title: Council Recommendation of 5 December 2017 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania

text:
               20.12.2017

               EN

               Official Journal of the European Union

               C 439/1

         COUNCIL RECOMMENDATION
   of 5 December 2017
   with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania
   (2017/C 439/01)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(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 10(2), second subparagraph, thereof,
   Having regard to the recommendation of the European Commission,
   Whereas:

               (1)

               On 16 June 2017, the Council decided in accordance with Article 121(4) of the Treaty on the Functioning of the European Union (‘TFEU’) that a significant observed deviation from the adjustment path toward the medium-term budgetary objective existed in Romania and issued a recommendation for Romania to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure (2) does not exceed 3,3 % in 2017, corresponding to an annual structural adjustment of 0,5 % of GDP (3). Romania was recommended to use any windfall gains for deficit reduction, while budgetary consolidation measures should ensure a lasting improvement in the general government structural balance in a growth-friendly manner. The Council established a deadline of 15 October 2017 for Romania to report on action taken in response to the Recommendation.

               (2)

               On 11 July 2017, the Council recommended that Romania ensure that, in 2017, it comply with the Council Recommendation (4) of 16 June 2017 with a view to correcting the significant deviation from the adjustment path toward the medium-term budgetary objective. For 2018, Romania was recommended to pursue a substantial fiscal effort in line with the requirements of the preventive arm of the Stability and Growth Pact, in order to further adjust towards its medium-term budgetary objective of a structural deficit of 1 % of GDP. According to the commonly agreed adjustment matrix under the Stability and Growth Pact, that adjustment translated into a requirement of a nominal growth rate of net primary government expenditure not exceeding 4,3 % in 2018. It would correspond to a structural adjustment of 0,5 % of GDP.

               (3)

               On 26 and 27 September 2017, the Commission undertook an enhanced surveillance mission in Romania for the purpose of on-site monitoring under –Article 11(2) of Regulation (EC) No 1466/97. The Commission reported its findings to the Council on 24 October 2017 and made them public, after having transmitted its provisional findings to the Romanian authorities.

               (4)

               On 13 October 2017, the Romanian authorities submitted the report on effective action in response to the Council Recommendation of 16 June 2017. Given the information provided by the Romanian authorities in their report on action taken and the overall assessment based on the 2017 autumn forecast, the Council on 5 December 2017 (5) concluded that Romania has not taken effective action in response to the Council Recommendation of 16 June 2017.

               (5)

               Romania is pursuing a pro-cyclical fiscal policy in the presence of high economic growth and a positive output gap. In 2017 the structural balance is estimated to be 2,3 % of GDP away from its medium-term budgetary objective. Therefore, and in light of the absence of effective action by Romania it is appropriate to address to that Member State a revised recommendation under Article 121(4) TFEU on the appropriate measures to be taken.

               (6)

               Based on the output gap projections of the Commission 2017 autumn forecast, Romania is in normal economic times in 2017 and 2018. Romania’s general government debt ratio is below the 60 %-of-GDP threshold. The minimum required structural effort prescribed by Regulation (EC) No 1466/97 and the commonly agreed adjustment matrix under the Stability and Growth Pact, which factors in the prevailing economic circumstances and possible sustainability concerns, amounts to 0,5 % of GDP.

               (7)

               Romania’s structural deficit is projected by the Commission to increase by 1,1 % of GDP in 2017, while the Council Recommendation of 16 June 2017 asked for a structural decrease of at least 0,5 % of GDP. Additionally, Romania is projected to remain at the 3 % of GDP deficit reference value of the Treaty in 2017 and is forecast to breach it by a significant margin in 2018 based on the Commission autumn 2017 forecast.

               (8)

               An additional effort necessary to bring Romania back on an appropriate adjustment path following the slippages in 2016 and 2017 should complement the adjustment of 0,5 % of GDP recommended by the Council on 11 July 2017. An additional effort of 0,3 % of GDP seems appropriate given the magnitude of the observed significant deviation from the recommended adjustment path towards the medium-term budgetary objective and it will accelerate adjustment back towards the medium-term budgetary objective. The required improvement of the structural balance by 0,8 % of GDP in 2018 is consistent with the nominal growth rate of net primary government expenditure not exceeding 3,3 % in 2018.

               (9)

               The Commission 2017 autumn forecast projects a further deterioration of the structural balance by 1 % in 2018. Therefore, a structural improvement of 0,8 % of GDP in 2018 translates into a need to adopt measures of a total structural yield of 1,8 % of GDP compared to the current 2018 baseline from the Commission 2017 autumn forecast.

               (10)

               The Commission 2017 autumn forecast projects a general government deficit of 3,9 % of GDP in 2018, which is above the 3 %-of-GDP Treaty reference value. The required structural adjustment of 0,8 % of GDP compared to the projected outcome for 2017 would also ensure that Romania respects the 3 % of GDP general government deficit threshold in 2018 with a margin.

               (11)

               The requirements for 2018, issued in this recommendation, supersede the corresponding elements set out in the fiscal recommendation contained in the Council Recommendation addressed to Romania on 11 July 2017.

               (12)

               Romania should report to the Council on action taken in response to this Recommendation by 15 April 2018, possibly as part of its Convergence Programme submitted pursuant to Article 7 of Regulation (EC) No 1466/97.

               (13)

               It is appropriate that this Recommendation be made public,

         HEREBY RECOMMENDS THAT ROMANIA:

               (1)

               take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 3,3 % in 2018, corresponding to an annual structural adjustment of at least 0,8 % of GDP in 2018, thereby putting the Member State on an appropriate adjustment path toward the medium-term budgetary objective;

               (2)

               use any windfall gains for deficit reduction; budgetary consolidation measures should secure a lasting improvement in the general government structural balance in a growth-friendly manner;

               (3)

               report to the Council by 15 April 2018 on action taken in response to this Recommendation.

      This Recommendation is addressed to Romania.
      Done at Brussels, 5 December 2017.

            For the Council

            The President

         T. TÕNISTE

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Net government expenditure is comprised of total government expenditure excluding interest expenditure, expenditure on Union programmes fully matched by Union funds revenue and non-discretionary changes in unemployment benefit expenditure. Nationally financed gross fixed capital formation is smoothed over a four-year period. Discretionary revenue measures or revenue increases mandated by law are factored in. One-off measures on both the revenue and expenditure sides are netted out.

      (3)  Council Recommendation of 16 June 2017 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania (OJ C 216, 6.7.2017, p. 1).

      (4)  Council Recommendation of 11 July 2017 on the 2017 National Reform Programme of Romania and delivering a Council opinion on the 2017 Convergence Programme of Romania (OJ C 261, 9.8.2017, p. 98).

