				|

		52011SC0802

			Recommendation for a COUNCIL RECOMMENDATION on the National Reform Programme 2011 of Belgiumand delivering a Council opinion on the updated Stability Programme of Belgium 2011-2014 /* SEC/2011/0802 final  */

			   	Recommendation for a
COUNCIL RECOMMENDATION
on the National Reform Programme 2011 of
Belgium
and delivering a Council opinion
on the updated Stability Programme of Belgium 2011-2014
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(3) thereof,
Having regard to the recommendation of the
European Commission[2],
Having regard to the conclusions of the
European Council,
Having regard to the opinion of the
Employment Committee,
After consulting the Economic and Financial
Committee,
Whereas:
(1)
On 26 March 2010, the European Council agreed to
the European Commission’s proposal to launch a new strategy for jobs and
growth, 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 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,[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 12 January 2011, the Commission adopted the
first Annual Growth Survey, marking the start of a new cycle of economic
governance in the EU and the first European semester of ex-ante and integrated
policy coordination, which is anchored in the Europe 2020 strategy.
(4)
On 25 March 2011, the European Council endorsed
the priorities for fiscal consolidation and structural reform (in line with the
Council’s conclusions of 15 February and 7 March 2011 and further to the
Commission’s Annual Growth Survey). It underscored the need to give priority to
restoring sound budgets and fiscal sustainability, reducing unemployment
through labour market reforms and making new efforts to enhance growth. It
requested Member States to translate these priorities into concrete measures to
be included in their Stability or Convergence Programmes and National Reform
Programmes.
(5)
On 25 March 2011, the European Council also
invited the Member States participating in the Euro Plus Pact to present their
commitments in time to be included in their Stability or Convergence Programmes
and their National Reform Programmes.
(6)
On 15 April 2011, Belgium submitted its 2011
Stability Programme update covering the period 2011-2014 and its 2011 National
Reform Programme. In order to take account of the interlinkages, the two
programmes have been assessed at the same time.
(7)
Belgium experienced robust GDP growth averaging
2.3 % per year in the decade before 2008. The country felt the full impact
of the global economic recession in 2009, and GDP contracted by 2.8 %. The
impact of the recession on employment was relatively contained. A temporary
decline in hours worked and a decline in labour productivity per hour provided
a buffer. After a decrease of 0.4 % in 2009, employment increased again in
2010. However, unemployment rose from 7 % before the recession to 8.3 %
in 2010. Thanks to the upturn in world trade, the recovery in 2010 was stronger
than expected, with GDP growing by 2.2 %. Due to the automatic stabilisers
and the discretionary measures taken in reaction to the crisis, the general
government deficit rose from 1.3 % in 2008 to 5.9 % of GDP in 2009.
(8)
Based on the assessment of the updated Stability
Programme pursuant to Council Regulation (EC) No 1466/97, the Council is
of the opinion that the macroeconomic scenario
underpinning the budgetary projections in the Programme is plausible. Although
it is based on slightly less favourable growth assumptions for 2011, it is
broadly in line with the latest Commission’s Spring 2011 forecast. After a
better-than-expected deficit of 4.1 % in 2010, the objective of the
budgetary strategy outlined in the programme is to further reduce the deficit
to 3.6 % in 2011 and below the 3 % reference value by 2012, the deadline
set by the Council for correcting the excessive deficit. The reduction in the
deficit planned for 2011 seems feasible in view of the rather cautious economic
projections. However, the fiscal effort is likely to be below the 0.75 %
of GDP average annual effort recommended by the Council, in particular in 2011
and 2012 when it would only amount to 0.4 and 0.3 % of GDP in structural
terms respectively. Moreover, the deficit targets for 2012 and subsequent years
are not supported by specific adjustment measures. Lastly, the medium-term
objective, which is a structural surplus of 0.5 % of GDP, is not expected
to be achieved within the 2011-2014 programme period.
(9)
In view of the better-than-expected outcome
recorded in 2010, a more ambitious reduction in the deficit in 2011, and
faster-than-projected progress towards the 3 % of GDP threshold, would be
appropriate. Moreover, it will not be possible to bring the excessive deficit
to an end by 2012 and to continue to make progress towards the medium-term
objective without further consolidation measures. Since the tax burden,
especially that on labour income, is already very high in Belgium, these
consolidation measures should be essentially expenditure-based.
(10)
The economic and financial crisis reversed the
previous long-term trend of declining government debt. The debt ratio, which
had been on a downward trend since 1993 (when it peaked at 134 % of GDP,
after which it continued falling to 84 % of GDP in 2007), has increased
again since 2008 and reached 96.8 % of GDP at the end of 2010. The high
level of public debt remains a major challenge, in particular because the
long-term budgetary impact of ageing is higher than the EU average, mainly as a
result of a relatively high increase in pension expenditure, which will put
further strains on public finances. Ensuring sufficient primary surpluses over
the medium-term and further reforming the Belgian social security system, in
particular the pension system, to curb the projected substantial increase in
age-related expenditure, should improve the long-term sustainability of public
finances.
(11)
An important challenge for Belgium is to ensure
a stable and well-functioning financial sector, capable of meeting the
financial intermediation needs of the real economy. During the past two years,
the Belgian financial sector has been severely hit by the financial crisis,
resulting in reduced balance sheets, substantial state aid and a modification
of banking supervision. The financial situation of the banking sector remains
fragile. Furthermore, in Belgium the banking sector is highly concentrated and
relatively large compared to the size of the economy.
(12)
The 1996 Law on ‘Employment Promotion and
Precautionary Protection of Competitiveness’ stipulates that the trend in wages
in Belgium should be in line with the wage trend in the three neighbouring
countries (France, Germany, The Netherlands), thereby keeping labour costs
under control. Nevertheless, this law has not been able to prevent a situation
where, over the period 2005-2010, wages have increased faster in Belgium than
in the three neighbouring countries, while productivity growth has been slower.
As a consequence, unit labour costs have risen at a faster rate in Belgium
compared to its neighbouring countries and the euro-area average. This is
particularly problematic as Belgium is specialised in goods
with relatively low technology content, facing fierce
competition from lower-cost countries. Even though the wage rule helps to frame
the wage negotiations, it could be improved by taking into account differences
in productivity growth and by providing a more effective system to implement
