               EUROPEAN COMMISSION
            Brussels, 13.5.2015
            COM(2015) 257 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2015 National Reform Programme of Estoniaand delivering a Council opinion on the 2015 Stability Programme of Estonia

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the 2015 National Reform Programme of Estonia

                  and delivering a Council opinion on the 2015 Stability Programme of Estonia

               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 the recommendation of the European Commission
                  2
               ,

               Having regard to the resolutions of the European Parliament
                  3
               ,

               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. The strategy focuses on the key areas where action is needed to boost Europe’s potential for sustainable growth and competitiveness.

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

               (3)On 8 July 2014, the Council adopted a Recommendation on Estonia’s National Reform Programme for 2014 and delivered its opinion on Estonia’s updated Stability Programme for 2014. On 28 November 2014, in line with Regulation (EU) No 473/2013
                  4
               , the Commission presented its opinion on Estonia’s draft budgetary plan for 2015
                  5
               .

               (4)On 28 November 2014, the Commission adopted the Annual Growth Survey
                  6
               , marking the start of the 2015 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
                  7
               , in which it did not identify Estonia as one of the Member States for which an in-depth review would be carried out.

               (5)On 18 December 2014, the European Council endorsed the priorities for boosting investment, accelerating structural reforms and pursuing responsible growth-friendly fiscal consolidation.

               (6)On 26 February 2015, the Commission published its 2015 country report for Estonia
                  8
               . This assessed Estonia’s progress in addressing the country-specific recommendations adopted on 8 July 2014.

               (7)Estonia did not submit a National Reform Programme by the deadline.

               (8)Estonia is currently in the preventive arm of the Stability and Growth Pact. The incoming government did not submit a Stability Programme by the deadline. Based on the Commission's 2015 spring forecast the headline surplus recorded in 2014 is projected to turn into a deficit of 0.2% of GDP in 2015 and 0.1% of GDP in 2016. The government debt ratio is forecast to gradually decline from 10.6% of GDP in 2014 to below 10% of GDP in 2016. Based on the Commission's 2015 spring forecast, there is a risk of some deviation from the medium-term objective in 2015 since the structural balance is projected to deviate from the medium-term objective by 0.4% of GDP. The deviation is set to become significant in 2016 when an improvement by 0.4% of GDP is required but the structural balance is projected to worsen by 0.3% of GDP. Therefore, further measures will be needed in 2015 and 2016. Based on its assessment and taking to account the Commission's 2015 spring forecast, the Council is of the opinion that there is a risk that Estonia will not comply with the provisions of the Stability and Growth Pact.

               (9)Estonia’s employment rate reached 74.5 % of the working-age population in the third quarter of 2014 and the unemployment rate dropped to 7.6 %, the lowest level since 2009. The proportion of long-term unemployed is well below the EU average. However, the shrinking labour force, combined with low labour productivity, is becoming a medium-to-long-term challenge. Implementation of the ambitious Work Capacity Reform has started only recently. While a number of tax-related measures have been adopted to increase labour market participation, they do not specifically target low-income earners. The gender pay gap is one of the widest in the EU. A lack of childcare facilities makes it more difficult for young parents, in particular mothers, to return to the labour market. The proportion of students in workbased apprenticeships is also low. There is a shortage of graduates in technology and science subjects. The quality of local authority labour and social services is uneven.

               (10)The Estonian government adopted a lifelong learning strategy in early 2014 and programmes to implement it were presented in March 2015. A reform of curricula in the vocational education and training system is ongoing and participation in lifelong learning has increased. An Adult Education Act and a Professions Act were adopted by parliament in early 2015. The attractiveness of vocational education and training and apprenticeships remains a challenge. Research and innovation systems and cooperation between business, higher education and research institutions have improved. However, public support for research and innovation, under the RDI Strategy and the Entrepreneurship Growth Strategy, seems to lack coordination and should focus more on a limited number of smart specialisation areas. The higher education system, in particular as regards science and technology, still needs to be better aligned with the needs of business and research institutions. Investment in intellectual property is low and few companies work together with research institutions.

               (11)In the context of the European Semester, the Commission has carried out a comprehensive analysis of Estonia’s economic policy and published it in the 2015 country report. It has also assessed the follow-up given to the recommendations addressed to Estonia in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Estonia but also their compliance with EU rules and guidance, given the need to strengthen the overall economic governance of the European Union by providing EU-level input into future national decisions. The recommendations under the European Semester are reflected in recommendations 1 to 3 below.