      (5)  Council Decision (EU) 2017/2389 of 5 December 2017 establishing that no effective action has been taken by Romania in response to the Council Recommendation of 16 June 2017 (OJ L 340, 20.12.2017, p. 49).


title: Recommendation of the European Central Bank of 15 December 2017 to the Council of the European Union on the external auditors of the European Central Bank (ECB/2017/42)

text:
               23.12.2017

               EN

               Official Journal of the European Union

               C 444/1

         RECOMMENDATION OF THE EUROPEAN CENTRAL BANK
   of 15 December 2017
   to the Council of the European Union on the external auditors of the European Central Bank
   (ECB/2017/42)
   (2017/C 444/01)
   THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
   Having regard to the Treaty on the Functioning of the European Union,
   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 the national central banks of the Member States whose currency is the euro 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 ECB’s current external auditors, Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, will end after the audit for the financial year 2017. It is therefore necessary to appoint external auditors from the financial year 2018.

               (3)

               The ECB has selected Baker Tilly GmbH & Co. KG Wirtschaftsprüfungsgesellschaft as its external auditors for the financial years 2018 to 2022, with an option to extend the mandate for up to two additional financial years (i.e. to 2023 or to 2024),

         HAS ADOPTED THIS RECOMMENDATION:
   It is recommended that Baker Tilly GmbH & Co. KG Wirtschaftsprüfungsgesellschaft should be appointed as the external auditors of the ECB for the financial years 2018 to 2022, with an option to extend the mandate for up to two additional financial years (i.e. to 2023 or to 2024).

      Done at Frankfurt am Main, 15 December 2017.

            The President of the ECB

         Mario DRAGHI


title: Recommendation of the European Systemic Risk Board of 8 January 2018 amending Recommendation ESRB/2015/2 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures (ESRB/2018/1)

text:
               3.2.2018

               EN

               Official Journal of the European Union

               C 41/1

         RECOMMENDATION OF THE EUROPEAN SYSTEMIC RISK BOARD
   of 8 January 2018
   amending Recommendation ESRB/2015/2 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures
   (ESRB/2018/1)
   (2018/C 41/01)
   THE GENERAL BOARD OF THE EUROPEAN SYSTEMIC RISK BOARD,
   Having regard to the Treaty on the Functioning of the European Union,
   Having regard to Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (1), and in particular Article 3 and Articles 16 to 18 thereof,
   Having regard to Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (2), and in particular Article 458(8) thereof,
   Having regard to Decision ESRB/2011/1 of the European Systemic Risk Board of 20 January 2011 adopting the Rules of Procedure of the European Systemic Risk Board (3), and in particular Articles 18 to 20 thereof,
   Whereas:

               (1)

               Ensuring the effectiveness and consistency of macroprudential policy requires policymakers to give due consideration to the cross-border effects of macroprudential policy measures adopted by individual Member States and, when warranted, to adopt suitable reciprocal macroprudential policy measures to address them.

               (2)

               The framework on voluntary reciprocity for macroprudential policy measures set out in Recommendation ESRB/2015/2 of the European Systemic Risk Board (4) aims to ensure that all exposure-based macroprudential policy measures activated in one Member State are reciprocated in the other Member States.

               (3)

               Recommendation ESRB/2017/4 of the European Systemic Risk Board (5) allows the relevant activating authority to propose a maximum materiality threshold at the financial service provider level when requesting reciprocation. The permanent Assessment Team of the European Systemic Risk Board (ESRB), established under Decision ESRB/2015/4 of the European Systemic Risk Board (6), may recommend a different threshold if deemed necessary.

               (4)

               From 1 January 2018, credit institutions authorised in Finland and using the internal ratings-based (IRB) approach for calculating regulatory capital requirements are subject, pursuant to Article 458(2)(d)(vi) of Regulation (EU) No 575/2013, to a credit institution-specific floor of 15 % for the average risk-weight on residential mortgage loans secured by housing units in Finland, to be applied on a consolidated basis.

               (5)

               Following the notification to the ESRB, under Article 458(8) of Regulation (EU) No 575/2013, the General Board of the ESRB has decided to include this measure in the list of macroprudential policy measures which are recommended to be reciprocated under Recommendation ESRB/2015/2.

               (6)

               On 28 May 2017, the Belgian measure on mortgage loan exposures, enacted pursuant to Article 458(8) of Regulation (EU) No 575/2013, which was added to the list of macroprudential measures which are recommended to be reciprocated by Recommendation ESRB/2016/3 of the European Systemic Risk Board (7), expired. On 21 November 2017, the Nationale Bank van België/Banque nationale de Belgique announced the intention to launch a new national macroprudential measure, targeting mortgage loan exposures, following the procedure set out in Article 458 of Regulation (EU) No 575/2013.

               (7)

               Therefore, Recommendation ESRB/2015/2 should be amended accordingly,

         HAS ADOPTED THIS RECOMMENDATION:

      AMENDMENTS

   Recommendation ESRB/2015/2 is amended as follows:

               1.

               Section 1, sub-recommendation C(1) is replaced by the following:

                           ‘1.

                           The relevant authorities are recommended to reciprocate the macroprudential policy measures adopted by other relevant authorities and recommended for reciprocation by the ESRB. It is recommended that the following measures, as further described in the Annex, be reciprocated:
                           Estonia:

                                       —

                                       a 1-percent systemic risk buffer rate applied in accordance with Article 133 of Directive 2013/36/EU to the domestic exposures of all credit institutions authorised in Estonia;

                                 Finland:

                                       —

                                       a 15-percent floor for the average risk-weight on residential mortgage loans secured by a mortgage on housing units in Finland applied in accordance with Article 458(2)(d)(vi) of Regulation (EU) No 575/2013 to credit institutions, authorised in Finland, using the internal ratings-based (IRB) approach for calculating regulatory capital requirements.’;

               2.

               the Annex is replaced by the Annex to this Recommendation.

      Done at Frankfurt am Main, 8 January 2018.

         Francesco MAZZAFERRO

            Head of the ESRB Secretariat, on behalf of the General Board of the ESRB

      (1)  OJ L 331, 15.12.2010, p. 1.

      (2)  OJ L 176, 27.6.2013, p. 1.

      (3)  OJ C 58, 24.2.2011, p. 4.

      (4)  Recommendation ESRB/2015/2 of the European Systemic Risk Board of 15 December 2015 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures (OJ C 97, 12.3.2016, p. 9).

      (5)  Recommendation ESRB/2017/4 of the European Systemic Risk Board of 20 October 2017 amending Recommendation ESRB/2015/2 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures (OJ C 431, 15.12.2017, p. 1).

      (6)  Decision ESRB/2015/4 of the European Systemic Risk Board of 16 December 2015 on a coordination framework for the notification of national macroprudential policy measures by relevant authorities, the issuing of opinions and recommendations by the ESRB, and repealing Decision ESRB/2014/2 (OJ C 97, 12.3.2016, p. 28).