corrections ex post if the targets are not met.
(13)
The labour market is characterised by a number
of rigidities that create significant disincentives to taking up work, namely:
unlimited unemployment benefit duration; high effective marginal tax rates and
high tax wedge (particularly for low paid workers); and the combination of the
withdrawal of social assistance benefits and high taxation when taking up work.
Moreover, several exit routes for older workers provide incentives to leave the
labour market before the statutory retirement age of 65. Further reform of
active labour market policies, and extending them to cover the over 50, would
help increase the overall employment rate and improve incentives to look for
jobs. In addition, further decreases in the level and duration of unemployment
benefits over time would provide younger workers with a greater incentive to
enter the labour market. Making the access criteria for early retirement more
stringent would encourage older workers to stay within the active labour force,
and older workers who have been out of work for a period of time to return to
the labour market. Lastly, non-EU nationals have an employment rate (40.9 %)
much lower than the EU average.
(14)
The overall tax burden on labour in Belgium is
one of the highest in the EU; therefore, its reduction would contribute to
making work more attractive. However, given the substantial consolidation
effort ahead, this needs to be compensated by equivalent increases in less
distorting taxes, for example on consumption or by means of a shift towards
environmentally-friendly taxes. Belgium has much lower implicit tax rates on
energy than neighbouring countries. Combined with the high tax wedge on labour,
Belgium has the lowest ratio of environmental taxes compared with labour taxes
in the whole of the EU. This has contributed to a situation where high
unemployment coexists with a relatively high use of energy, making it more
difficult to achieve targets on employment and energy efficiency.
(15)
Prices for many goods and services are generally
higher than in other Member States, reflecting weak competitive pressures — especially in the retail sector and network
industries — and a weak supervisory framework.
In the retail sector, barriers to entry and operational
restrictions are high. In particular, competition-restricting regulations still
restrict opening hours, protect incumbents against new entry and inhibit the
spread of new business models and technologies. A
common competition problem in the network sectors in Belgium is the strong
position of the incumbent and the high entry barriers compared to other Member
States, meaning that former monopolists in these sectors can still reap higher
profits by charging higher prices than a competitive market would allow.
(16)
The Belgian authorities have made a number of
commitments related to the Euro Plus Pact[4]. The
commitments refer to the four areas of the Pact. They focus on measures to
bring down the deficit, keep energy prices under control and encourage
competition, control real wage increases, implement a supervisory framework to
monitor the financial sector and introduce measures to increase the effective
retirement age. However, there is no information on the measures to be taken in
order to achieve the required objective on the fiscal side; nor is there any
information on how real wage growth or energy prices could be controlled.
Concerning early retirement schemes, it is not clear whether and when the
'Generation Pact' will be reviewed and what the impact of that review would be
in terms of concrete measures. These commitments have been assessed and taken
into account in the recommendations.
(17)
The Commission has assessed the Stability
Programme and National Reform Programme, including the Euro Plus Pact[5].
It has taken into account their relevance for sustainable fiscal and
socio-economic policy in Belgium, and 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. In this
light, the Commission considers that a more ambitious reduction of the deficit
in 2011 should be possible, and that further consolidation measures should be
specified for 2012 and beyond. In order to improve the long-term sustainability
of public finances, further reform of the pension system is needed. Further
steps should also be taken to strengthen competitiveness, to help people into
jobs and to shift the tax burden from labour to consumption and energy, as well
as opening up more opportunities for investment and growth in the service
sector and network industries.
(18)
In the light of this assessment, also taking
into account the Council Recommendation of 2 December 2009 under Article 126(7)
of the Treaty on the Functioning of the European Union, the Council has
examined the 2011 update of the Stability Programme of Belgium and its opinion[6]
is reflected in particular in its recommendation under (1) and (2) below,
HEREBY RECOMMENDS that Belgium
should take action within the period 2011-2012 to:
(1)
Take advantage of the ongoing economic recovery
to accelerate the correction of the excessive deficit. To this end, take the
necessary measures — mainly on the expenditure side — by the time of the 2012
budget to achieve an average structural effort of at least 0.75% of GDP. This
should bring the government deficit well below the 3 % of the GDP
reference value by 2012 at the latest. Ensure progress towards the Medium Term
Objective by at least 0.5% of GDP annually.
(2)
Take steps to improve the long-term
sustainability of public finances. The focus should be on putting in place a
strategy aimed at curbing age-related expenditure, including by preventing early
exit from the labour market in order to increase the effective retirement age,
and linking the statutory retirement age to life expectancy.
(3)
Address the structural weaknesses in the
financial sector, in particular by finalising restructuring of the banks in
need of an adequately funded and viable business model.
(4)
Reform, in consultation with the social partners
and in accordance with national practice, the system of wage bargaining and wage indexation, to ensure that
wage growth better reflects developments in labour productivity and
competitiveness.
(5)
Improve participation in the labour market by
reducing the high tax and social security burden for the low-paid in a
budgetary neutral way and by introducing a system in which the level of
unemployment benefits decreases gradually with the duration of unemployment.
Take steps to shift the tax burden from labour to consumption and to make the
tax system more environmentally friendly. Improve the effectiveness of active
labour policies by targeting measures at older workers and vulnerable groups.
(6)
Introduce measures to boost competition in the
retail sector, by lowering barriers to entry and reducing operational
restrictions; and introduce measures to strengthen competition in the
electricity and gas markets by further improving the
effectiveness of the sectoral regulatory and competition authorities.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 2.8.1997, p. 1.
[2]               OJ C , p. .
[3]               Maintained for 2011 by Council Decision 2011/308/EU
of 19 May 2011.
[4]               More details on the commitments made under the Euro
Plus Pact can be found in SEC(2011) 710.
[5]               SEC(2011) 710.
[6]               Foreseen in Article 5(3) of Council Regulation (EC)
No 1466/97.