               (12)In the light of this assessment, the Council has examined Estonia’s Stability Programme and its opinion
                  9
                is reflected in particular in recommendation 1 below.

               (13)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. Estonia should also ensure the full and timely implementation of these recommendations,

               HEREBY RECOMMENDS that Estonia take action in 2015 and 2016 to:

               1.Avoid deviating from the fiscal medium-term objective in 2015 and 2016.

               2.Improve labour market participation, including by implementing the Work Ability Reform. Improve incentives to work through measures targeting low-income earners. Take action to narrow the gender pay gap. Ensure highquality social and childcare services at local level.

               3.Increase participation in vocational education and training, and its labour market relevance, in particular by improving the availability of apprenticeships. Focus public support for research and innovation on a limited number of smart specialisation areas.

               Done at Brussels,

                     For the Council

                     The President

                     (1)
                  OJ L 209, 2.8.1997, p. 1.

                     (2)
                  COM(2015) 257.

                     (3)
                  P8_TA(2015)0067, P8_TA(2015)0068, P8_TA(2015)0069.

                     (4)
                  OJ L 140, 27.5.2013, p. 11.

                     (5)
                  C(2014) 8802 final.

                     (6)
                  COM(2014) 902.

                     (7)
                  COM(2014) 904.

                     (8)
                  SWD(2015) 26 final.

                     (9)
                  Under Article 5(2) of Council Regulation (EC) No 1466/97.


Avis juridique important

|

52000SC0529

Draft Recommendation No 1/2000 of the Joint Committee of the European Community and Switzerland in respect of the simplification of certain veterinary checks on third country products of animal origin transiting the European Community to Switzerland - Draft common position of the Community  /* SEC/2000/0529 final */

Draft RECOMMENDATION NO 1/2000 OF THE JOINT COMMITTEE OF THE EUROPEAN COMMUNITY AND SWITZERLAND in respect of the simplification of certain veterinary checks on third country products of animal origin transiting the European Community to Switzerland - Draft common position of the Community(presented by the Commission)EXPLANATORY MEMORANDUM1 The agreement between the European Economic Community and Switzerland on the simplification of inspections and formalities in respect of the carriage of goods entered into force on July 1st 1991 [1].[1]  JO L 116, 8.5.1990, p. 18.2 In accordance with Article 34 of Council Directive 97/78/EC laying down the principles governing the organisation of veterinary checks on products entering the Community from third countries [2], Member States must apply from 1st July 1999 the regulations and administrative provisions necessary to comply with the Directive.[2]  JO L 24, 30.1.1998, p. 9.3 Council Directive 97/78/EC formulates new rules for veterinary controls in the case of transit of consignments from one third country to another third country across the EC, in order to safeguard animal and public health.4 The new rules are laid down in Article 11 of Directive 97/78/EC in particular in paragraph 2 c, d and e, which require that transiting goods are sent under customs control from the border post of entry across the EC to a specified border post of exit where their departure from the Community must be certified by the Official Veterinarian. He must countersign the Annex B certificate accompanying the consignment and return it to the official veterinarian at the border post of entry, to confirm the exit from the Community of the consignment.5 Concerns have been expressed by the Swiss competent authorities that the requirement for an exit check for products transiting the EC has the potential to cause serious delays for consignments that arrive at border inspection posts situated on the borders between Switzerland  and its European Community neighbours-France Germany, Austria and Italy.6 In this context it is envisaged that an enhanced system of co-operation between the veterinary services of Switzerland and the EC be introduced. This co-operation is to be organised for certain border inspection posts where the flow of road traffic risks being paralysed without such an agreement.7 As a result, recommendation No 1/99 has already been put forward as the common position of the Community for consideration on this matter, but only lists border posts in two Member States, France and Germany.8. The present recommendation therefore adds the names of two Italian border inspection posts to the annex to recommendation No 1/99.9. Therefore the Commission requests Council to adopt as the Community position the text of the present recommendation.Draft RECOMMENDATION NO 1/2000 OF THE JOINT COMMITTEE OF THE EUROPEAN COMMUNITY AND SWITZERLAND in respect of the simplification of certain veterinary checks on third country products of animal origin transiting the European Community to SwitzerlandThe Joint Committee,Having regard to the Agreement between the European Economic Community and the Confederation of Switzerland on the simplification of inspections and formalities in respect of the carriage of goods, and in particular articles 5, 11 paragraph 1, and 17 paragraph 1,Whereas:(1) It has been necessary to foresee a simplification of certain veterinary controls for products of animal origin in transit from a third country to Switzerland across the European Community.(2) In recommendation No 1/99 of the joint committee an enhanced system of co-operation between the veterinary services of Switzerland and the EC has been introduced and  this co-operation will be organised for certain border inspection posts where flow of road traffic risks being paralysed without such an agreement.(3) The recommendation No 1/99 put the new system in place for the border inspection posts in Germany and France only and this system should be extended to include the posts in Italy, that is to say Chiasso/Ponte Chiasso and Gran San Bernado/Pollein.RECOMMENDS to the Contracting Parties to the Agreement:that the annex to the recommendation No 1/99 be amended by the addition of the following border inspection posts: "Italy:   Ponte Chiasso / Chiasso  Italy:  Gran San Bernardo / Pollein"Done at Brussels, For the Council The President