      (7)  Recommendation ESRB/2016/3 of the European Systemic Risk Board of 24 March 2016 amending Recommendation ESRB/2015/2 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures (OJ C 153, 29.4.2016, p. 1).

      ANNEX

            ‘ANNEX

               Estonia

                  1-percent systemic risk buffer rate applied in accordance with Article 133 of Directive 2013/36/EU to the domestic exposures of all credit institutions authorised in Estonia

            I.   Description of the measure

                        1.

                        The Estonian measure constitutes a 1-percent systemic risk buffer rate applied in accordance with Article 133 of Directive 2013/36/EU to the domestic exposures of all credit institutions authorised in Estonia.

                  II.   Reciprocation

                        2.

                        Where Member States have implemented Article 134 of Directive 2013/36/EU in national law, relevant authorities are recommended to reciprocate the Estonian measure for exposures located in Estonia of domestically authorised institutions in accordance with Article 134(1) of Directive 2013/36/EU. For the purposes of this paragraph, the deadline specified in sub-recommendation C(3) applies.

                        3.

                        Where Member States have not implemented Article 134 of Directive 2013/36/EU in national law, relevant authorities are recommended to reciprocate the Estonian measure for exposures located in Estonia of domestically authorised institutions in accordance with sub-recommendation C(2). Relevant authorities are recommended to adopt the equivalent measure within six months.

               Finland

                  A credit institution-specific minimum level of 15 % for the average risk-weight on loans secured by a mortgage on housing units in Finland applicable to credit institutions using the internal ratings-based (IRB) approach (hereinafter “IRB credit institutions”) under Article 458(2)(d)(vi) of Regulation (EU) No 575/2013.

            I.   Description of the measure

                        1.

                        The Finnish measure, applied in accordance with Article 458(2)(d)(vi) of Regulation (EU) No 575/2013, consists of a credit institution-specific average risk-weight floor of 15 % for IRB credit institutions, at the portfolio level, for residential mortgage loans secured by housing units in Finland.

                        2.

                        The measure is complemented by a materiality threshold of EUR 1 billion exposure to the residential mortgage lending market in Finland to steer the potential application of the de minimis principle by the reciprocating Member States.

                  II.   Reciprocation

                        3.

                        In accordance with Article 458(5) of Regulation (EU) No 575/2013, relevant authorities of the Member States concerned are recommended to reciprocate the Finnish measure and apply it to IRB credit institutions' portfolios of retail mortgage loans secured by housing units in Finland issued by domestically authorised branches located in Finland. For the purposes of this paragraph, the deadline specified in sub-recommendation C(3) applies.

                        4.

                        Relevant authorities are also recommended to reciprocate the Finnish measure and apply it to IRB credit institutions' portfolios of retail mortgage loans secured by housing units in Finland issued directly across borders by credit institutions established in their respective jurisdictions. For the purposes of this paragraph, the deadline specified in sub-recommendation C(3) applies.

                        5.

                        In accordance with sub-recommendation C(2), the relevant authorities are recommended to apply, following consultation with the ESRB, a macroprudential policy measure available in their jurisdiction that has the effect most equivalent to the above reciprocation, including adopting supervisory measures and powers laid down in Title VII, Chapter 2, Section IV of Directive 2013/36/EU. The relevant authorities are recommended to adopt the equivalent measure within four months.

                        6.

                        Where there are no IRB credit institutions authorised in other Member States concerned with branches located in Finland or providing financial services directly in Finland, that have exposures of EUR 1 billion or above to the Finnish mortgage market, relevant authorities of the Member States concerned may decide not to reciprocate as provided by Section 2.2.1 of Recommendation ESRB/2015/2. In this case the relevant authorities should monitor the materiality of the exposures and are recommended to reciprocate when an IRB credit institution exceeds the threshold of EUR 1 billion.

                  III.   Materiality threshold

                        7.

                        In line with Section 2.2.1 of Recommendation ESRB/2015/2, relevant authorities of the Member State concerned may exempt individual IRB credit institutions with non-material portfolios of retail mortgage loans secured by housing units in Finland below the materiality threshold of EUR 1 billion. In this case the relevant authorities should monitor the materiality of the exposures and are recommended to reciprocate when an IRB credit institution exceeds the threshold of EUR 1 billion.’.


title: Commission Recommendation (EU) 2018/234 of 14 February 2018 on enhancing the European nature and efficient conduct of the 2019 elections to the European Parliament

text:
               17.2.2018

               EN

               Official Journal of the European Union

               L 45/40

         COMMISSION RECOMMENDATION (EU) 2018/234
   of 14 February 2018
   on enhancing the European nature and efficient conduct of the 2019 elections to the European Parliament
   THE EUROPEAN COMMISSION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Article 292 thereof,
   Whereas:

               (1)

               Article 10(2) of the Treaty on European Union states that citizens are directly represented at Union level in the European Parliament.

               (2)

               Article 10(3) of the Treaty on European Union states that every citizen shall have the right to participate in the democratic life of the Union and that decisions shall be taken as openly and as closely as possible to the citizen.

               (3)

               Article 17(7) of the Treaty on European Union states that the European Council must take into account the elections to the European Parliament when proposing a candidate for President of the European Commission.

               (4)

               To further enhance the European nature and efficient conduct of the elections to the European Parliament, it is necessary to update and complement some elements of the Commission Recommendation 2013/142/EU (1) in good time ahead of the 2019 elections.

               (5)

               Reinforcing the democratic legitimacy of the EU and ensuring the participation of citizens in the political life at European level is essential. Citizens would be readier to vote in the elections to the European Parliament if they were more aware of the impact of EU policies in their day-to-day life, and if they would trust that they can have their say on the Union's most important choices, such as the selection of the leaders of the EU institutions and the establishment of priorities for the future of the Union.

               (6)

               The need to strengthen accountability and transparency also has implications for the Commission. The Commission has reviewed the Code of Conduct for the Members of the Commission (2). The new Code allows Members of the Commission to stand as candidates in the elections to the European Parliament without having to take a leave of absence. The relevant rules of the Framework Agreement on relations between the European Parliament and the European Commission, have been revised to take account of this change (3).

               (7)

               Policies decided at European level have direct implications for citizens' everyday lives and are felt at local level. Citizens need to know what is at stake at European level to make their choice in the elections to the European Parliament. Engaging with citizens on European issues encourages democratic participation of citizens in EU policymaking. Since January 2015, the current Commission has held 478 Citizens' Dialogues across all Member States, also in cooperation with institutional partners such as the European Parliament, national Parliaments, the Committee of the Regions and the European Economic and Social Committee. Between February 2018 and 9 May 2019, the Commission will be organising or helping to organise around 500 additional Dialogues in cooperation with the Member States, regional, local authorities as well as with the European Parliament and other European institutions.

