plans.

               2.

               This Drugs Strategy is based first and foremost on the fundamental principles of EU law and, in every regard, upholds the founding values of the Union: respect for human dignity, liberty, democracy, equality, solidarity, the rule of law and human rights. It aims to protect and improve the well-being of society and of the individual, to protect public health, to offer a high level of security for the general public and to take a balanced, integrated and evidence-based approach to the drugs phenomenon.

               3.

               The Strategy is also based on international law, the relevant UN Conventions (1) which provide the international legal framework for addressing the illicit drugs phenomenon and the Universal Declaration on Human Rights. This EU Drugs Strategy takes into account relevant UN political documents, including the UN Political Declaration and Action Plan on International Cooperation towards an Integrated and Balanced Strategy to Counter the World Drug Problem, adopted in 2009, which states that drug demand reduction and drug supply reduction are mutually reinforcing elements in illicit drugs policy and the UN Political Declaration on HIV/AIDS. The Strategy has been drafted on the basis of the principles set out in the Lisbon Treaty and on the respective competences of the Union and individual Member States. Due regard is given to subsidiarity and proportionality, as this EU Strategy intends to add value to national strategies. The Strategy shall be implemented in accordance with these principles and competencies. Furthermore, the Strategy respects fully the European Convention on Human Rights and the EU Charter of Fundamental Rights.

               4.

               By 2020, the priorities and actions in the field of illicit drugs, encouraged and coordinated through this EU Drugs Strategy, should have achieved an overall impact on key aspects of the EU drug situation. They shall ensure a high level of human health protection, social stability and security, through a coherent, effective and efficient implementation of measures, interventions and approaches in drug demand and drug supply reduction at national, EU and international level, and by minimising potential unintended negative consequences associated with the implementation of these actions.

               5.

               The drugs phenomenon is a national and international issue that needs to be addressed in a global context. In this regard, coordinated action carried out at EU level plays an important role. This EU Drugs Strategy provides a common and evidence-based framework for responding to the drugs phenomenon within and outside the EU. By providing a framework for joint and complementary actions, the Strategy ensures that resources invested in this area are used effectively and efficiently, whilst taking into account the institutional and financial constraints and capacities of Member States and of the EU institutions.

               6.

               The Strategy aims to contribute to a reduction in drug demand and drug supply within the EU, as well as a reduction as regards the health and social risks and harms caused by drugs through a strategic approach that supports and complements national policies, that provides a framework for coordinated and joint actions and that forms the basis and political framework for EU external cooperation in this field. This will be achieved through an integrated, balanced and evidence-based approach.

               7.

               Finally, this Strategy builds on the lessons learned from the implementation of previous EU Drugs Strategies and associated Action Plans, including the findings and recommendations from the external evaluation of the EU Drugs Strategy 2005-12, while taking into account other relevant policy developments and actions at EU level and international level in the field of drugs.

         I.   Introduction

               8.

               The Strategy takes on board new approaches and addresses new challenges which have been identified in recent years, including:

                           —

                           the increasing trend towards poly-substance use, including the combination of licit substances, such as alcohol and prescribed controlled medication, and illicit substances;

                           —

                           the trends towards non-opioid drug use as well as the emergence and spread of new psychoactive substances;

                           —

                           the need to ensure and improve access to prescribed controlled medications;

                           —

                           the need to improve the quality, coverage and diversification of drug demand reduction services;

                           —

                           the continued high incidence of blood-borne diseases, especially hepatitis C virus, among injecting drug users and potential risks of new outbreaks of HIV infections and other blood-borne diseases related to injecting drugs use;

                           —

                           the continuing high prevalence of numbers of drug-related deaths within the EU;

                           —

                           the need to target drug use through an integrated health care approach addressing — inter alia — psychiatric co-morbidity;

                           —

                           the dynamics in the illicit drug markets, including shifting drug trafficking routes, cross-border organised crime and the use of new communication technologies as a facilitator for the distribution of illicit drugs and new psychoactive substances;

                           —

                           the need to prevent diversion of precursors, pre-precursors and other essential chemicals used in the illicit manufacture of drugs from legal trade to the illicit market and the diversion of certain chemicals used as cutting agents.