               EUROPEAN COMMISSION
            Brussels, 22.5.2017
            COM(2017) 517 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2017 National Reform Programme of Maltaand delivering a Council opinion on the 2017 Stability Programme of Malta

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the 2017 National Reform Programme of Malta

                  and delivering a Council opinion on the 2017 Stability Programme of Malta

               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 the recommendation of the European Commission,
                  2

               Having regard to the resolutions of the European Parliament,
                  3

               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,
                  4
                marking the start of the 2017 European Semester of 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,
                  5
                in which it did not identify Malta as one of the Member States for which an in-depth review would be carried out. On the same day, the Commission also adopted a recommendation for a Council Recommendation on the economic policy of the euro area. That Recommendation was endorsed by the European Council on 9-10 March 2017 and adopted by the Council on 21 March
                  6
               .

               (2)As a country whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Malta should ensure the full and timely implementation of the Recommendation for the euro area which is reflected in recommendation 2 below.

               (3)The 2017 country report for Malta
                  7
                was published on 22 February 2017. It assessed Malta’s progress in addressing the country-specific recommendations adopted by the Council on 12 July 2016, the follow-up given to the recommendations adopted in previous years and Malta’s progress towards its national Europe 2020 targets.
                  8

               (4)On 18 April 2017, Malta submitted its 2017 National Reform Programme and on 2 May 2017 Malta submitted its 2017 Stability Programme. To take account of their interlinkages, the two programmes have been assessed at the same time.

               (5)The relevant country-specific recommendations have been taken into account in the Member States' programmes for the European Structural and Investment Funds (ESI Funds) covering the 2014-2020 period. As foreseen in the legislation governing the ESI Funds,
                  9
                where it is necessary to support the implementation of relevant country-specific recommendations, the Commission may request a Member State to review and amend its relevant ESI Funds programmes. The Commission has provided further guidelines on the application of those rules.
                  10

               (6)Malta is currently in the preventive arm of the Stability and Growth Pact. In its 2017 Stability Programme, the government plans to maintain a surplus in headline terms over 2017-2020. The medium-term budgetary objective — a balanced budgetary position in terms of GDP — continues to be met with a positive margin throughout the programme period. According to the Stability Programme, the general government debt-to-GDP ratio is expected to remain below the 60% of GDP reference value and to gradually decline from 58.3% of GDP in 2016 to 47.6% in 2020. The macroeconomic scenario underpinning these budgetary projections is plausible for 2017 and cautious for 2018-2020. At the same time, there are possible implementation risks related to budgetary execution.

               (7)On 12 July 2016, for 2017 the Council recommended Malta to achieve an annual fiscal adjustment of 0.6% of GDP towards the medium-term budgetary objective. Outturn data indicate that Malta already reached its medium-term budgetary objective in 2016. Based on the Commission 2017 spring forecast, the structural balance is forecast to increase from a surplus of 0.4% of GDP in 2017 to 0.7% of GDP in 2018, remaining above the medium-term budgetary objective. Overall, the Council is of the opinion that Malta is projected to comply with the provisions of the Stability and Growth Pact in 2017 and 2018.

               (8)Notwithstanding the achievement of the medium-term objective three years ahead of the target, expenditure increases outpaced potential output growth. If sustained further, this poses a challenge to the sustainability of public finances, especially in the case of unanticipated shocks to revenues. The authorities carried out spending reviews, in some areas of public spending particularly relevant in terms of sustainability — healthcare, education and training and social security. Timely and effective implementation of the ensuing recommendations will determine their effectiveness in achieving their goal. In addition, Malta's public finances continues to face sustainability risks in the long-term due to the projected costs linked to population ageing, such as health care, long-term care and pensions. The steep increase in projected age-related expenditure is mainly due to pension expenditure, which is estimated to increase by 3.2 percentage points of GDP by 2060 according to the 2015 Ageing Report. Some of the recently introduced measures are likely to generate savings. However, these savings are unlikely to be sufficient to offset mounting spending pressures and decisively improve long-term sustainability. Further measures could, therefore, be necessary.