               (8)

               Several Member States have announced their readiness to engage in broad public discussions on the future of Europe, and such national dialogues are already taking place in a number of Member States. By engaging with citizens across Europe and holding outreach events, organised according to their respective political structures and practices, Member States could help raise awareness among citizens on the importance of their vote in determining which vision would best advance the European project. Such events should take place over the period between the Leaders' meeting of 23 February 2018 and the Summit in Sibiu on 9 May 2019, just ahead of the elections to the European Parliament, where Heads of State or Government are expected to draw conclusions on the next steps for the Union.

               (9)

               European political parties play a key role in forming European political awareness, encouraging voter participation and in expressing the will of the citizens of the Union. This role could be enhanced if, over the months to come, European political parties would reach out to their national affiliate parties and civil society and raise awareness on choices regarding the future of Europe and the interests of the citizens they are representing.

               (10)

               The system of lead candidates for President of the Commission — ‘Spitzenkandidaten’ — was implemented for the first time in the 2014 elections to the European Parliament.

               (11)

               This process has helped to reinforce the Union's efficiency and its democratic legitimacy, which rests on the dual pillars of direct representation of citizens in the European Parliament and their indirect representation by governments of the Member States in the European Council and the Council. It has also contributed to strengthening the Commission's accountability, in line with Article 17(7) of the Treaty on European Union. It should be continued and improved in view of the 2019 elections to the European Parliament.

               (12)

               European and national political parties should announce well ahead of the start of the electoral campaign, ideally by the end of 2018, the candidate for President of the Commission they support and, ideally by early 2019, the candidate's own programme. This would make more transparent the link between the individual vote of a citizen of the Union for a particular political party in the elections to the European Parliament, the candidate for President of the Commission supported by that party and his/her vision for the future of Europe.

               (13)

               By selecting their lead candidates in an open, inclusive and transparent way, e.g. through ‘primary’ elections, European political parties and their national member parties would further strengthen this process. This would also help to raise wider attention as well as to mobilise voters.

               (14)

               Article 10(4) of the Treaty on European Union and Article 12(2) of the Charter of Fundamental Rights of the European Union assigns a key role to European political parties. The statute and funding of European political parties and European political foundations is regulated at European level. For reasons of transparency, scrutiny and democratic accountability of European political parties, the Commission has proposed to change relevant rules ahead of the 2019 elections to the European Parliament (4). In particular, access to funding from the general budget of the European Union should be made conditional upon the publication by the affiliated parties of the programme and logo of the European political party concerned. Citizens should be offered clear and relevant information upfront, in order to understand the impact of their votes at the European party level. Party events, such as congresses, and the electoral campaigns of the national parties are appropriate and efficient additional means of making this affiliation known and giving it clear visibility.

               (15)

               Starting the campaigns for the elections to the European Parliament much earlier than in the past and making known the European affiliations of participating national parties ahead of the campaign, should contribute to increasing the European dimension of these elections.

               (16)

               While taking account of the specificities of the national party political landscapes of the Member States, European political parties are encouraged to make known ahead of the start of the campaign, and preferably when announcing their candidates for President of the Commission, which political group in the European Parliament they intend to join or create in the next legislature. This would further increase transparency of the link between national parties, European political parties and political groups in the European Parliament.

               (17)

               By encouraging and facilitating the provision of information to the electorate on the affiliation of national parties to European political parties during campaigns for the elections to the European Parliament and, where possible, also on the ballots used in those elections, Member States would increase the visibility of the European political parties and the platforms they propose during the whole European electoral process.

               (18)

               Article 22(2) of the Treaty on the Functioning of the European Union states that citizens of the Union have the right to vote and to stand as candidates in elections to the European Parliament in the Member State where they choose to live, with Council Directive 93/109/EC (5).

               (19)

               In order to support citizens' participation and the European dimension of the elections to the European Parliament, it is encouraged to foster the identification and dissemination of Member States' best practices and measures implemented by Member States in the preparation and administration of those elections, including with regard to the right to vote of European citizens resident in another Member State as well as the promotion of the exercise of electoral rights of underrepresented groups, including persons with disabilities.

               (20)

               In the light of risks to the electoral process from cyber attacks and disinformation seen in recent elections and campaigns, sharing experience among Member States on related issues should be encouraged.

               (21)

               Member States, as well as European and national political parties, have a particular responsibility in enhancing the democratic and efficient conduct of the elections to the European Parliament,

         HAS ADOPTED THIS RECOMMENDATION:

      Engaging with European citizens in debates on European issues ahead of elections to the European Parliament

               1.

               Starting from the Leaders' meeting of 23 February 2018, and taking into account the respective national political structures and practices, Member States should hold outreach events to engage with citizens in public debates concerning European Union issues and the future of Europe. These outreach events should continue until the Leaders' meeting in Sibiu of 9 May 2019, shortly before the elections to the European Parliament.
               In the same period, European political parties and national parties should help raise citizens' awareness on the issues at stake at Union level and on how they intend to address them during the upcoming legislature.

      Support for a candidate for President of the European Commission

               2.

               Sufficiently early ahead of the elections to the European Parliament, ideally by the end of 2018, each European political party should make known the candidate for the function of the President of the European Commission they support. Ideally by early 2019 they should also make known the candidate's own political programme.
               European political parties and their national member parties are encouraged to select their lead candidates in an open, inclusive and transparent way.
               National political parties should ensure that their political information, including their political broadcasts, in view of the elections to the European Parliament are also used to inform citizens about the candidate for the function of President of the European Commission they support and about their candidate's programme.

      Informing voters about the affiliation between national parties and European political parties

               3.

               While taking account of the specificities of the national party political landscapes of the Member States, national political parties participating in the elections to the European Parliament should make publicly known ahead of those elections and before the start of the electoral campaign, if and with which European political party they are affiliated and which lead candidate they support.
               To the extent possible, national political parties should prominently display this information, including, where appropriate, the logo of the European political party, in all campaign materials, communications and political broadcasts.
               European political parties are encouraged to make known ahead of the start of the campaign, and preferably when announcing their candidates for President of the Commission, which political group in the European Parliament they intend to join or create in the next legislature.

      Encouraging and facilitating information for voters on the affiliation between national parties and European political parties

               4.

               Member States should encourage and facilitate the provision of information to the electorate on the affiliation between national parties and European political parties as well as their lead candidates before and during the elections to the European Parliament, such as by allowing and encouraging the indication of such an affiliation in the campaign material, on the websites of national and regional member parties, and, where possible, on the ballots used in those elections.

      Efficient conduct

               5.

               To ensure that European citizens resident in another Member State can use their right to vote in that Member State, to promote the exercise of electoral rights of underrepresented groups, including persons with disabilities, and overall to support democratic conduct and a high turnout, the competent national authorities are encouraged to meet in spring 2018, with the support of the Commission, to exchange best practices and practical measures.
               The competent national authorities are further encouraged to identify, based on the experiences of Member States, best practices in the identification, mitigation and management of risks to the electoral process from cyber attacks and disinformation.