				|

		52014DC0410

			Recommendation for a COUNCIL RECOMMENDATION on Spain’s 2014 national reform programme and delivering a Council opinion on Spain’s 2014 stability programme /* COM/2014/0410 final */

Recommendation for a
COUNCIL RECOMMENDATION
on Spain’s 2014 national reform programme
and delivering a Council opinion on Spain’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 Spain’s national reform programme for 2013 and delivered its
opinion on Spain’s updated stability programme for 2012-2016. On 15 November
2013, in line with Regulation (EU) No 473/2013[5], the Commission presented its opinion on Spain'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 Spain 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 Spain[9],
under Article 5 of Regulation (EU) No 1176/2011. The Commission's analysis leads
it to conclude that Spain is experiencing macroeconomic imbalances which
require specific monitoring and decisive policy action. In particular, in
several areas, the adjustment of the imbalances identified last year as
excessive has clearly advanced and the return to positive growth has reduced
risks. However, the magnitude and inter-related nature of the imbalances, in
particular high domestic and external debt levels and high unemployment, mean
that vulnerabilities are still present.
(8)
On 30 April 2014, Spain submitted its 2014 national
reform programme and 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 by 2016 and
reach the medium-term objective in 2017. The programme confirms the medium-term
objective of a balanced budgetary position in structural terms, which is more
stringent than what the Stability and Growth Pact requires. The programme plans
to bring the deficit below 3% of GDP in 2016, in line with the target set in
the Council recommendation of 21 June 2013, but the annual improvement of the
(recalculated) structural balance planned in the programme falls below the
recommended effort as of 2014. For 2017, the plan envisages sufficient progress
towards the medium-term objective, although this may not be enough to reach it
in the same year as declared in the programme. The programme projects the
government debt ratio to peak in 2015 at 101.7% of GDP and to start declining
thereafter. Overall, the budgetary strategy outlined in the programme is only
partly 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 produced or endorsed by an independent body, is broadly
plausible for 2014 and subject to downside risks in 2015 when compared with the
Commission 2014 spring forecast. For 2016-2017, the GDP growth rates in the
programme seem somewhat optimistic when seen against current estimates of the
potential growth rate of the economy and the remaining post-crisis economic
adjustment needs. Therefore, the deficit and debt adjustment paths are also subject
to downside risks. Moreover, concrete measures to support the headline deficit
targets from 2015 onwards are not yet sufficiently specified, especially
regarding the changes to tax legislation within the framework of the planned
tax reform. Other risks relate to contingent liabilities and the yields of planned
savings at local and regional level. Based on the Commission forecast, the
fiscal effort over 2013-2014 falls short by 1.1 pp. in terms of (corrected)
change in the structural balance (although this figure is inflated by recent
changes in the methodology for the estimation of potential output) and by 0.4
pp. compared to the amount of measures estimated as necessary at the time of
the recommendation under the Excessive Deficit Procedure. Based on its
assessment of the programme and the Commission forecast, pursuant to Council
Regulation (EC) No 1466/97, the Council is of the opinion that the measures
underpinning the budgetary strategy need to be specified further and that
additional efforts are needed to fully comply with the Council recommendation
under the Excessive Deficit Procedure.
(10)
On the fiscal structural side, there has been
progress in the reporting of budgetary execution and in the application of
corrective measures to non-compliant administrative bodies; however, there
remains scope for implementing additional enforcement mechanisms, set out in
Spain's Budgetary Stability Organic Law, for non-compliant regions. New
measures have been taken to enforce an average period for payments to
commercial suppliers of 30 days across all levels of government. An independent
fiscal institution was set up by law in November 2013 and its president
appointed in February 2014. However, the institution was not operational in
time to assess the 2014 stability programme. The 2014 national reform programme
also acknowledges the need to keep improving cost-effectiveness in healthcare
and pharmaceutical expenditure, e.g. by centralising purchasing of
pharmaceutical products, revising the basket of services, developing digital
clinical records, or strengthening management of health establishments. With
most of the fiscal consolidation ahead planned to come from expenditure
savings, a systematic review of expenditure at all government levels, would
help to identify areas where savings could be generated in a growth-friendly
way while catering for the needs of the most vulnerable.
(11)
In 2013, Spain adopted new measures to address
the debt bias in corporate taxation. During 2013, Spain also made some progress
on improving tax compliance by intensifying the fight against tax fraud and
undeclared work, but important challenges remain. In 2013 and 2014, Spain also introduced
reductions in social security contributions for hiring young and new employees.
Following the delivery of a comprehensive report on tax reform by an Expert
Committee commissioned by the government, the authorities plan to present
concrete legislative proposals in the second quarter of 2014. According to the
2014 National Reform Programme, the proposals will aim at modernizing the tax
system, reduce the bias against employment, foster revenue collection, favour
economic development, ensure market unity and fiscal neutrality and enhance the
competitiveness of the Spanish economy while contributing to fiscal
consolidation. The design and implementation of this reform will be important
to future economic prospects and public finances.
(12)
Financial stability has been bolstered by the
recapitalisation and restructuring of the banking sector and the thorough
implementation of the July 2012 ESM programme for the recapitalisation of financial
institutions, completed on 22 January 2014. Yet, the financial sector in Spain
is still faced with significant challenges that need to be carefully monitored
and managed. Moreover, improvements in the funding conditions of banks are
being passed only gradually to the financing of SMEs. Going forward, it is
important to ensure that credit continues to flow to viable sectors of the
economy as the deleveraging of the private sector continues. The authorities have
taken several measures to improve access of firms to bank and non-bank
financing and facilitate corporate debt restructuring, but further policy
actions mare needed.
(13)
The labour market is showing some signs of
stabilisation and a mild recovery is expected in 2014 with growing employment
and decreasing unemployment levels. However, with an annual average of 26.1% in
2013, the unemployment rate remains very high. Of particular concern are the
high youth unemployment rate of 54.3%, and the significant peak of long-term
unemployment at 49.7% of total unemployment in 2013, the latter with
particularly high rates among older and the low-skilled workers. Available
evaluations of the 2012 labour market reform conclude that the reform, together
with the social partners' commitment to wage moderation in 2012-14, has helped to
provide firms with greater internal flexibility and limit job losses, prioritising
collective bargaining agreements at firm level and enhancing possibilities for
firms to opt out of a collective agreement. The reform has also reduced the compensation
costs for unfair dismissal and contributed to a lowering the number of
dismissals challenged in court, and introduced new contract to promote stable
hiring in SMEs. Further measures were introduced in 2013 and early 2014 to
facilitate stable part-time employment, and reducing temporarily social
security contributions on new indefinite contracts. However, segmentation
remains an important challenge for the Spanish labour market, the number of
contract types remains high and the gap between severance costs for fixed-term
and indefinite contracts remains among the highest in the EU even after the
reform. Progress has been made in the reform of active labour market policies,
including the approval of the annual Employment Plan (PAPE). However, action to
modernise and reinforce the public employment service seems to be lagging
behind, which threatens to hinder the successful implementation of the new
framework. The full operationalisation of the single job portal has suffered
delays. Progress has been made in fostering cooperation with private placement
agencies, but further efforts are needed.
(14)
The inadequate labour-market relevance of
education and training and the high proportion of unemployed without formal
qualifications (35.2%) contribute to the high youth unemployment rate, as well
as to long term unemployment. The rate of young people not in employment,
education or training remains higher than the EU average and has been
increasing sharply. The proportion of pupils and students leaving education and
training early, although decreasing, also remains very high (23.5%). Tertiary
attainment rates are sustained, but vocational education and training and
apprenticeship schemes are still under-used and the proficiency of upper
secondary vocational education and training graduates lags behind the EU
average. Spain is also working on measures to encourage youth employment. The
national 2013-2016 Youth Employment and Entrepreneurship Strategy, presented in
March 2013 is now being implemented, although some measures have yet to be put
in place. Building on the Strategy, Spain has undertaken steps to fight youth
unemployment, in line with the objectives of a youth guarantee. Some progress
has been registered in measures to fight early school leaving and to promote
dual vocational education and training, but full implementation and efficient
use of funding remain crucial. On dual vocational training, continued
coordination among all stakeholders, including decision makers and training
providers at all government levels and employers, is needed to streamline the
system, favour a better match of training to labour demands and guarantee the
compatibility of dual vocational education and training models across regions.
(15)
Mainly as a result of the labour market situation,
but also due to the limited effectiveness of social protection in reducing
poverty, Spain is below the EU average as regards the main indicators measuring
poverty and social exclusion, with children and young adults being particularly
exposed. As a result of the crisis, Spain also witnessed one of the highest
falls in household disposable income and one of the highest levels of income
inequality in the EU. The key challenges are to simplify procedures for social
assistance claimants and improve governance and inter-institutional
coordination at national, regional and local level. The 2013-2016 National
Action Plan for Social Inclusion provides an appropriate policy framework for
adapting active labour market policies to those further away from the labour
market, tackling child poverty and improving the efficiency of family support
services. Moreover, social assistance and benefits have limited redistributive
effects across different groups at risk, suggesting poor targeting. In
addition, limited coordination between employment and social services
(including those at regional and local levels) and the administrative burden involved
in accessing minimum income schemes hinders the smooth transition between
social assistance and the reintegration into the labour market.