               9.

               The objectives of the EU Drugs Strategy are:

                           —

                           to contribute to a measurable reduction of the demand for drugs, of drug dependence and of drug-related health and social risks and harms;

                           —

                           to contribute to a disruption of the illicit drugs market and a measurable reduction of the availability of illicit drugs;

                           —

                           to encourage coordination through active discourse and analysis of developments and challenges in the field of drugs at EU and international level;

                           —

                           to further strengthen dialogue and cooperation between the EU and third countries and international organisations on drug issues;

                           —

                           to contribute to a better dissemination of monitoring, research and evaluation results and a better understanding of all aspects of the drugs phenomenon and of the impact of interventions in order to provide sound and comprehensive evidence-base for policies and actions.

               10.

               The Strategy builds upon the achievements (2) made by the EU in the field of illicit drugs and is informed by an ongoing, comprehensive assessment of the current drug situation in particular that provided by the EMCDDA, while recognising the need to proactively respond to developments and challenges.

               11.

               The Strategy is structured around two policy areas; drug demand reduction and drug supply reduction, and three cross-cutting themes: (a) coordination, (b) international cooperation and (c) research, information, monitoring and evaluation. Its two consecutive Action Plans, drafted by corresponding Presidencies in 2013 and 2017, will provide a list of specific actions with a timetable, responsible parties, indicators and assessment tools.

               12.

               Taking due account of the current drugs situation and the implementation needs of the Strategy, a limited number of targeted actions will be selected on each of the two policy areas and three cross-cutting themes, for inclusion in the Action Plans based on criteria which include the following:

                           (a)

                           actions must be evidence-based, scientifically sound and cost-effective, and aim for realistic and measurable results that can be evaluated;

                           (b)

                           actions will be time-bound, have associated benchmarks, performance indicators and identify responsible parties for their implementation, reporting and evaluation;

                           (c)

                           actions must have a clear EU relevance and added value.

               13.

               To safeguard a continued focus on the implementation of the Strategy and of its accompanying Action Plans, each Presidency, with the support of the Commission and the technical input from EMCDDA and Europol shall address priorities and actions that require follow up in the HDG during its term and shall monitor progress. The Commission, taking into account information provided by the Member States, the European External Action Service (EEAS), and available from the EMCDDA, Europol and other EU bodies, as well as from the civil society, shall provide biannual progress reports, with the purpose of assessing the implementation of objectives and priorities of the EU Drugs Strategy and its Action Plan(s).

               14.

               The Commission, taking into account information provided by the Member States and available from the EMCDDA, Europol, other relevant EU institutions and bodies and civil society, will initiate an external midterm assessment of the Strategy by 2016, in view of preparing a second Action Plan for the period 2017-20. Upon conclusion of the Drugs Strategy and its Action Plans by 2020, the Commission will initiate an overall external evaluation of their implementation. This evaluation should also take into account information gathered from the Member States, the EMCDDA, Europol, other relevant EU institutions and bodies, civil society, and previous evaluations in order to provide input and recommendations for the future development of EU drugs policy.

               15.

               To reach its objectives and to ensure efficiency, the EU Drugs Strategy 2013-20 will use, wherever possible, existing instruments and bodies operating in the drug field, within the respective mandate, or that have relevance for key aspects of it, both within the EU (in particular the EMCDDA, Europol, Eurojust, the European Centre for Disease Prevention and Control (ECDC) and the European Medicines Agency (EMA) and collaboration with bodies outside the EU (such as UNODC, WCO, WHO and the Pompidou Group). The Commission, the High Representative, the Council, the European Parliament will ensure that the EU's activities in the field of illicit drugs are coordinated and that they complement each other.

               16.

               Appropriate and targeted resources should be allocated for the implementation of the objectives of this EU Drugs Strategy at both EU and national level.

         II.   Policy field: drug demand reduction

               17.