               (9)Malta has put forward several measures to address the dual challenge of sustainability and ensuring adequate retirement incomes posed by the pension system. Measures introduced in the 2017 budget are expected to moderately lower the poverty risk for older people and improve somewhat the net replacement rate of the guaranteed minimum pension. Overall, pension adequacy indicators still indicate considerable room for improvement including on reducing the high gender coverage gap.

               (10)Road traffic congestion has become a barrier to business, and its external (economic and environmental) costs have been estimated at 274 million euros per year and are projected to increase. In addition, emissions of greenhouse gases from traffic continue growing and Malta is likely to fail to reach its 2020 emission targets. Malta has adopted an ambitious National Transport Strategy with a 2050 horizon and an Operational Transport Master Plan to 2025. They include a diverse set of measures to rationalise the use of private cars, promote alternative mobility solutions and make more efficient use of multimodal and collective transport systems. While these measures are projected to make significant improvements, congestion is still projected to rise and greenhouse gas emissions from transport to decrease only modestly until 2030.

               (11)The financial system is characterised by a significant number of foreign institutions attracted, among other factors, by the favourable tax environment. Malta is the only EU Member State utilising the full imputation system of company taxation and it offers a refundable tax credit scheme. It has an extensive network of double taxation treaties, and it has an attractive tax residency status for individuals. The supervision of the internationally-oriented business, however, is challenging. The financial sector carries out most of its activities outside Malta. The ability of a relatively small supervisory authority to oversee a large system, in particular in the insurance sector but also in banking, is under pressure. The Malta Financial Services Authority, in consultation with the ECB, has recently requested the withdrawal of the banking licence of a small internet banking provider that collects deposits also outside Malta.

               (12)Despite progress, further improvements in the efficiency of the justice system remain necessary. Although new measures on second chance and insolvency have been proposed by the government, lengthy insolvency and discharge procedures harm the quality of the business environment in Malta. Moreover, the framework of debt discharge does not provide for a time limit, thus it lacks legal certainty. To address the shortcomings, a draft amendment to the Companies Act introducing considerable changes to the legal framework on insolvency, such as the possibility of mediation, was tabled and is currently being considered by the national parliament. The impact of these changes in their final scope and formulation remains to be analysed.

               (13)Labour shortages are emerging across the skills spectrum and the adjustment of skills supply to labour market needs is still incomplete. A substantial share of the Maltese labour force still has low qualifications. While educational attainment is increasing, the rate of early school leaving remains high and basic skills attainment among young people is still weak. Access and participation in lifelong learning — with the involvement of employers — is improving including for the low-skilled, but given the extent of the challenge, efforts need to be sustained. Significant investments in the education and training system are expected to bear fruit, especially if the measures are maintained and improved in the future, notably through the recently established National Skills Council. Employment rates are steadily improving and the unemployment rate has dropped below 5 %. However, labour market participation is still among the lowest in the EU, in particular for older and low-skilled women, which also points to remaining social exclusion risks for those who are not equipped to adjust to a fast changing economy. Therefore, current policy investments need to be sustained and further developments are to be closely monitored.

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

               (15)In the light of this assessment, the Council has examined the Stability Programme and its opinion
                  11
                is reflected in particular in recommendation 1 below,

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

               1.Expand the scope of the ongoing spending reviews to the broader public sector and introduce performance-based public spending.

               2.Ensure the effective supervision of internationally oriented business by financial institutions, licensed in Malta in cooperation with the host supervisors in the countries where they operate.

               Done at Brussels,

                     For the Council

                     The President

                     (1)
                  OJ L 209, 2.8.1997, p. 1.

                     (2)
                  COM(2017) 517 final.

                     (3)
                  P8_ TA(2017)0038, P8_ TA(2017)0039, and P8_ TA(2017)0040.

                     (4)
                  COM(2016) 725 final.

                     (5)
                  COM(2016) 728 final.

                     (6)
                  2017/C92/01

                     (7)
                  SWD(2017) 83 final.

                     (8)
                  COM(2017) 90 final.