(16)
Spain made progress on structural reforms
promoting growth and competitiveness broadly in line with the plans in the 2013
national reform programme. The law on the guarantee of market unity was adopted
in December 2013 and its complex implementation is ongoing. The law on
entrepreneurship adopted in autumn 2013, has also brought improvements to the
framework for corporate insolvency and more flexible company forms, and as
regards the rationalisation of support schemes for the
internationalisation of firms. The use of the express licensing has been
extended thus simplifying the opening of small-scale retail outlets, and other
measures taken to facilitate business licensing. However, secondary legislation
to allow private limited companies to be created through one-stop shops within
the shorter deadlines set out in the September 2013 entrepreneurship law are
still pending.  Moreover, there is a case for the continuous review of
regulatory barriers to company growth, including on taxation, given Spain's gap
vis-à-vis other euro area countries as regards company size. The long-awaited reform
of professional services has been cumulating delays and needs to be speeded up.
No measures have been taken to remove restrictions to the establishment of
large-scale retail premises. The Spanish R&I system needs to increase the quality
of its scientific outputs, foster public-private co-operation and facilitate the
conversion of research and innovation into commercial products. In 2013, the
Spanish government adopted a national strategy for science, technology and
innovation, which still needs to be backed by public funding. Moreover, the
creation of the new State Research Agency, which is tasked with the efficient
management of public R&D investment, is pending.
(17)
Significant steps have been taken to address the
electricity tariff deficit, especially by reducing the system's costs, although
the exact impact of the reform, in particular on renewables, is not yet fully
clear. The government is exploring ways to minimise negative spillover effects
on public finances from insolvent toll motorways. The authorities established a
database containing economic, environmental, traffic-related and other
indicators supporting analysis prior to investment in infrastructure, but have
not yet set up an independent observatory to help assess future major
infrastructure projects. Effective competition in railway passenger and freight
services is still prevented by technical and legal obstacles, hampering the
efficient use of the extensive infrastructure stock.
(18)
The reform of public administration is advancing.
A reform of local public administration was passed in December 2013 and the
implementation of the expert's committee on public administration reform is
on-going and will continue throughout 2014-15. Judicial reform is at various
stages of completion and/or implementation and needs to be completed. Recent
efforts in the area of tackling corruption include the law on transparency,
public access to information and good governance, adopted in December 2013, as
well as two draft bills on supervision of party funding and accountability of
high ranking officials. The 2012-2014 National Plan against Irregular Work and
Social Security Fraud is being implemented. Spain has also extended its network
of international agreements to exchange information relevant for tax
assessments and launched a project with private firms to study potential
improvements in the management of the benefits system.
(19)
In the context of the European Semester, the
Commission has carried out a comprehensive analysis of Spain’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 Spain 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 (8) below.
(20)
In the light of this assessment, the Council has
examined Spain’s stability programme, and its opinion[10] is reflected in
particular in recommendation (1) below.
(21)
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), (2), (3), (4), (6), (7) and
(8) below.
(22)
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 the Member States whose currency is the euro. Spain should
also ensure the full and timely implementation of these recommendations.
HEREBY RECOMMENDS that Spain take
action within the period 2014-2015 to:
1.
Reinforce the budgetary strategy as of 2014, in
particular by fully specifying the underlying measures for the year 2015 and
beyond, to ensure the correction of the excessive deficit in a sustainable
manner by 2016 through achieving the structural adjustment effort specified in
the Council recommendation under the Excessive Deficit Procedure. A durable correction
of the fiscal imbalances requires a credible implementation of ambitious
structural reforms to increase the adjustment capacity and boost growth and
employment. After achieving the correction of the excessive deficit, pursue a
structural adjustment towards the medium-term objective of at least 0.5% each
year, and more in good economic conditions or if needed to ensure that the debt
rule is met in order to put the high general government debt ratio on a
sustained downward path. Ensure that the new independent fiscal authority
becomes fully operational as soon as possible and ensure a full implementation of
the preventive, corrective and enforcement measures in the Budgetary Stability
Organic Law at all levels of government, including on the elimination of public
sector commercial arrears. Carry out by February 2015 a systematic review of
expenditure at all levels of government to underpin the efficiency and quality
of public spending going forward. Continue to increase the cost-effectiveness
of the health-care sector, in particular by further rationalising
pharmaceutical spending, including in hospitals and strengthening coordination
across types of care, while maintaining accessibility for vulnerable groups. Adopt
by the end of 2014 a comprehensive tax reform to make the tax system simpler
and more conducive to growth and job creation, preservation of the environment
and stability of revenues. To that end: shift revenues towards less distortive
taxes, such as consumption, environmental (e.g. on motor fuels) and recurrent
property taxes; remove inefficient personal and corporate income tax
expenditures; consider lowering employers' social security contributions, in
particular for low-wage jobs; continue to tackle the debt bias in corporate
taxation; take measures to avoid that taxation hinders the smooth functioning
of Spain's internal market. Step up the fight against tax evasion.
2.
Complete the reform of the saving banks sector,
as regards the adoption of secondary legislation and complete the restructuring
of state-owned savings banks in order to accelerate their full recovery and facilitate
their return to private ownership. Promote banks' efforts to sustain strong capital
ratios, monitor Sareb's activity in order to ensure timely asset disposal while
minimising the cost to the taxpayer. Complete the ongoing measures to widen SMEs
access to finance, in particular by finalising the ongoing measures to improve
non-bank financial intermediation. Remove remaining bottlenecks in the
corporate insolvency framework, in particular by enhancing the expertise of
insolvency administrators and the capacity of the judicial system to handle
insolvency cases and develop a permanent framework for personal insolvency.
3.
Pursue new measures to reduce labour market
segmentation to favour sustainable, quality jobs, including through reducing
the number of contract types and ensuring a balanced access to severance
rights. Continue regular monitoring of the labour market reforms. Promote real
wage developments consistent with the objective of creating jobs. Strengthen
the job-search requirement in unemployment benefits. Enhance the effectiveness and
targeting of active labour market policies, including hiring subsidies,
particularly for those facing more difficulties in accessing employment. Reinforce
the coordination between labour market and education and training policies. Accelerate
the modernisation of public employment services to ensure effective
personalised counselling, adequate training and job-matching, with special focus
on the long-term unemployed. Ensure the effective application of public-private
cooperation in placement services before the end of 2014, and monitor the
quality of services provided. Ensure the effective functioning of the Single
Job Portal and combine it with further measures to support labour mobility.
4.
Implement the 2013-2016 Youth Entrepreneurship
and Employment Strategy and evaluate its effectiveness. Provide good quality
offers of employment opportunities, apprenticeships and traineeships for young
people and improve the outreach to non-registered unemployed young people, in
line with the objectives of a youth guarantee. Effectively implement the new
educational schemes to increase the quality of primary and secondary education.
Enhance guidance and support for groups at risk of early school leaving.
Increase the labour-market relevance of vocational education and training and of
higher education, in particular by enhancing the cooperation with employers and
supporting the training of trainers and tutors.
5.
Implement the 2013-2016 National Action Plan on
Social Inclusion and assess its effectiveness covering the full range of its
objectives. Strengthen administrative capacity and coordination between
employment and social services in order to provide integrated pathways to
support those at risk, and streamline procedures to support transitions between
minimum income schemes and the labour market. Improve the targeting of family
support schemes and quality services favouring low-income households with children,
to ensure the progressivity and effectiveness of social transfers.
6.
Ensure an ambitious and swift implementation of
Law No 20/1013 on Market Unity at all levels of administration. Adopt an
ambitious reform of professional services and of professional associations by the
end of 2014, defining the professions requiring registration in a professional
organisation, and the transparency and accountability of professional bodies,
opening up unjustifiably reserved activities and safeguarding market unity in
the access to and exercise of professional services in Spain. Further reduce
the time, cost and number of procedures required for setting up an operating
business. Address unjustified restrictions to the establishment of large-scale
retail premises, notably through a revision of existing regional planning
regulations. Identify sources of financing for the new national strategy for
science, technology and innovation and make operational the new State Research
Agency.
7.
Following the reform of 2013, ensure the
effective elimination of deficit in the electricity system as of 2014,
including by taking further structural measures if needed. Address the problem
of insolvent toll motorways so as to minimise costs for the State. Set up an
independent observatory to contribute to the assessment of future major
infrastructure projects by the end of 2014. Take measures to ensure effective
competition in freight and passenger rail services.
8.
Implement at all government levels the
recommendations of the committee for the reform of the public administration. Strengthen
control mechanisms and increase the transparency of administrative decisions,
in particular at regional and local level. Complete and monitor closely the
ongoing measures to fight against the shadow economy and undeclared work. Adopt
pending reforms on the structure of the judiciary and on the judicial map and
ensure implementation of adopted reforms.
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) 410 final.
[4]               P7_TA(2014)0128 and P7_TA(2014)0129.
[5]               OJ L 140, 27.5.2013, p.11.
[6]               C(2013) 8003 final
[7]               COM(2013) 800 final.
[8]               COM(2013) 790 final.
[9]               SWD(2014) 80 final.
[10]             Under Article 5(2) of Council Regulation (EC) No
1466/97.