               Drug demand reduction consists of a range of equally important and mutually reinforcing measures, including prevention (environmental, universal, selective and indicated), early detection and intervention, risk and harm reduction, treatment, rehabilitation, social reintegration and recovery.

               18.

               In the field of drug demand reduction, the objective of the EU Drugs Strategy 2013-20 is to contribute to the measurable reduction of the use of illicit drugs, to delay the age of onset, to prevent and reduce problem drug use, drug dependence and drug-related health and social risks and harms through an integrated, multidisciplinary and evidence-based approach, and by promoting and safeguarding coherence between health, social and justice policies.

               19.

               In the field of drug demand reduction, the following priorities (not listed in the order of priority) are identified.

                           19.1.

                           Improve the availability, accessibility and coverage of effective and diversified drug demand reduction measures, promote the use and exchange of best practices and develop and implement quality standards in prevention (environmental, universal, selective and indicated), early detection and intervention, risk and harm reduction, treatment, rehabilitation, social reintegration and recovery.

                           19.2.

                           Improve the availability and effectiveness of prevention programmes (from initial impact to long-term sustainability), and raise awareness about the risk of the use of illicit drugs and other psychoactive substances and related consequences. To this end, prevention measures should include early detection and intervention, promotion of healthy lifestyles and targeted prevention (i.e. selective and indicated) directed also at families and communities.

                           19.3.

                           Scale up and develop effective demand reduction measures to respond to challenges such as: polydrug use including the combined use of licit and illicit substances, misuse of prescribed controlled medications and the use of new psychoactive substances.

                           19.4.

                           Invest in and further research on effective risk and harm reduction measures aimed at substantially reducing the number of direct and indirect drug-related deaths and infectious blood-borne diseases, associated with drug use, but not limited to, HIV and viral hepatitis as well as sexually transmittable diseases and tuberculosis.

                           19.5.

                           Expand the availability, accessibility and coverage of effective and diversified drug treatment across the EU to problem and dependent drug users including non-opioids users, so that all those who wish to enter drug treatment can do so, according to relevant needs.

                           19.6.

                           Scale up the development, availability and coverage of drug demand reduction measures in prison settings, as appropriate and based on a proper assessment of the health situation and the needs of prisoners, with the aim of achieving a quality of care equivalent to that provided in the community and in accordance with the right to health care and human dignity as enshrined in the European Convention on Human Rights and the EU Charter of Fundamental Rights. Continuity of care should be ensured at all stages of the criminal justice system and after release.

                           19.7.

                           Develop and expand integrated models of care, covering needs related to mental and/or physical health-related problems, rehabilitation and social support in order to improve and increase the health and social situation, social reintegration and recovery of problem and dependent drug users, including those affected by co-morbidity.

                           19.8.

                           Develop effective and differentiated drug demand reduction measures that aim to reduce and/or delay the onset of drug use and that are appropriate to the needs of specific groups, patterns of drug use and settings, with particular attention to be paid to vulnerable and marginalised groups.

                           19.9.

                           Prevent local and regional drug use epidemics, which may threaten the public health within the EU by ensuring coordinated and effective common approaches.

                           19.10.

                           Drug demand reduction priorities need to take into account the specific characteristics, needs and challenges posed by the drug phenomenon at national and EU level. It is imperative that an appropriate level of resources is provided for that purpose at local, national and EU level.

         III.   Policy field: drug supply reduction

               20.

               Drug supply reduction includes the prevention and dissuasion and disruption of drug-related, in particular organised, crime, through judicial and law enforcement cooperation, interdiction, confiscation of criminal assets, investigations and border management.

               21.

               In the field of drug supply reduction, the objective of the EU Drugs Strategy 2013-20 is to contribute to a measurable reduction of the availability of illicit drugs, through the disruption of illicit drug trafficking, the dismantling of organised crime groups that are involved in drug production and trafficking, efficient use of the criminal justice system, effective intelligence-led law enforcement and increased intelligence sharing. At EU level, emphasis will be placed on large-scale, cross-border and organised drug-related crime.