      This Recommendation is addressed to the Member States and to the European and national political parties.
      Done at Brussels, 14 February 2018

            For the Commission

            The President

         Jean-Claude JUNCKER

      (1)  Commission Recommendation 2013/142/EU of 12 March 2013 on enhancing the democratic and efficient conduct of the elections to the European Parliament (OJ L 79, 21.3.2013, p. 29).

      (2)  Commission Decision of 31 January 2018 on a Code of Conduct for the Members of the European Commission (C(2018) 700 final).

      (3)  European Parliament decision of 7 February 2018 on the revision of the Framework Agreement on relations between the European Parliament and the European Commission (2017/2233(ACI)).

      (4)  Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU, Euratom) No 1141/2014 of the European Parliament and the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations — COM(2017) 481 of 13 September 2017.

      (5)  Council Directive 93/109/EC of 6 December 1993 laying down detailed arrangements for the exercise of the right to vote and stand as a candidate in elections to the European Parliament for citizens of the Union residing in a Member State of which they are not nationals (OJ L 329, 30.12.1993, p. 34).


title: Council Recommendation of 20 February 2018 on the appointment of the Vice-President of the European Central Bank

text:
               22.2.2018

               EN

               Official Journal of the European Union

               C 67/1

         COUNCIL RECOMMENDATION
   of 20 February 2018
   on the appointment of the Vice-President of the European Central Bank
   (2018/C 67/01)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 283(2) and 139(2) thereof,
   Having regard to Protocol No 4 on the Statute of the European System of Central Banks and of the European Central Bank, and in particular Article 11.2 thereof,
   HEREBY RECOMMENDS TO THE EUROPEAN COUNCIL:
   To appoint Mr Luis DE GUINDOS JURADO as Vice-President of the European Central Bank for a term of office of eight years with effect from 1 June 2018.

      Done at Brussels, 20 February 2018.

            For the Council

            The President

         V. GORANOV


title: Council Recommendation of 22 May 2018 on promoting common values, inclusive education, and the European dimension of teaching

text:
               7.6.2018

               EN

               Official Journal of the European Union

               C 195/1

         COUNCIL RECOMMENDATION
   of 22 May 2018
   on promoting common values, inclusive education, and the European dimension of teaching
   (2018/C 195/01)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 165 and 166 thereof,
   Having regard to the proposal from the European Commission,
   Whereas:

               (1)

               The Union is based on the common values and general principles of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities, stipulated in Article 2 of the Treaty on European Union. Pursuant to Article 3 of the Treaty on European Union, it is the aim of the Union to uphold and promote its values.

               (2)

               Inspired by these values, the Union has succeeded in bringing countries, communities and people together in a unique political project, enabling Europe’s longest period of peace, which in turn has fostered social stability and economic prosperity. Member States’ adoption of the values set out in the Treaty creates common ground that makes up the distinct feature of the European way of life and identity and gives the Union its place on the global stage.

               (3)

               The Union and its Member States are faced with a variety of challenges, including populism, xenophobia, divisive nationalism, discrimination, the spreading of fake news and misinformation, as well as the challenge of radicalisation leading to violent extremism. These phenomena could pose a serious threat to the foundations of our democracies, undermine trust in the rule of law and democratic institutions, and hinder a common sense of belonging within and amongst our European societies.

               (4)

               A lack of awareness of the origins of the Union, the reasons for its creation and its basic functioning favours misinformation and prevents the formation of informed opinions on its actions. Knowledge of the diversity of the Union and its Member States supports mutual respect, understanding and cooperation within and amongst Member States.

               (5)

               Education in all of its types and at all levels and from an early age plays a pivotal role in promoting common values. It helps to ensure social inclusion by providing every child with a fair chance and equal opportunities to succeed. It provides opportunities to become active and critically aware citizens, and increases understanding of the European identity.

               (6)

               At the Leaders’ Agenda meeting in November 2017 in Gothenburg, European leaders discussed the importance of education and culture for the future of Europe. Informing this debate, the Commission set out its vision for a European Education Area and proposed a number of initiatives in its Communication on ‘Strengthening European Identity through Education and Culture’ (1), which states that ‘strengthening our European identity remains essential and education and culture are the best vectors to ensure this’.

               (7)

               Following the Leaders’ meeting in Gothenburg, the European Council in its conclusions of 14 December 2017 highlighted that education and culture are key to building inclusive and cohesive societies, and to sustaining our competitiveness (2).

               (8)

               One of the objectives of the ET2020 framework for European cooperation in education and training (3), namely to promote equity, social cohesion and active citizenship, has been established on the basis that education should promote intercultural competences, democratic values and respect for fundamental rights, prevent and combat all forms of discrimination and racism, and equip children, young people and adults to interact positively with their peers from diverse backgrounds.

               (9)

               The Paris Declaration adopted on 17 March 2015 by European education ministers indicated the commitment by the Member States to promote common values, enhance critical thinking and media literacy, inclusive education and intercultural dialogue. Responses to an EU-wide public consultation (4) clearly show that inclusive education should be promoted. Only 16 % of the respondents feel that education is currently achieving this goal; 95 % feel that education should help young people understand the importance of common values and that the Union should help Member States in achieving this task (98 %).

               (10)

               A 2017 Eurydice survey on Citizenship Education at School in Europe shows that citizenship education is currently in the spotlight in a number of European countries. However, nearly half of the countries still have no policies on including citizenship education in initial teacher training. Therefore, teachers should be supported and empowered through measures to create an open learning culture and environment and deal with diverse learning groups in order to teach civic competences, transmit Europe’s shared heritage, promote common values and act as role models for learners.

               (11)

               Radicalisation leading to violent extremism remains an acute problem in several Member States. Promoting common values as a vector of social cohesion and integration, including through education policies, is an integral part of the solution. In order to support Member States in their endeavours, in July 2017, the European Commission established a High Level Group on Radicalisation (5) to identify support measures, including in education.

               (12)

               The most recent results of the PISA survey and the 2017 Education and Training Monitor emphasise the link between educational inequalities and students’ socioeconomic background. PISA data illustrate that students from poorer households are three times more likely to perform worse than their wealthier counterparts and that students of migrant background are more than twice as likely to be low achievers as other students. To prevent the marginalisation of young people, it is vital to have inclusive and equitable education systems that foster cohesive societies and lay the foundations for active citizenship and enhance employability.

               (13)

               The International Association for the Evaluation of Educational Achievement’s International Civic and Citizenship Education Study 2016 suggests that national and European identities can positively coexist and do not contradict each other. The study also shows that students with higher levels of civic knowledge also tended to be the students expressing more tolerant attitudes.