title: Council Recommendation of 11 July 2017 on the 2017 National Reform Programme of Spain and delivering a Council opinion on the 2017 Stability Programme of Spain

text:
               9.8.2017

               EN

               Official Journal of the European Union

               C 261/31

         COUNCIL RECOMMENDATION
   of 11 July 2017
   on the 2017 National Reform Programme of Spain and delivering a Council opinion on the 2017 Stability Programme of Spain
   (2017/C 261/08)
   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 16 November 2016, the Commission adopted the Annual Growth Survey, marking the start of the 2017 European Semester for economic policy coordination. The priorities of the Annual Growth Survey were endorsed by the European Council on 9-10 March 2017. On 16 November 2016, on the basis of Regulation (EU) No 1176/2011, the Commission adopted the Alert Mechanism Report, in which it identified Spain as one of the Member States for which an in-depth review would be carried out. On the same date, the Commission also adopted a recommendation for a Council Recommendation on the economic policy of the euro area, which was endorsed by the European Council on 9-10 March 2017. On 21 March 2017, the Council adopted the Recommendation on the economic policy of the euro area (‘Recommendation for the euro area’) (3).

               (2)

               As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Spain should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) to (3) below.

               (3)

               The 2017 country report for Spain was published on 22 February 2017. It assessed Spain’s progress in addressing the country-specific recommendations adopted by the Council on 12 July 2016, the follow-up given to the country-specific recommendations adopted in previous years and Spain’s progress towards its national Europe 2020 targets. It also included an in-depth review under Article 5 of Regulation (EU) No 1176/2011, the results of which were also published on 22 February 2017. The Commission’s analysis led it to conclude that Spain is experiencing macroeconomic imbalances which have cross-border relevance. In particular, the current account surpluses are translating into a reduction of Spain’s net external liabilities, which nonetheless remain sizeable and expose the country to shifts in market sentiment. Private-sector debt has decreased significantly, especially for corporations, but household debt remains high. Economic growth has become the main driver of debt reduction, but fiscal sustainability risks remain high in the medium term. The need for action to reduce the risk of adverse effects of imbalances on the Spanish economy and, given its size and cross-border relevance, on the economic and monetary union, is particularly important. The financial sector has continued to show a high degree of stability, supported by its ongoing restructuring, low funding costs and the economic recovery. Job creation has been strong in recent years and unemployment has decreased rapidly, but remains very high. Labour market reforms and wage moderation have been important drivers of strong job creation and competitiveness gains in recent years.

               (4)

               Spain submitted its 2017 National Reform Programme on 28 April 2017 and its 2017 Stability Programme on 29 April 2017. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (5)

               Relevant country-specific recommendations have been addressed in the programming of the European Structural and Investment Funds (ESI Funds) for the 2014-2020 period. As provided for in Article 23 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council (4), where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking effectiveness of the ESI Funds to sound economic governance.

               (6)

               Spain is currently in the corrective arm of the Stability and Growth Pact. In its 2017 Stability Programme, Spain plans to correct the excessive deficit by 2018, in line with the Council Decision of 8 August 2016 giving notice to Spain to take measures for the deficit reduction judged necessary in order to remedy the situation of excessive deficit (‘Council Decision of 8 August 2016’). The headline deficit is planned to continue declining to 0,5 % of GDP in 2020. The expenditure projections in the 2017 Stability Programme incorporate the materialisation of contingent liabilities related to the motorways and the financial sector, amounting to close to 0,4 % and 0,2 % of GDP in 2017 and 2018, respectively. The medium-term budgetary objective of a balanced budgetary position in structural terms is not planned to be reached within the time horizon of the 2017 Stability Programme. The recalculated structural balance (5) is projected to reach -1,9 % of GDP in 2020. The 2017 Stability Programme projects the government debt-to-GDP ratio to decline to 98,8 % in 2017, 97,6 % in 2018, and 92,5 % in 2020. The 2017 Stability Programme’s macroeconomic assumptions are plausible until 2018 and turn somewhat favourable thereafter. Overall, the planned achievement of the targets continues to rely on the strong economic outlook, which is nevertheless subject to risks. Other risks to the achievement of the fiscal targets relate to uncertainty regarding the impact of the recent tax measures. Moreover, taking into account the assumed materialisation of contingent liabilities (which are not included in the Commission 2017 spring forecast), the 2017 Stability Programme relies on considerably higher expenditure restraint than projected in the Commission forecast in 2017 and 2018. Finally, the measures needed to support the planned deficit targets for 2018 have not yet been specified.

               (7)

               On 8 August 2016, the Council requested Spain to put an end to the excessive deficit situation by 2018 and, in particular, to reduce the general government deficit to 4,6 % of GDP in 2016, 3,1 % of GDP in 2017 and 2,2 % of GDP in 2018. This improvement in the general government balance was deemed consistent with a deterioration of the structural balance by 0,4 % of GDP in 2016, and a 0,5 % of GDP improvement in both 2017 and 2018, based on the updated Commission 2016 spring forecast. Spain reached a headline deficit of 4,5 % of GDP in 2016, below the target set in the Council Decision of 8 August 2016. The Commission 2017 spring forecast projects the headline deficit to decline to 3,2 % of GDP in 2017 and further to 2,6 % of GDP in 2018 on a no-policy-change basis, 0,1 % and 0,4 % of GDP respectively above the headline deficit targets in the 2017 Stability Programme and those set by the Council. Unlike the 2017 Stability Programme, the forecast does not assume the materialisation of the above-mentioned contingent liabilities. The cumulative fiscal effort over 2016-2017 is expected to be narrowly ensured, while in 2018, on a no-policy-change basis, the fiscal effort is forecast to fall short of what was requested in the Council Decision of 8 August 2016. In addition, in August 2016, the Council requested Spain to take measures to improve its fiscal framework, but the 2017 Stability Programme does not report plans to strengthen the contribution of the Stability Law’s spending rule to the sustainability of public finance. Overall, the Council is of the opinion that further measures will be needed, in particular in 2018, to comply with the provisions of the Stability and Growth Pact and in particular with the terms of the Council Decision of 8 August 2016.