               22.

               In the field of drug supply reduction, the following priorities (not listed in the order of priority) are identified.

                           22.1.

                           Strengthen the cooperation and coordination between law enforcement agencies at strategic and operational level. This should include, but not be limited to, improving cross-border exchange of information (and intelligence) in real time, best practices and knowledge, as well as conducting joint operations and investigations. Cooperation with third countries as regards tackling drug-related organised crime operating towards and within the EU should be seen as important in this respect.

                           22.2.

                           Reduce intra-EU and cross-border production, smuggling, trafficking, distribution and sale of illicit drugs and the facilitation of such activities, as well as reduce the diversion of drug precursors, pre-precursors and other essential chemicals used in the illicit manufacture of drugs.

                           22.3.

                           Respond effectively to the evolving trends, such as the diversion of certain chemicals utilised as cutting agents for illicit drugs and the supply of drugs through the use of new technology.

                           22.4.

                           Special attention must be given to new communication technologies as having a significant role as a facilitation for the production, marketing, trafficking and distribution of drugs (including controlled new psychoactive substances).

                           22.5.

                           Member States shall continue to cooperate, and coordinate — where appropriate — their actions at EU level, together with relevant EU and international bodies and agencies, such as Europol, Eurojust, EMCDDA and fully exploit existing instruments and methods provided in the field of judicial and law enforcement cooperation, such as intelligence-led policing, drug profiling, Joint Investigation Teams, Joint Customs and Police Operations and relevant initiatives such as the EMPACT projects, Liaison Officer Platforms and through the use of regional platforms.

                           22.6.

                           At EU level, emphasis shall be placed on intelligence-led law enforcement aimed at targeting large-scale drug production and trafficking. Closer coordination and cooperation between law enforcement agencies within and between Member States as well as with Europol should be further strengthened.

                           22.7.

                           Where necessary, when such tasks are not initiated or implemented through Europol, ad hoc regional collaboration initiatives or platforms may be created within the EU, to counter emerging threats from shifting drug trafficking routes and emerging organised crime hubs. This shall be done by means of coordinated operation responses. Such actions need to be compatible with and complementary to existing legal and operational arrangements at EU level and shall be based on threat assessments and analysis. Such cooperation structures should be flexible, may have a temporary lifespan depending on the future development of the specific threat that they address and work in close cooperation with all relevant EU agencies and platforms, in particular with Europol.

                           22.8.

                           Strengthen, where deemed necessary, the EU drug-related judicial and law enforcement cooperation and the use of existing practices by establishing faster and more accurate responses. Support judicial and law enforcement cooperation activities and exchange of information and intelligence.

                           22.9.

                           Reinforce the European Union’s legislative framework in a targeted way as deemed necessary so as to strengthen the EU response in dealing with new trends, ensure that collaborative efforts complement each other with a view to dismantle cross-border organised crime groups, confiscate the proceeds of drug-related crime by fully utilising the EU network of asset recovery offices and thus ensure a more effective response to drug trafficking. The further development of relevant law enforcement instruments can be explored.

                           22.10.

                           The EU shall work towards more effective policies in the field of drug supply reduction, by reinforcing policy evaluation and analysis to improve the understanding of drug-markets, drug-related crimes and the effectiveness of drug-related law enforcement responses.

                           22.11.

                           In order to prevent crime, avoid recidivism and enhance the efficiency and effectiveness of the criminal justice system while ensuring proportionality, the EU shall encourage, where appropriate, the use, monitoring and effective implementation of drug policies and programmes including arrest referral and appropriate alternatives to coercive sanctions (such as education, treatment, rehabilitation, aftercare and social reintegration) for drug-using offenders.

         IV.   Cross-cutting theme: coordination

               23.

               In the field of EU drugs policy, the objective of coordination is twofold, namely to ensure synergies, communication and an effective exchange of information and views in support of the policy objectives, while at the same time encouraging an active political discourse and analysis of developments and challenges in the field of drugs at EU and international levels.
               Coordination is required within and among EU institutions, Member States, other relevant European bodies and civil society on the one hand, and between the EU, international bodies and third countries on the other hand.