               (14)

               Eurobarometer surveys highlight a remarkably low level of knowledge of the Union. According to a 2014 opinion poll, 44 % of people feel that they have limited understanding of how the Union works while a 2011 survey shows that a relative majority feel they are not well informed about the European Union. The same study also revealed that a third of people do not know exactly how many Member States there are in the Union. The 2017 Eurobarometer survey shows that 89 % of young Europeans agree that national governments should strengthen school education about their rights and responsibilities as citizens of the Union. Finally, the most recent Eurobarometer survey highlights that 35 % of respondents consider comparable education standards to be the most helpful for the future of Europe.

               (15)

               Against this background, it is of the essence that Member States step up their efforts to further implement all the objectives of the 2015 Paris Declaration. It is particularly important to continue promote common values as vectors of cohesion and inclusion, favour the implementation of participatory learning environments at all levels of education, improve training for teachers on citizenship and diversity and enhance the media literacy and critical thinking skills of all learners.

               (16)

               Ensuring effective equal access to quality inclusive education for all learners, including those of migrant origins, those from disadvantaged socioeconomic backgrounds, those with special needs and those with disabilities — in line with the Convention on the Rights of Persons with Disabilities — is indispensable for achieving more cohesive societies. In this endeavour, Member States could benefit from existing Union instruments, notably Erasmus+, the European Structural and Investment Funds, Creative Europe, Europe for Citizens, the Rights, Equality and Citizenship Programme, the European Solidarity Corps and Horizon 2020, as well as the guidance and expertise of the European Agency for Special Needs and Inclusive Education.

               (17)

               The Erasmus+ programme shows that mobility and cross-border contacts are an efficient way to experience European identity. It is essential that all categories of learners across Europe benefit equally from the opportunities offered by this programme; notably through school exchanges between Member States. Virtual mobility, especially through the e-Twinning network, is an excellent tool to enable direct contact between pupils, and shall be used on a larger scale in the following years, and in combination with physical mobility.

               (18)

               Introducing a European dimension of teaching should aim to help learners experience European identity in all its diversity and strengthen a European positive and inclusive sense of belonging complementing their local, regional and national identities and traditions. It is also important for promoting a better understanding of the Union as well as an understanding of its Member States.

               (19)

               This Recommendation fully respects the principles of subsidiarity and proportionality. The content of this Recommendation is without prejudice to existing national initiatives in these fields, notably in national civic education,

         HAS ADOPTED THIS RECOMMENDATION:

      The Member States should:

      Promotion of common values

               1.

               increase the sharing of the common values set out in Article 2 of the Treaty on European Union from an early age and at all levels and types of education and training in a lifelong perspective to strengthen social cohesion and a positive and inclusive common sense of belonging at local, regional, national and Union level;

               2.

               continue to implement the commitments of the Paris Declaration, notably through:

                           (a)

                           promoting active citizenship and ethics education as well as an open classroom climate to foster tolerant and democratic attitudes and social, citizenship and intercultural competences;

                           (b)

                           enhancing critical thinking and media literacy, particularly in the use of the internet and social media, so as to raise awareness of risks related to the reliability of information sources and to help exercise sound judgment;

                           (c)

                           using existing or, where necessary, developing new structures that promote the active participation of teachers, parents, students and the wider community in schools; and

                           (d)

                           supporting opportunities for young people’s democratic participation and an active, critically aware and responsible community engagement;

               3.

               make effective use of existing tools to promote citizenship education, such as the Council of Europe’s Competences for Democratic Culture framework;

      Provision of inclusive education

               4.

               promote inclusive education for all learners, notably by:

                           (a)

                           including all learners in quality education from early childhood and throughout life;

                           (b)

                           providing the necessary support to all learners according to their particular needs, including those from disadvantaged socioeconomic backgrounds, those from a migrant background, those with special needs and the most talented learners;

                           (c)

                           facilitating the transition between various educational pathways and levels and enabling the provision of adequate educational and career guidance;

               5.

               make effective use of the European Agency for Special Needs and Inclusive Education, on a voluntary basis, to implement and monitor successful inclusive approaches in their education systems;

      Promotion of a European dimension of teaching

               6.

               promote a European dimension of teaching by encouraging:

                           (a)

                           an understanding of the European context and common heritage and values and an awareness of the unity and diversity, social, cultural and historical, of the Union and the Member States of the Union;

                           (b)

                           an understanding of the origins, values and functioning of the Union;

                           (c)

                           the participation of pupils and teachers in the e-Twinning network, in cross-border mobility, and transnational projects, especially for schools;

                           (d)

                           grass-roots projects to raise awareness of and improve understanding of the European Union in learning settings, notably through direct interaction with young people, such as an annual celebration, on a voluntary basis, of a ‘Day of the European Union’ in learning settings;

      Support educational staff and teaching

               7.

               enable educational staff to promote common values and deliver inclusive education, through:

                           (a)

                           measures to empower educational staff helping them convey common values, and promote active citizenship while transmitting a sense of belonging and responding to the diverse needs of learners; and

                           (b)

                           promoting initial and continued education, exchanges and peer learning and peer counselling activities as well as guidance and mentoring for educational staff;

      Implementing measures

               8.

               review and, where necessary, improve existing policies and practices in the field of education, training and non-formal learning with a view to acting on these recommendations;

               9.

               identify needs and enhance public engagement, using existing data or, if necessary, collecting new data with a view to improving evidence-informed policy making on the social and civic dimensions of education and training;

               10.

               continue collaborating in EU strategic cooperation frameworks in the fields of education and training, youth, sport and culture through peer learning, peer counselling and exchange of good practices with a view to promoting common values;

               11.

               make effective use of EU funding instruments, in particular Erasmus+, European Structural and Investment Funds, Creative Europe, Europe for Citizens, the Rights, Equality and Citizenship Programme and Horizon 2020 with a view to implementing these recommendations;

         WELCOMES THE COMMISSION’S INTENTION TO:

               12.

               support the Member States in implementing the provisions of this Recommendation through the available tools and funding instruments, such as the Erasmus+ programme, particularly through learning mobility at all levels of education, with a focus on schools, transnational projects, the e-Twinning network as well as Jean Monnet activities;

               13.

               support national and regional policy reforms and practice improvements through the ET2020 framework for European cooperation in education and training and any successor framework;

               14.

               where necessary, develop and regularly review practical reference tools and guidance documents for policymakers and practitioners and support research and stakeholder engagement to meet knowledge needs;

               15.

               assess and evaluate the action taken in response to this Recommendation, in particular through the ET2020 framework, including the Education and Training Monitor.

      Done at Brussels, 22 May 2018.

            For the Council

            The President

         K. VALCHEV

      (1)  COM(2017) 673 final.