               (8)

               Spain still lacks a clear and consistent public procurement policy framework that ensures legal compliance, a high level of competition and economic efficiency, namely through effective ex ante and ex post control mechanisms, enhanced transparency and coordination across contracting authorities and entities at all government levels. The Government has put forward some measures in 2017 that would improve the procurement supervision system and are currently awaiting parliamentary approval.

               (9)

               Spain has made progress in the fight against corruption, in particular regarding transparency of administrative decision-making, and more concretely on enacting legislation on transparency of party financing, asset disclosure and conflicts of interest. The focus now shifts to the implementation of these measures. However, despite a surge in corruption investigations involving cases at the local and regional levels, no tailor-made preventive strategies to mitigate corruption risks have been developed at those government levels nor is there a shared preventive strategy across government levels. Other shortcomings such as gaps in the legislation to protect whistle-blowers, the degree of independence of the recently established Office of Conflicts of Interest and the lack of regulation of lobbying have not been the object of a specific follow-up yet. Another issue concerns the protracted judicial procedure for corruption cases. The Criminal Procedure law was amended in 2015 to limit the time allocated to investigations and reduce undue delays in criminal procedures. This could, however, increase the risk that procedural time limits are not sufficient for handling complex corruption cases, if the provisions that allow for extension periods prove to be restrictive.

               (10)

               Despite a standard VAT rate in line with the Union average and a low and declining VAT compliance gap, Spain has relatively low VAT revenues. This is mainly due to Spain extensively applying exemptions or reduced rates on various products and services. As a result, Spain recorded the largest policy gap in the Union in 2014 (59 % compared to the Union average of about 44 %). Similarly, Spain’s revenues from environmentally related taxes are among the lowest in the Union, despite some measures taken in recent years, mainly in the energy sector. Taxing pollution and resource use can generate increased revenue and bring important social and environmental benefits. There is also normative dispersion resulting in a heterogeneous approach to certain environmental taxes at the regional level. Regarding expenditure, the Government has commissioned AIReF, Spain’s independent fiscal institution, to carry out a spending review covering all levels of general government. The review can help identify areas where spending needs can be met with a more efficient use of resources.

               (11)

               Job creation has been strong in recent years, supported by labour market reforms and wage moderation. Unemployment has decreased rapidly, but remains among the highest in the Union, in particular among young and low-skilled people, entailing risks of disengagement from the labour market. Almost half of the unemployed have been without a job for more than a year. Spain is taking measures to support young people, in particular by extending the Youth Guarantee (6) eligibility criteria, and to strengthen individual support to the long-term unemployed. Their effectiveness depends also on the performance of the regional public employment services. There is scope to enhance their cooperation with social services, so as to improve the provision of extended services to jobseekers, in particular the long-term unemployed and beneficiaries of income guarantee schemes. At the same time, cooperation of public employment services with employers could be enhanced, in particular by increasing the share of vacancies handled by the employment services.

               (12)

               Spain has one of the highest shares of temporary employment in the Union, and many temporary contracts are of very short duration. Transition rates from temporary to permanent contracts are very low in comparison to the Union average. The widespread use of temporary contracts is associated with lower productivity growth (including through lower on-the-job training opportunities), poorer working conditions and higher poverty risks. The recent labour market reforms seem to have had a mildly positive effect in reducing segmentation between permanent and temporary contracts, and the ongoing reinforcement of labour inspections is showing positive results in addressing the abuse of temporary contracts. However, some features of the Spanish labour market may still discourage hiring on permanent contracts, including uncertainty in case of legal dispute following a dismissal, along with comparatively high severance payments for workers on permanent contracts. Moreover, the system of hiring incentives remains scattered and not effectively targeted at the promotion of open-ended employment. Although it has recently established a working group on the quality of employment, Spain has not yet developed a comprehensive plan for fighting labour market segmentation, following the 2014 agreement between the Government and social partners.

               (13)

               Disparities persist in the eligibility conditions of income guarantee schemes and in the link between activation and protection across regions and schemes. Certain vulnerable groups are left out of the income guarantee arrangements. The limited effectiveness of the schemes is partly explained by large disparities in adequacy and access conditions of the regional minimum income schemes and by the fragmentation of the national benefit system into multiple schemes addressing various categories of jobseekers and managed by different administrations. Fragmentation introduces discontinuity in the support given to those in need of it and hampers the delivery of integrated pathways. In response to the multiple challenges, an ongoing study aims at assessing the effectiveness of the national and regional income support schemes. Family benefits are poorly targeted. Moreover, when taking into account the impact of tax credits, the tax-benefit system is overall slightly regressive. In addition, childcare use strongly increases with family income, suggesting barriers to access for low-income parents. The provision of long-term care services is improving, but it differs across regions and current needs are still not met.

               (14)

               Weak education outcomes negatively affect the longer-term potential for productivity growth in Spain. Despite significant improvements over the past years, the early school leaving rate remains among the highest in the Union. There are wide regional disparities in early school leaving and students’ performance, in particular regarding basic skills. Teachers’ training and individual students’ support are among the drivers of successful school education in well performing regions. Spain has the second highest grade repetition rate in the Union, which increases the risk of school drop-out, lowers attainment expectations and weighs on education costs. Employability of tertiary graduates remains comparatively low. The reduced mobility of students and academic staff, limited traineeships’ opportunities, lack of incentives and the rigidity of university governance remain obstacles to cooperation with business on education or research.

               (15)

               To strengthen productivity and competitiveness, Spain would benefit from further promoting research and innovation. However, innovation performance has been declining and is now at a lower level than in 2007, while the country’s gap with the Union average has increased over time. Low innovation performance coincides with declining private R & D expenditure and points to weaknesses in the research and innovation governance framework. The State Agency for Research responsible for managing central government research and innovation funding has become operational in early 2017. Until now, there is no systematic multiannual planning of support programme budgets. Also, the effectiveness of support programmes is not systematically evaluated to enhance their design and implementation. Due to a lack of incentives and the rigidity of university governance, public-private cooperation also remains weak and the mobility of researchers between public and private sector is low. Coordination across government levels is not optimal, and as a result national and regional policies do not operate in full synergy.

               (16)

               Spanish small firms tend to have significantly lower productivity than their peers in other large Member States. Given the prevalence of small firms in Spain, this has a significant impact on productivity in the economy as a whole. Easing the barriers for businesses to be created, operate and grow, would therefore result in increased investment and productivity. The Spanish Government adopted several measures in recent years aimed at facilitating business creation and growth. The consolidation and full implementation of these reforms is essential to fully reap their benefits. The law on market unity adopted in 2013 has contributed to tackling the additional costs for entrepreneurs caused by the substantial differences and overlaps in business regulations across regions. The increasing use by businesses of the complaint mechanism provided for in that law to seek redress on market access barriers hint at a possible need to further simplify licensing procedures. Coordination between relevant public administrations, including at sectoral conference level, requires more efforts. This is essential to ensure that existing and forthcoming legislation at all levels effectively tackles unnecessary market entry barriers, including for new business models in the collaborative economy. In the retail sector, dual authorisations for retail establishments continue to unnecessarily restrict market entry. Market-access requirements in regional legislation concerning the vehicle-with-driver services sector and short-term rental-accommodation services may unnecessarily hamper the balanced development of the collaborative economy. Spain has taken steps in the first months of 2017 to leverage the market unity law, examples being the recently adopted guide on its implementation and the published catalogue of good and bad practices in applying it.