               24.

               In the field of coordination, the following priorities (not listed in the order of priority) are identified.

                           24.1.

                           Ensure synergies, coherence and effective working practices among relevant Member States, EU institutions, bodies and initiatives, based on the principle of sincere cooperation (3), avoiding duplication of efforts, securing efficient exchange of information, using resources effectively and guaranteeing continuity of actions across Presidencies.

                           24.2.

                           Given the role of the HDG as the main drugs coordinating body within the Council, its coordinating efforts need to be further strengthened to take account of the work of the various bodies, that include a drugs component such as the Standing Committee on Operational Cooperation on Internal Security (COSI) and the Working Party on Public Health. In addition, the balanced approach to the drugs problem, targeting with equal vigour the demand for and the supply of drugs, requires close cooperation, interaction and information exchange with relevant other Council preparatory bodies including those in the area of external action and other relevant EU initiatives, in the areas of judicial and criminal matters, law enforcement, public health, social affairs.

                           24.3.

                           Ensure that the EU and Member States further develop and implement working methods and best practices for multidisciplinary cooperation in support of the objectives of the Strategy and that these are promoted at national level.

                           24.4.

                           Provide opportunities under each Presidency to discuss, monitor and evaluate issues of coordination, cooperation, emerging trends, effective interventions and other policy developments of added value to the EU Drugs Strategy for instance during the National Drugs Coordinators’ Meetings.

                           24.5.

                           Promote and encourage the active and meaningful participation and involvement of civil society, including non-governmental organisations as well as young people, drug users and clients of drug-related services, in the development and implementation of drug policies, at national, EU and international level. Also to ensure the engagement with the EU Civil Society Forum on Drugs at EU and international level.

                           24.6.

                           Ensure that the EU speaks with one strong voice in international forums such as the Commission on Narcotic Drugs (CND) and in dialogues with third countries, promoting the integrated, balanced and evidence-based EU approach to drugs. In this framework, the EU Delegations can play a useful role in promoting such approach in the field of drugs and in facilitating a coherent discourse on drugs policy.

         V.   Cross-cutting theme: international cooperation

               25.

               International cooperation is a key area where the EU adds value to Member States efforts in coordinating drug policies and addressing challenges. The EU external relations in the field of drugs are based on the principles of shared responsibility, multilateralism, an integrated, balanced and evidence-based approach, the mainstreaming of development, respect for human rights and human dignity and respect for international conventions.

               26.

               The objective of the EU Drugs Strategy 2013-20 in the field of international cooperation, is to further strengthen dialogue and cooperation between the EU and third countries and international organisations on drug issues in a comprehensive and balanced manner.

               27.

               The EU Drugs Strategy is part of an overall approach that enables the EU to speak with one voice in the international arena and with the partner countries. The EU will remain committed to international cooperation and debate on the fundamentals of drug policy, and actively share the achievements of the EU approach in drug policy that is balanced between drug demand reduction and drug supply reduction, based on scientific evidence and intelligence as well as respecting human rights.
               This requires coherence between policies and actions at the EU level, including external cooperation on drug demand reduction, including risk and harm reduction, drug supply reduction, alternative development, the exchange and transfer of knowledge and the involvement of both state and non-state actors.

               28.

               The EU and its Member States should guarantee the integration of the EU Drugs Strategy and its objectives within the EU's overall foreign policy framework as part of a comprehensive approach that makes full use of the variety of policies and diplomatic, political and financial instruments at the EU's disposal in a coherent and coordinated manner. The High Representative supported by the EEAS should facilitate this process.

               29.

               The EU external action approach in the field of drugs aims to further strengthen and support third countries' efforts to deal with the challenges to public health, safety and security. This will be done through the implementation of initiatives set out in this Strategy and subsequent action plans, including alternative development, drug demand reduction, drug supply reduction, the promotion and protection of human rights and also taking into account regional initiatives. Given the impact of drug production and trafficking on the internal stability and security situation in source and transit countries, actions will also target corruption, money laundering and the proceeds of drug-related crime.