                     (9)
                  Article 23 of 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.

                     (10)

                        COM(2014) 494 final.

                     (11)
                  Under Article 5(2) of Council Regulation (EC) No 1466/97.


title: DRAFT COUNCIL RECOMMENDATION TO THE MEMBER STATES CONCERNING THE RECOVERY AND REUSE OF WASTE PAPER AND BOARD (submitted to the Council by the Commission)

text:
ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (80) 237
Vol. 1980/0074
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                        COM(80)237 final.
                                                        Brussels / 12 May 1980
                                    A
                       A            "           ^
                       /*v£Y                     f. -A
                      pf 1 H -'Ù5- të-d £~j
                       &     Sort» du SectéterM £_<>■:/
                             '     Gênéul      /"/./
           DRAFT COUNCIL            NDATION TO THE MEMBER STATES
     CONCERNING THE RECOVERY AND REUSE OF WASTE PAPER AND BOARD
             ( submitted to the Council by the Commission )
C0MC80 ) 237 final .
 ---pagebreak---                               EXPLANATORY  MEMORANDUM
Introduction                                      -
                      ;          .                      * y. .
The European Community Action Programme on the Environment 1977 - 1981 ,
which was approved by a declaration of the Council of the European       -
Communities and representatives of the Member States meeting in Council
on 17 May 1977 ( 1 ), explains th ? need for an " active anti-waste policy "
and sets out priorities in this field - the recycling of waste paper and
board is one such priority . The Programme covers the prevention of waste ,
its reclamation and recycling as well as eventual reuse .
            ».
The Committee on Waste Management , ( 2), established to aid the Commission
in the formulation of a Community anti-waste policy , adopted the recovery
and reuse of waste paper and board as its first priority and approved , at
the meeting of 4 October 1977, a programme of work in this field .
Economic Aspects
                                                                           ►      \
1.   In its reply to the Commission 's questionnaire of 14 July 1978 , the
     European Confederation of the Pulp, Paper and Board Industry , ( CEPAC ),
     calculated the EEC annual deficit in' fibrous raw materials in the
     paper sector ( paper, pulp , wood and waste paper ) in 1976 to be 16 million
     tonnes a year ( converted into tonnes of paper equivalent ) against a
     consumption of paper and board of 30 million tonnes a year-. Consumption
     of approximately 30 million tonnes has therefore been covered to the
     tune of 14 million tonnes , ( i.e. about 45% ) by fibres of Community
     origin ( 3). Of these 14 million tpnnes , only 5 million are wood fibres
     comming from Community forests , the remaining 9 million tonnes, being
     fibres recycled from waste paper ; this represents a recovery rate of
     about 32% ( 4 ). /                                        ;
(1)     CoJ . Nos C 139 of 13 June 1977
( 2)    O.J. No : L 115 of 1 May 1976
( 3)    Although it should be remembered that fibre recycled within' the
        Community may have been imported from third countries .                 *
(4)     The recovery rate represents the ratio between the total tonnage of
        waste paper recovered and the apparent consumption of paper and board .
 ---pagebreak--- Again , taking the 1976 consumption of 3,0 m.Kllon tonnes and bearing in
mind that approximately 15% ends up in Long-Lived products or is irre
coverable , (5 miLLion tonnes ), the quantity of waste paper which is
theoreti calLy recoverable within the E.E.C. amount 's to around 25 mil
 lion tonnes .   Of this only about 10 million tonnes are recovered at
present .    Approximately 15 million tonnes are still being disposed of
as waste , mainly in general household waste .   The European economy is
therefore losing the raw material value of these 15 million tonnes .
 ( Assuming disposal costs of around 30 UCE per tonne of household refuse ,
their disposal is costing the economy more than 450 million UCE per
year in waste disposal costs .)
Observing that the total quantity of waste produced in the Community
can be estimated at 1.700 million tonnes per year , the Community Action
Programme on the Environment states that the Community must promote an
active policy to combat waste by , inter alia :
a . reducing the pollution caused by the accumulation of waste ;
b - contributing to the harmonious development of economic activity
     in accordance with the aims of the EEC Treaty , a development which
     can only be inhibited by the increased cost of raw materials , by
     the Community 's dependence on others with regard to supply and , in
     the long term , by the growing scarcity and consequent increased
     cost of certain raw materials .
 It remains to be seen whether , and under what circumstances , Community
 resources of wood and waste paper can be used and developed .    The fore
 casts of the Food and Agricultural Organization of the United Nations
 ( F.A.O. ), and of CEPAC in their answer to the Commission questionnaire of
 14 July 1978 show that external supplies may well be difficult in the
 medium and long term .
The most favourable projection shows that the wood pulp production of
 Scandinavia , which is currently the main supplier of the E.E.C. , will