      (2)  EUCO 19/1/17 REV 1

      (3)  2015 Joint Report of the Council and the Commission on the implementation of the strategic framework for European cooperation in education and training (ET 2020) — New priorities for European cooperation in education and training (OJ C 417, 15.12.2015, p. 25).

      (4)  SWD(2018) 13 final.

      (5)  Commission Decision of 27 July 2017 setting up the High-Level Commission Expert Group on radicalisation (OJ C 252, 3.8.2017, p. 3).


title: Council Recommendation of 22 June 2018 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Hungary

text:
               27.6.2018

               EN

               Official Journal of the European Union

               C 223/1

         COUNCIL RECOMMENDATION
   of 22 June 2018
   with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Hungary
   (2018/C 223/01)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(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 the second subparagraph of Article 10(2) thereof,
   Having regard to the recommendation from the European Commission,
   Whereas:

               (1)

               In accordance with Article 121 of the Treaty, Member States are to promote sound public finances over the medium term through the coordination of economic policies and multilateral surveillance in order to avoid the occurrence of excessive government deficits.

               (2)

               The Stability and Growth Pact (SGP) 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 12 July 2016, the Council recommended that Hungary achieve a fiscal adjustment of 0,6 % of GDP in 2017 unless the medium-term budgetary objective was respected with a lower effort (2).

               (4)

               Based on the Commission 2018 spring forecast and the 2017 outturn data validated by Eurostat, the growth of government expenditure, net of discretionary revenue measures and one-offs, was well above the applicable expenditure benchmark rate in 2017, which indicates a significant deviation from the required structural adjustment (namely a deviation of 2,4 % of GDP). In 2017, from a position of – 1,8 % of potential GDP in 2016, the structural balance deteriorated to – 3,1 % of GDP, which also indicates a significant deviation (namely a deviation of 1,4 % of GDP). The overall assessment indicated that the expenditure benchmark was negatively affected by three elements, namely a too-low medium-term potential growth rate and GDP deflator underlying the expenditure benchmark as well as a permanent revenue effect. After correcting for these factors, the expenditure benchmark appears to adequately reflect the fiscal effort and indicates a significant deviation. This conclusion is confirmed by the assessment of the structural balance pillar, which, after taking into account the impacts of decreasing interest expenditure, investment volatility and a revenue windfall, still indicates a significant deviation. The overall assessment therefore leads to the conclusion that the observed deviation from the medium-term budgetary objective in 2017 is significant.

               (5)

               On 23 May 2018, following an overall assessment, the Commission considered that a significant observed deviation from the adjustment path towards the medium-term budgetary objective exists in Hungary and issued a warning to Hungary in accordance with Article 121(4) of the Treaty and the first subparagraph of Article 10(2) of Regulation (EC) No 1466/97.

               (6)

               In accordance with the second subparagraph of Article 10(2) of Regulation (EC) No 1466/97, within one month of the date of the adoption of the warning, the Council is to address a recommendation to the Member State concerned to take the necessary policy measures. Regulation (EC) No 1466/97 provides that the recommendation will set a deadline of no more than five months for the Member State to address the deviation. On that basis, a deadline of 15 October 2018 for Hungary to address the deviation appears appropriate. Within that deadline, Hungary should report on action taken in response to this Recommendation.

               (7)

               Hungary’s structural balance in 2017 is estimated to have been 1,6 % of GDP away from its medium-term budgetary objective of a structural deficit of – 1,5 % of GDP. Based on the output gap projections of the Commission 2018 spring forecast, Hungary is in good economic times in 2018. Hungary’s general government debt ratio is above the 60 %-of-GDP threshold. The minimum required structural effort prescribed by Regulation (EC) No 1466/97 and the commonly agreed adjustment matrix under the SGP, which factors in the prevailing economic circumstances and sustainability concerns, amounts to at least 1 % of GDP for 2018. The Commission 2018 spring forecast projects a further deterioration of the structural balance by 0,5 % of GDP in 2018. Therefore, a minimum structural improvement of 1 % of GDP in 2018 translates into a need to adopt measures of a total yield of 1,5 % of GDP compared to the current baseline in the Commission 2018 spring forecast. Given the significant size of the required structural consolidation effort resulting from the minimum adjustment requirement, it is appropriate that no additional adjustment be required on top of the minimum 1 % of GDP requirement.

               (8)

               The required improvement of the structural balance by 1 % of GDP in 2018 is consistent with the nominal growth rate of net primary government expenditure not exceeding 2,8 % in 2018.

               (9)

               It is appropriate that this Recommendation be made public.

               (10)

               In order to achieve the recommended budgetary targets, it is crucial that Hungary adopt and strictly implement the necessary measures and monitor the development of current expenditure closely,

         HEREBY RECOMMENDS THAT HUNGARY:

               (1)

               take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 2,8 % in 2018, corresponding to an annual structural adjustment of 1 % of GDP, thereby putting the Member State on an appropriate adjustment path towards the medium-term budgetary objective;

               (2)

               use any windfall gains for deficit reduction; budgetary consolidation measures should secure a lasting improvement in the general government structural balance in a growth-friendly manner;

               (3)

               report to the Council by 15 October 2018 on action taken in response to this Recommendation; the report should provide sufficiently specified and credibly announced measures, including budgetary impact of each of them, as well as updated and detailed budgetary projections for 2018.

      This Recommendation is addressed to Hungary.
      Done at Luxembourg, 22 June 2018.

            For the Council

            The President

         V. GORANOV

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Hungary and delivering a Council opinion on the 2016 Convergence Programme of Hungary (OJ C 299, 18.8.2016, p. 49).


title: Council Recommendation of 22 June 2018 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania

text:
               27.6.2018

               EN

               Official Journal of the European Union

               C 223/3

         COUNCIL RECOMMENDATION
   of 22 June 2018
   with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania
   (2018/C 223/02)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(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 the second subparagraph of Article 10(2) thereof,
   Having regard to the recommendation from the European Commission,
   Whereas:

               (1)

               In accordance with Article 121 of the Treaty, Member States are to promote sound public finances over the medium term through the coordination of economic policies and multilateral surveillance in order to avoid the occurrence of excessive government deficits.

               (2)

               The Stability and Growth Pact (SGP) 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 16 June 2017, the Council recommended (2) that Romania take the necessary measures to ensure that the nominal growth rate of net primary government expenditure (3) does not exceed 3,3 % in 2017, corresponding to an annual structural adjustment of 0,5 % of GDP, thereby putting the country on an appropriate adjustment path toward the medium-term budgetary objective. On 5 December 2017, the Council concluded that Romania had not taken effective action in response to the Council Recommendation of 16 June 2017. On that basis, on 5 December 2017, the Council issued a revised Recommendation (4) for Romania to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 3,3 % in 2018, corresponding to an annual structural adjustment of 0,8 % of GDP.