               30.

               In the field of international cooperation, the following priorities (not listed in the order of priority) are identified.

                           30.1.

                           Improve coherence between the internal and external aspects of the EU drugs policies and responses towards third countries in the field of drugs.

                           30.2.

                           Increase the EU's engagement and coordination in the international drug policy discourse, both in respect of negotiations with international organisations and structures including the UN, G8 and the Council of Europe and relations with third countries by achieving common EU positions, and ensure an effective role within the UN drug policy process.

                           30.3.

                           Ensure that international cooperation in the field of drugs is integrated within the overall political relations and framework agreements between the EU and its partners, both at national and/or regional level. It should reflect the integrated, balanced and evidence-based EU approach and include: political dialogue, drug coordination, demand reduction (including risk and harm reduction), supply reduction including alternative development and law enforcement, integration of drug policies within the broader development cooperation agenda, information, research, monitoring and evaluation.

                           30.4.

                           Ensure that the EU international response and actions in priority third countries and regions around the world are comprehensive taking into account every dimension of the drug phenomenon, and address the development, stability and security of these countries and regions through enhanced partnership.

                           30.5.

                           Ensure that the EU international drug response is evidence-based and includes a monitoring process on the situation and progress involving different information tools from the Commission, EEAS, including the EU Delegations, Member States, EMCDDA, Europol, Eurojust and the European Centre for Disease Prevention and Control in close cooperation with UNODC.

                           30.6.

                           Ensure that support to the candidate and potential candidate countries, and the countries of the European Neighbourhood Policy, focuses on capacity-building on both supply and demand reduction and evidence-based, effective and balanced drug policies, through strengthened cooperation including sharing of EU best practices and participation, where appropriate, in EU agencies, such as the EMCDDA, Europol and Eurojust.

                           30.7.

                           Ensure a sustainable level of policy dialogue and information sharing on the strategies, aims and relevant initiatives through the dialogues on drugs with international partners, both at regional and bilateral level. Key partners are identified on the basis of their status of cooperation with the EU and their relevance in addressing the global illicit drug phenomenon while taking account of partners emerging as a result of developments in the drug situation. The Political Dialogues should be complementary to and coherent with other external cooperation structures and their impact and, where appropriate, provide a forum for discussing priorities on cooperation and progress on EU-funded projects.

                           30.8.

                           Ensure an appropriate level of funding and expertise (provided for by the EU and its Member States) including by reinforcing coordination, monitoring and evaluation of financial and technical support, while striving for synergies and by continuously balancing the transparent allocation of cooperation, resources, financial and technical assistance, between drug demand and drug supply reduction measures reflecting the EU approach. The EU should work towards providing relevant expertise in EU Delegations to support the implementation of measures targeting third countries in the field of drugs. The midterm review and final assessment of this EU Drugs Strategy should reflect on the impact of EU spending in third countries and the Commission and the EEAS should provide updates on priorities and progress on the EU spending overseas to Member States when appropriate.

                           30.9.

                           When providing financial and technical support to source countries, the EU and Member States shall ensure, in particular, that alternative development programmes:

                                       —

                                       are non-conditional, non-discriminating and, if eradication is scheduled, properly sequenced,

                                       —

                                       set realistic rural development-related objectives and indicators for success, ensuring ownership among target communities and

                                       —

                                       support local development, while considering interactions with factors such as human security, governance, violence, human rights, development and food security.

                           30.10.

                           Ensure that the protection of human rights is fully integrated in political dialogues and in the implementation and delivery of relevant programs and projects in the field of drugs.

         VI.   Cross-cutting theme: information, research, monitoring and evaluation

               31.

               The objective of the EU Drugs Strategy 2013-20 in the field of information, research, monitoring and evaluation is to contribute to a better understanding of all aspects of the drugs phenomenon and of the impact of measures in order to provide sound and comprehensive evidence for policies and actions. Furthermore, the EU Drugs Strategy 2013-20 aims to contribute to a better dissemination of monitoring, research and evaluation results at EU and national level ensuring the strengthening of synergies, a balanced allocation of financial resources and avoiding duplication of efforts. This can be achieved through harmonisation of methodologies, networking and closer cooperation.