 increase by 35% between 1970 and the year 2000 - an increase of roughly
 6 million tonnes .   In view of the trend towards greater integration in
 ---pagebreak--- the Scandinavian industry , it is probable that this extra quantity
will be delivered in the form of paper and- not pulp .
                                                   <
 For South America , the forecasts depend very much on how internal con
sumption develops .   The available quantity of paper pulp, however seems
unlikely to exceed 1 million tonnes before 1990 .     Investment in Africa
is not sufficient to have a decisive      influence on supplies to the Com
munity before the year 2000 .
Supplies from Asiart countries will be largely used to meet domestic
needs in the foreseeable future and any surplus quantities seem likely
to be directed towards Japan .     Also the export policies of these coun
tries may be unpredictable .     Thus it is to North America , and in parti
cular Canada , to whom the Community must look to ensure the supply of
imported pulp to Europe between now and the year 2000 .      North America
supplies to the Community are of marginal importance in relation to
their domestic market since they barely account for 10% of output -
but represent a significant percentage of EEC imports and this dominant
position in supplying the Community market will grow stronger .      These
countries' export prices and quantities will be largely determined by
their internal demand and will be an additional cause of instability in
the Community market .                                          ,x
The Community 's dependence on external factors and the uncertainty of
supplies from non-member countries make it all the more urgent for the
E.E.C. to develop its own resources policy to the fullest extent possi
ble since further development of E.E.C. pulp wood supply will merely
enable the future pulp deficit to be kept at its present level . ;
An E.E.C. own resources policy should therefore be based on pulp wood
and waste paper .   This policy should be developed in parallel with
 research to find alternative uses for waste paper , which will have the
added benefit of increasing stability in the waste paper market , al
though paper making seems likely to remain the predominant outlet for
waste paper .                  -                          -r
 ---pagebreak--- 4 . The following more detailed points on the waste paper situation allows a more
       accurate picture to be formed of the conditions'" and limits applying to
       its re-use and of the measures required , where appropriate , to increase
       consumption .
      a . Firstly , whilst the development of pulp wood resources in the Com
           munity has been on a limited scale , waste paper has already been
           developed to a significant extent and , in general , the optimum rate
           of utilisation could be reached even more quickly .
      b . The general trend is confirmed by a recent report by the O.E.C.D. ( 1 ).
           The report shows that there was a fairly sustained growth in waste
           paper usage in 1973-4 , a noticeable contraction in 1974-5 and a re
           covery in 1975-6 .  It should also be noted , however , that in the Mem
           ber States , except for the Netherlands , Italy and to a lesser extent
           the Federal Republic of Germany , the demand for all categories of waste
           paper did not increase between 1973 and 1976 .
           It should be understood that the economic crisis and the resulting
           economy measures , particularly in packaging , have dampened the growth
           of paper and board consumption .     1978 levels barely reached those of
           1973 .
      c . Demand for waste paper between 1973 ana 1976 was quality based . In
           categories III ( high quality waste paper ) and IV ( mixed papers ) demand
           fell in almost every case .   For category I (newspapers and magazines )
           and even more so in category II ( corrugated paper ) demand rose in
           nearly all Member States .
      d - in general the likelihood of increased waste paper utilisation remains
           firm , but it is likely to be less than the 12 to 13 million tonnes of
           waste paper by 1980 which the Massus report           (2 ), basing itself on
           a mean annual growth rate of 5% , predicted .         This is because many fac
           tors in the economic environment have changed since the onset of the
           crisis .  Growth in the consumption of waste paper, in particular , is
 ( 1 ) " Structure and evolution of the supply and demand for the various qualities
         of waste paper " - O.E.C.D. ( DSTI / IND / PP / 78-0 ?) of 21 March 1978 . ( p. 18 )
 (2 ) Waste Paper in the E.E.C. - 1974
 ---pagebreak---      much weaker in view of the direct link between consumption and the
     quantities of waste paper recycled .                   "
e.   Future action at Community level should take the problems of fibrous
     paper resources and environmental protection into account .       The fol
      lowing priority measures with regard to demand for waste paper must
     be considered :
     i.    the different preparatory techniques , especially de-inking and
           decontamination aspects , should be improved in order to make .
           paper products which contain a certain proportion of recycled
           fibres competitive in the eyes of the consumer both with regard