               (4)

               In 2017, based on the Commission 2018 spring forecast and the 2017 outturn data validated by Eurostat, the growth of net primary government expenditure was well above the expenditure benchmark, which indicates a significant deviation by a large margin (namely a deviation of 3,3 % of GDP). The structural balance deteriorated to -3,3 % of GDP from a position of -2,1 % of GDP in 2016, which also indicates a significant deviation from the recommended structural adjustment by a large margin (namely a deviation of 1,7 % of GDP). The size of the deviation indicated by the structural balance is negatively impacted by a higher point estimate for potential GDP growth compared to the medium-term average underlying the expenditure benchmark, as well as by a drop in public investment, which is smoothed out in the expenditure benchmark. Irrespective of that difference, both indicators confirm a significant deviation from the requirements of the preventive arm of the SGP in 2017.

               (5)

               On 23 May 2018, following an overall assessment, the Commission considered that a significant observed deviation from the adjustment path towards the medium-term budgetary objective exists in Romania and issued a warning to Romania in accordance with Article 121(4) of the Treaty and the first subparagraph of Article 10(2) of Regulation (EC) No 1466/97.

               (6)

               In accordance with the second subparagraph of Article 10(2) of Regulation (EC) No 1466/97, within one month of the date of the adoption of the warning, the Council is to address a recommendation to the Member State concerned to take the necessary policy measures. Regulation (EC) No 1466/97 provides that the recommendation will set a deadline of no more than five months for the Member State to address the deviation. On that basis a deadline of 15 October 2018 for Romania to address the deviation appears appropriate. Within that deadline, Romania should report on action taken in response to this Recommendation.

               (7)

               Based on the output gap projections of the Commission 2017 spring forecast, Romania is in normal economic times in 2018 and 2019. Romania’s general government debt ratio is below the 60 %-of-GDP threshold. Henceforth, the minimum required structural effort prescribed by Regulation (EC) No 1466/97 and the commonly agreed adjustment matrix under the SGP, which factors in the prevailing economic circumstances and possible sustainability concerns, amounts to 0,5 % of GDP for both 2018 and 2019.

               (8)

               Romania’s structural deficit has increased by 2,1 % of GDP in 2016 and by 1,2 % of GDP in 2017, to 3,3 % of GDP in 2017. An additional and persistent effort necessary to correct the cumulated deviation and to bring Romania back on an appropriate adjustment path following the slippages in 2016 and 2017 should complement the minimum adjustment requirement. An additional effort of 0,3 % of GDP seems appropriate given the magnitude of the significant observed deviation from the recommended adjustment path towards the medium-term budgetary objective and it will accelerate the adjustment back towards the medium-term budgetary objective.

               (9)

               The required improvement of the structural balance by 0,8 % of GDP in both 2018 and 2019 is consistent with the nominal growth rate of net primary government expenditure not exceeding 3,3 % in 2018 and 5,1 % in 2019.

               (10)

               The Commission 2018 spring forecast projects a further deterioration of the structural balance by 0,4 % of GDP in 2018 and by a further 0,4 % of GDP in 2019. Therefore, a structural improvement of 0,8 % of GDP in both 2018 and 2019 translates into a need to adopt measures of a total structural yield of 1,2 % of GDP in 2018 and additional measures of a structural yield of 1,2 % of GDP in 2019 compared to the current baseline in the Commission 2018 spring forecast.

               (11)

               The Commission 2018 spring forecast projects a general government deficit of 3,4 % of GDP in 2018 and 3,8 % of GDP in 2019, which is above the 3 %-of-GDP Treaty reference value. The required structural adjustment seems also appropriate to ensure that Romania respects the 3 %-of-GDP Treaty reference value in 2018 and 2019 with a margin.

               (12)

               The failure to act upon earlier recommendations to correct the significant observed deviation and the risk of exceeding the 3 %-of-GDP Treaty reference value call for urgent action to put Romania’s fiscal policy back on a prudent path.

               (13)

               It is appropriate that this Recommendation be made public.

               (14)

               In order to achieve the recommended budgetary targets, it is crucial that Romania adopt and strictly implement the necessary measures and monitor the development of current expenditure closely,

         HEREBY RECOMMENDS THAT ROMANIA:

               (1)

               take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 3,3 % in 2018 and 5,1 % in 2019, corresponding to an annual structural adjustment of 0,8 % of GDP in each year, thereby putting the Member State on an appropriate adjustment path toward the medium-term budgetary objective;

               (2)

               use any windfall gains for deficit reduction; budgetary consolidation measures should secure a lasting improvement in the general government structural balance in a growth-friendly manner;

               (3)

               report to the Council by 15 October 2018 on action taken in response to this Recommendation; the report should provide sufficiently specified and credibly announced measures, including budgetary impact of each of them, as well as updated and detailed budgetary projections for 2018-2019.

      This Recommendation is addressed to Romania.
      Done at Luxembourg, 22 June 2018.

            For the Council

            The President

         V. GORANOV

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Council Recommendation of 16 June 2017 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania (OJ C 216, 6.7.2017, p. 1).

      (3)  Net primary government expenditure is comprised of total government expenditure excluding interest expenditure, expenditure on Union programmes fully matched by Union funds revenue and non-discretionary changes in unemployment benefit expenditure. Nationally financed gross fixed capital formation is smoothed over a four-year period. Discretionary revenue measures or revenue increases mandated by law are factored in. One-off measures on both the revenue and expenditure sides are netted out.

      (4)  Council Recommendation of 5 December 2017 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania (OJ C 439, 20.12.2017, p. 1).


title: Recommendation of the European Central Bank of 6 July 2018 to the Council of the European Union on the external auditors of Banka Slovenije (ECB/2018/18)

text:
               24.7.2018

               EN

               Official Journal of the European Union

               C 260/1

      RECOMMENDATION OF THE EUROPEAN CENTRAL BANK
      of 6 July 2018
      to the Council of the European Union on the external auditors of Banka Slovenije
      (ECB/2018/18)
      (2018/C 260/01)
      THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
      Having regard to the Treaty on the Functioning of the European Union,
      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 the national central banks of the Member States whose currency is the euro 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 Banka Slovenije’s current external auditors, Ernst & Young revizija, poslovno svetovanje, d.o.o., ended following the audit for the financial year 2017. It is therefore necessary to appoint external auditors from the financial year 2018 onwards.

                  (3)

                  Banka Slovenije has selected Ernst & Young revizija, poslovno svetovanje, d.o.o. as its external auditors for the financial years 2018 to 2020,

            HAS ADOPTED THIS RECOMMENDATION:
      It is recommended that Ernst & Young revizija, poslovno svetovanje, d.o.o. should be appointed as the external auditors of Banka Slovenije for the financial years 2018 to 2020.

         Done at Frankfurt am Main, 6 July 2018.

               The President of the ECB

            Mario DRAGHI