               32.

               In the field of information, research, monitoring and evaluation the following priorities (not listed in the order of priority) are identified.

                           32.1.

                           The EU and its Member States should continue to invest in information exchange, data collection and monitoring, and in research and evaluation of the drug situation and responses to it at national and EU level. This should cover all relevant aspects of the drug phenomenon, including drug demand and drug supply. Particular emphasis should be placed on maintaining and further enhancing data collection and reporting through the EMCDDA key indicators in drug demand reduction.

                           32.2.

                           The EMCDDA should, within its mandate, further enhance the knowledge infrastructure and should continue to play a key role as the central facilitator, supporter and provider of information, research, monitoring and evaluation of illicit drugs across the EU. It should continue to provide a timely, holistic and comprehensive analysis of the European drugs situation and of responses to it, and collaborate with other relevant agencies, including, when relevant and appropriate, the European Centre for Disease Control (ECDC) and the European Medicines Agency (EMA) and WHO.

                           32.3.

                           Europol should continue its efforts as regards information gathering and analysis in the area of drug-related organised crime, while Member States should deliver relevant information to the Agency. The Agency should continue the regular delivery of threat assessment reports (e.g. EU SOCTA) on EU drug-related organised crime.

                           32.4.

                           Member States, EU institutions and agencies should enhance information and data collection on all aspects of drug supply, including on drug markets, drug-related crimes and drug supply reduction with the aim to improve analysis and informed decision making. Member States, the Commission, EMCDDA, Europol and — where appropriate — other EU agencies should work together to improve data collection and the development of policy-relevant and scientifically sound indicators.

                           32.5.

                           The EU institutions, bodies and Member States should improve the capacity to detect, assess and respond rapidly and effectively to the emergence of new psychoactive substances, to behavioural changes in drugs consumption and epidemic outbreaks and to other emerging trends that pose risks to public health and safety. This can be achieved, inter alia, through the strengthening of existing EU legislation, the exchange of information, intelligence, knowledge and best practices.

                           32.6.

                           Member States, EU institutions and agencies should promote and support research, including applied research, into new psychoactive substances and ensure cooperation and coordination between networks at national and EU level in order to strengthen the understanding of the phenomenon. Monitoring in this area should be scaled up in close coordination with the EMCDDA. In particular, emphasis should be placed on developing forensic and toxicological capacity as well as on improving the availability of epidemiological information.

                           32.7.

                           Member States should continue efforts to maintain the achievements made within the EU in terms of monitoring and information exchange, including through the Reitox Network of National Focal Points, while supporting the further development of EU standardised data collection and analysis in the areas of drug demand and drug supply.

                           32.8.

                           Ensure adequate financing for drug-related research and development projects at EU and national level, according to financial resources including through the EU financial programmes covering the period 2014-20. Projects supported at EU level should take into account the priorities of the Strategy and its Action Plans and deliver a clear EU added value, ensuring coherence and synergies while avoiding duplication within programmes and with EU bodies.

                           32.9.

                           EU institutions, bodies and Member States should recognise the role of scientific evaluation of policies and interventions (with a focus on outcomes achieved) as a key element in strengthening of the EU approach to drugs, and should promote its use both at national, EU and international level.

                           32.10.

                           Ensure and reinforce training of professionals involved with drug-related issues, both in the drug demand as well as the drug supply reduction field.

      (1)  The UN Single Convention on Narcotic Drugs of 1961 as amended by the 1972 protocol, the Convention on Psychotropic Substances (1971) and the Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988).

      (2)  Report on the independent assessment of the EU Drugs Strategy 2005-12 and its action plans (http://ec.europa.eu/justice/anti-drugs/files/rand_final_report_eu_drug_strategy_2005-2012_en.pdf)

      (3)  TEU article 4.