               (17)

               Regulation of professional services remains comparatively restrictive. Protectionist rights (‘reserved activities’) are granted selectively to some service providers, excluding others with relevant similar qualifications. In a large number of professions, it is mandatory to be a member of a professional association. The level of restrictiveness is higher in Spain than the Union-weighted average for civil engineers, architects and tourist guides. It is lower than the Union average for patent agents and lawyers, although access to the latter profession is more tightly restricted than for any other profession in Spain. The draft professional services law envisaging, among other things, rationalisation of professional association membership has still not been adopted. This reform also defines increased transparency and accountability of professional bodies, opening up unjustified reserved activities and safeguarding market unity in the access to and exercise of professional services in Spain.

               (18)

               In the context of the 2017 European Semester, the Commission has carried out a comprehensive analysis of Spain’s economic policy and published it in the 2017 country report. It has also assessed the 2017 Stability Programme, the 2017 National Reform Programme and the follow-up given to the recommendations addressed to Spain in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Spain, but also their compliance with Union rules and guidance, given the need to strengthen the Union’s overall economic governance by providing Union-level input into future national decisions.

               (19)

               In the light of this assessment, the Council has examined the 2017 Stability Programme and its opinion (7) is reflected in particular in recommendation (1) below.

               (20)

               In the light of the Commission’s in-depth review and this assessment, the Council has examined the 2017 National Reform Programme and the 2017 Stability Programme. Its recommendations made under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) to (3) below,

         HEREBY RECOMMENDS that Spain take action in 2017 and 2018 to:

               1.

               Ensure compliance with the Council Decision of 8 August 2016, including also measures to strengthen the fiscal and public procurement frameworks. Undertake a comprehensive expenditure review in order to identify possible areas for improving spending efficiency.

               2.

               Reinforce the coordination between regional employment services, social services and employers, to better respond to jobseekers’ and employers’ needs. Take measures to promote hiring on open-ended contracts. Address regional disparities and fragmentation in income guarantee schemes and improve family support, including access to quality childcare. Increase the labour market relevance of tertiary education. Address regional disparities in educational outcomes, in particular by strengthening teacher training and support for individual students.

               3.

               Ensure adequate and sustained investment in research and innovation and strengthen its governance across government levels. Ensure a thorough and timely implementation of the law on market unity for existing and forthcoming legislation.

      Done at Brussels, 11 July 2017.

            For the Council

            The President

         T. TÕNISTE

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  OJ C 92, 24.3.2017, p. 1.

      (4)  Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320).

      (5)  Cyclically-adjusted balance net of one-off and temporary measures, recalculated by the Commission using the commonly agreed methodology.

      (6)  Council Recommendation of 22 April 2013 on establishing a Youth Guarantee (OJ C 120, 26.4.2013, p. 1).

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


title: Recommendation of the European Central Bank of 14 December 2009 to the Council of the European Union on the external auditors of the Central Bank and Financial Services Authority of Ireland (ECB/2009/26)

text:
               18.12.2009

               EN

               Official Journal of the European Union

               C 308/1

      RECOMMENDATION OF THE EUROPEAN CENTRAL BANK

   of 14 December 2009
   to the Council of the European Union on the external auditors of the Central Bank and Financial Services Authority of Ireland
   (ECB/2009/26)
   2009/C 308/01
   THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
   Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Article 27.1 thereof,
   Whereas:

               (1)

               The accounts of the European Central Bank (ECB) and national central banks are audited by independent external auditors recommended by the ECB’s Governing Council and approved by the Council of the European Union.

               (2)

               The mandate of the Central Bank and Financial Services Authority of Ireland’s current external auditors ended after the audit for the financial year 2008. It is therefore necessary to appoint external auditors from the financial year 2009.

               (3)

               The Central Bank and Financial Services Authority of Ireland has selected Deloitte & Touche as its external auditors for the financial years 2009 to 2011,

         HAS ADOPTED THIS RECOMMENDATION:
   It is recommended that Deloitte & Touche should be appointed as the external auditors of the Central Bank and Financial Services Authority of Ireland for the financial years 2009 to 2011.

      Done at Frankfurt am Main, 14 December 2009.

            The President of the ECB

         Jean-Claude TRICHET


title: Commission recommendation No 359/78/ECSC of 20 February 1978 imposing a provisional anti-dumping duty on certain galvanized sheets and plates originating in the German Democratic Republic and Japan

text:
22. 2. 78                            Official Journal of the European Communities                           No L 50 / 13
                            COMMISSION RECOMMENDATION No 359/78 / ECSC
                                                     of 20 February 1978
              imposing a provisional anti-dumping duty on certain galvanized sheets and
                     plates originating in the German Democratic Republic and Japan
THE COMMISSION OF THE EUROPEAN                                   sion shows that, on the one hand, imports into the
COMMUNITIES,                                                     Community of the products increased globally from
                                                                 62 000 to 224 000 tonnes between 1974 and 1977 ,
Having regard to the Treaty establishing the European            imports originating in the German Democratic Repu
Coal and Steel Community, and in particular Articles             blic and Japan having risen from 34 000 to 70 000
74 and 86 thereof,                                               tonnes in the same period, and that, as a result, they
                                                                 have been able to acquire a market share of 8 % in
                                                                 total and 5 % for imports originating in the German
Having regard to Commission recommendation                        Democratic Republic and Japan , together with those
77/329/ ECSC of 15 April 1977 on protection against              from Poland and Spain , which are already subject to a
dumping or the granting of bounties or subsidies by              provisional anti-dumping duty in the Community and
countries which are not members of the European                  that, on the other hand, the Community steel industry
Coal and Steel Community ('), as amended by recom               is in a crisis situation characterized by a reduction in
mendation No 3004/77/ECSC (2), and in particular                 the number employed from 780 000 to 720 000
Articles 15 and 19 thereof,
                                                                 between 1974 and 1977 and by short-time working
                                                                 and that, as a result, the Community steel industry
Having heard the opinions expressed within the Advi              recorded a reduction in profits or the appearance of
sory Committee provided for by recommendation                    serious losses in most of the firms concerned ;
77/329/ ECSC,
Whereas the Commission has received a complaint,
submitted in the name of the relevant Community                  Whereas the import prices of deliveries originating in
industry, setting out evidence as to the existence of             the German Democratic Republic and Japan are
dumping of certain galvanized sheets and plates origi           considerably lower than the already low prices of the
nating in the German Democratic Republic, Japan                   Community producers and thus accentuate the depres
and certain other countries and material injury                  sion of Community prices, thereby causing or threat
resulting therefrom ;                                             ening to cause material injury to the Community
                                                                  industry or a major part of it ;
Whereas the Commission has published basis
prices (3) based on the lowest normal prices or costs of
production in the supplying countries where normal
conditions of competition prevail, including the costs            Whereas immediate action has been requested by one
of transport, insurance and customs duties ;                      Member State ;
Whereas the prices of imports into the Community of
the products which are the subject of the complaint
have been compared with these basis prices ;                      Whereas, in the serious conditions being experienced
                                                                  by the Community steel industry, the interests of the
Whereas a preliminary examination of the matter                   Community require immediate action ;
based on this comparison shows that these products,
originating in the German Democratic Republic and
Japan, are offered for import within the Community
(United Kingdom market) at prices lower than the
basis prices and that dumping has taken place, the
                                                                  Whereas it is for the Commission, without prejudice
                                                                  to the results of the investigation opened in accor
margin of which is constituted by this undercutting ;             dance with Article 1 1 of recommendation 77/ 329/
                                                                  ECSC, to decide promptly to apply provisional
Whereas, with regard to injury to the industry                    measures consisting of the imposition of a provisional
concerned, the evidence submitted to the Commis                  anti-dumping duty on imports of the products
                                                                  concerned originating in the German Democratic
(») OJ No L 114, 5. 5. 1977, p. 6.                                Republic and Japan , the rate of which corresponds to
(2) OJ No L 352, 31 . 12. 1977, p. 13 .
(') Communication from the Commission of 31 December              the difference between the basis price published by
    1977 concerning the basis prices of certain steel products    the Commission for this product and its price on
    (OJ No L 353, 31 . 12. 1977, p. 1 ).                          importation into the Community ;
 ---pagebreak--- No L 50/ 14                        Official Journal of the European Communities                             22. 2. 78
MAKES THE FOLLOWING RECOMMENDATION :                         tional upon the deposit of a security for the amount of
                                                             the provisional duty.
                       Article 1
                                                                                Article 3
1 . A provisional anti-dumping duty is hereby
imposed on the following products originating in the         This recommendation shall be notified to the Member
German Democratic Republic and Japan :                       States .
— zinc-coated (other than electrolytically) steel sheets      It shall enter into force for each Member State on the
    and plates (galvanized),                                 date of its publication in the Official Journal of the
— Common Customs Tariff subheading 73.13 B IV                 European Communities.
    c),
— NIMEXE code 73.13-68 and 72.                               Without prejudice to the provisions of Article 18 of
                                                              recommendation 77/329/ECSC, it shall apply until
2. The amount of this duty shall be equal to the              the entry into force of an Act of the Commission
amount by which the effective price (basic price plus         either adopting definitive measures or extending the
extras) established by contract, free frontier duty-paid,     provisional duty, and in any event for a maximum
is lower than the effective price (basic price plus           period of three months.
extras) published by the Commission for this product.
3 . The provisions in force for the collection of             Done at Brussels, 20 February 1978 .
customs duty shall apply to the collection of this duty.
                                                                                For the Commission
                       Article 2
                                                                                Étienne DAVIGNON
The entry of the products described in Article 1 for
consumption within the Community shall be condi                                     Member of the Commission