           to quality and prire .   The Community 's research programme is
           designed to achieve this improvement     (1 );
     ii * the compulsory use by public authorities of recycled paper, for
           office purposes    and  for  hygiene           papers should be
           promoted .  However insignificant this measure might at first
           appear , its impact would be considerable in view of the amount
         - of paper which the authorities in the Member States , and the
                                                          •  ' '           f
           Commission , consume ;
     iii. existing specifications for the various paper products should
           be re-examined to ensure that the quality of paper and board
           manufactured is best suited to its use . More waste paper might
           thus be used , while investment and operating costs would be
           reduced since certain stages of production such as bleaching
           might turn out to be unnecessary .
     These measures should be accompanied by two supporting actions :
       ~   the public should be made more aware of the benefits and
           availability of recycled paper ;
       -   consultation procedures     between the paper industry, paper
           users , the recovery trade and the public authorities should
           be set up, where they do not already exist . ;
( 1 ) O.J. No : L 107 of 21 April 1978 .
 ---pagebreak--- 5. In conclusion it should be remembered that :
                                                      *
   - each recycled tonne of waste paper enables a substantial saving of
       wood to be made , since , very roughly , one tonne of chemical pulp
       requires 3.5 tonnes of wood,    (this observation would hold good ,
       even though a greater use of pulp wood may be desirable in the inte
       rests of sound management of forestry resources );
   - it can be less polluting to use recycled fibres rather than paper
       pulp   ( if one considers the manufacturing processes involved.) The
       elimination of the sludge resulting from de-inking does , however ,
       raise problems ;
   - experience shows that if waste paper rather than domestic virgin
       pulp is used a very significant amount of energy can be saved over
       the entire production cycle .
   International Action
Other international bodies have also studied this problem .        The
Waste Management Policy Group of the O.E.C.D. in particular has followed
similar lines and is presently finalising a Recommendation which will be
forwarded to the O.E.C.D. Environment Committee . The aims of the O.E.C.D. draft
Recommendation are parallel in concept to those in the annexed draft
Recommendation .
   Action by the European Community
In 1975 the Council adopted the Directive on Waste        ( 75 /442/ EEC ), which
sets out the basis for the elimination , recovery and reuse of wastes and
which makes the Member States responsible for measures to promote these
aims .
The Committee on Waste Management , established in 1976 to aid the Commis
sion as a high level      advisory     body has already adopted the recovery
and reuse of waste paper and board as a first priority issue , has approved
a programme of work in this field and supports the principles and aims of
this Recommendation .
 ---pagebreak---                                7 -
Brief summary of the situation in the Member States
Belgium : A recommendation on using more recycled paper and board in
the public service exists but existing specifications need to be re
vised before any worthwhile results can be achieved .     There is no
                                                                    ι
 legal requirement for the use of an identification markn.
Denmark : The national administration is obliged to use recycled paper
as far as possible .     There is no legal requirement for the use of an
 identification mark .
 Federal Republic of Germany : There is no obligation on the public
services at present to use recycled paper and board , but the possibility
of lowering specifications to enable more' recycled products to be used
is being examined .    ( The Innenministerium tnes to use as much recycled
 paper as possible .)
France : Has been developing an active policy to increase the recovery
and re-use of waste paper .     Via the intermediary of the Intervention
Fund for the Improvement of Nature and the Environment ( FIANE ) the
Ministry of Industry has earmarked FF 3.8 million to promote the re
cycling of waste paper .     In 1978 there was a substantial increase in
the measures to promote the recovery and re-use of waste paper , i.e. y
  a ) increase in funds to promote waste paper recycling ;
  b ) de-inking plant capacity stepped up from 10.000 to 20.000 tonnes
      per year . The ultimate aim is to reach 100.000 tonnes per year ;
  c ) development of outlets for recycled paper by means of a government
      circular urging ministries , departments and public undertakings to
      make priority use of recycled paper and by means of agreements to
      be concluded with industry to determine the extent to which recycled
      fibres can be used .   Since 1 January 1978 the Official Journal of
      the French Government has been printed on recycled paper .
                                                                      I
 ---pagebreak--- Ireland :    No action at present .     *                 .   •
Italy :   Public services are being encouraged to use recycled paper and          i
          board .                                  -                               i