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52003HB0011

Recommendation of the European Central Bank of 3 October 2003 to the Council of the European Union on the external auditors of the Banque centrale du Luxembourg (ECB/2003/11)

Official Journal C 247 , 15/10/2003 P. 0016 - 0016

Recommendation of the European Central Bankof 3 October 2003to the Council of the European Union on the external auditors of the Banque centrale du Luxembourg(ECB/2003/11)(2003/C 247/06)THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular to Article 27.1 thereof,Whereas:(1) The accounts of the European Central Bank (ECB) and of the national central banks of the Eurosystem are audited by independent external auditors recommended by the Governing Council of the ECB and approved by the Council of the European Union.(2) The mandate of the current external auditors of the Banque centrale du Luxembourg will not be renewed when it expires at the end of 2003, after five years. It is therefore necessary to appoint external auditors from 2004.(3) The Banque centrale du Luxembourg has selected new external auditors in accordance with its public procurement rules, and the ECB considers that they fulfil the necessary requirements.(4) The mandate of the external auditors will be for one year and may be renewed,HEREBY RECOMMENDS:Deloitte &  Touche Luxembourg as the external auditors of the Banque centrale du Luxembourg for the financial year 2004.This recommendation will be published in the Official Journal of the European Union.Done at Frankfurt am Main on 3 October 2003.The President of the ECBWillem F. Duisenberg


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32004H0406(01)

Council Recommendation of 30 March 2004 regarding guidelines for taking samples of seized drugs

Official Journal C 086 , 06/04/2004 P. 0010 - 0011

Council Recommendationof 30 March 2004regarding guidelines for taking samples of seized drugs(2004/C 86/04)THE COUNCIL OF THE EUROPEAN UNION,Bearing in mind:The 1961 United Nations Single Convention on narcotic drugs, as amended by the 1972 amending Protocol,The 1971 United Nations Convention on Psychotropic Substances,The 1988 United Nations Convention against illicit traffic in narcotic drugs and psychotropic substances,The European Union Action Plan on Drugs 2000-2004, approved by the Feira European Council of June 2000,The Council Decision 2001/419/JHA of 28 May 2001 on the transmission of samples of controlled substances(1),The guidelines on representative drug sampling adopted by the European Network of Forensic Science Institutes in November 2003,Whereas:(1) One of the objectives of the European Union is progressively to establish an area of freedom, security and justice.(2) It is important within that area to comprehensively and effectively combat crime, including crime related to organised trafficking in drugs.(3) The terms "drugs" and "psychotropic substances" are understood as the substances listed in the corresponding United Nations Conventions and any substance that is subject to control measures pursuant to Article 5(1) of Joint Action 97/396/JHA of 16 June 1997 concerning the information exchange, risk assessment and the control of new synthetic drugs(2).(4) The collection, analysis, and dissemination of objective, reliable and comparable data on the drugs phenomenon should be assured, as laid down in the European Union Action Plan on Drugs.(5) The European Union Action Plan on Drugs considers that the Member States, through their forensic science laboratories, should exchange information on the analysis of the samples collected in synthetic-drug seizures.(6) To this end, guidelines for taking samples should be taken into consideration.(7) These guidelines should be practicable and not lead to excessive laboratory workload resulting in unacceptable turn around times.(8) These guidelines should also aim at protecting the chain of custody of transmitted samples, with a view to ensuring, as far as possible, their admissibility as evidence in proceedings on drug-related crimes.(9) Using such guidelines in these matters would help to improve judicial decisions and judgements, as well as facilitating the work of officials engaged in combating drugs at any level,HEREBY RECOMMENDS Member States,in the phase of sampling seized drugs for analytical purposes, to:1. introduce, where this is not already done, a system of taking samples according to internationally accepted guidelines, and to apply these guidelines, in particular in those cases where the results of the taking of samples is likely to be relevant for other Member States,2. consider the European Network of Forensic Science Institutes guidelines of November 2003 on representative drug sampling as a good basis for guaranteeing the procedure for taking samples,3. consider that the minimum standards for sampling of large international cases are(a) a detailed report (description of samples, sample numbers, weighings, packages, origin, external characteristics, appearance, pictures, etc) on the seizure by the law enforcement authorities, for the use of the forensic experts and the court;(b) a sampling technique based on the hypergeometrical or Bayesian methods, 95 % confidence level and 50 % proportion level (at least half of the items) or the method recommended by UN,4. consider that the minimum standards for sampling used in one Member State may be taken into consideration in other Member States, in accordance with national legislation,5. adopt appropriate measures to guarantee the chain of custody in transmission of samples.(1) OJ L 150, 6.6.2001, p. 1.(2) OJ L 167, 25.6.1997, p. 1.