Luxembourg :    All public services are recommended to order and use recycled        I
                paper "as much as possibLe" for reproduction and copying.            j
Nether lands :    There is no obligation on the public services to use recycled
                  paper and board
United Kingdom :     No obligation exists , but the authority responsible for
                     buying paper and board for Central Government gives a
                     "measure of preference " to products with a recycled content
                     and the authorities' technical staff work together with the
                     paper industry to develop specifications which will enable a
                     greater use to be made of products containing recycled fibres .
Conc lus ion
The annexed draft Recommendation recognises that there are three main aspects
to the problem of reusing waste paper and board . Firstly , it aims to carry out
the tasks set out in the Action programme on the Environment . It is secondly ,
a logical extension of the action begun by the Directive on Waste ( 75 / 442 / EEC )
in that it gives precision to the general policy aims set out in that framework
Directive . Finally it recognizes that there      are  important and complex economic
problems to be solved .
Given the involved nature of the prob.lem outlined above , the fragmentary response
to this problem in the Member States , and without prejudicing any formal proposal
that the Commission might find desirable or necessary to submit at a later date ,
it is proposed that the Council should address a Recommendation to the Member
States that they base their future national actions in this field on the aims
and principles which are referred to therein .
 ---pagebreak--- In the opinion of 'the Commission , a Council Recommendation is the better
response to the problems outlined above . It is a quick response to a given
altuatlon, a response moreover which has the,ba?k.1ng -of a majority of the
Member States and the Committee on Waste Management . In the case where the
annexed draft Council Recommendation demonstrably does not achieve its aims,
the Commission will submit additional proposals as ne'cessary .
 ---pagebreak--- DRAFT    COUNCIL -   RECOMMENDATION TO THE M C MBER STATES CONCERNING THE RECOVERY
                                                *   • • «
AND .REUSE OF WASTE PAPER AND BOARD
THE    COUNCIL     OF THE EUROPEAN COMMUNITIES
Having regard to the Treaty establishing the European Economic Community, and
in particular Article 235 thereof ,
Having regard to the draft Recommendation submitted by the Commission ,
Having regard to the Opinion of the European Parliament ,
Having regard to the Opinion of the Economic and Social Committee ,
    Whereas the Resolution of the Council of the European Communities and
    of the Representatives of the Governments of the Member States meeting
    within the Council of 17 May 1977 on the continuation and implementation
    of a European Community policy and action programme on the environment
    states that priority . in work on waste shall be given , inter alia , to
    the question of waste paper ;
    Whereas Article 3(1 ) of Council Directive 75 / 442 / EEC of 15 July 1975
             <1 >
    on waste       states that Member States shall take appropriate steps
    to encourage the prevention , recycling and processing of waste , the
    extraction of raw materials and possibly of energy therefrom and
    any other process for the re-use of waste ;
   Whereas waste paper constitutes a significant percentage of urban
    waste and is technically recoverable as a valuable secondary raw
    material for the manufacture of certain paper and board products ;
    Whereas the production of paper and board using recycled fibres
    consumes less energy and can be less polluting than the same production
    using virgin raw materials ;
             No :    m of 25 July 1975
 ---pagebreak--- Whereas there is a deficiency ( over 50% ) in the Community 's present needs
    ■   ' '        *                            •  >
of raw materials for paper and board manufacture which has to be made up
by imports from non-member countries ;
RECOMMENDS that Member States define and implement policies to promote
the use of recycled paper and board and particularly :
- encourage the use of recycled - and recyclable - paper and board, '
   especially in the national administrations , public bodies and those
  national official services which can set an example ;
- encourage where feasible, the use of recycled paper and board
  containing a high percentage of mixed waste paper ;
            Ν
                                • •    *
- re-examine , in the light of recent technological advances , the
      /
  existing specifications for paper products which restrict , for
                                                         ' *
  reasons other than adequacy of a product for its task , the use
  of recycled paper ;
  implement programmes of consumer and manufacturer education to
  promote paper and board products made from recycled fibres ;
  develop and promote uses for waste paper other than as raw material
  for the manufacture of paper and board .        ,


title: RECOMMENDATION FOR A COUNCIL DECISION AUTHORIZING THE COMMISSION TO OPEN NEGOTIATIONS WITH THIRD COUNTRIES HAVING TEXTILE AGREEMENTS WITH THE COMMUNITY WITH A VIEW TO ADAPTING THOSE AGREEMENTS TO TAKE ACCOUNT OF THE GERMAN UNIFICATION

text:
2. 10. 90                                    Official Journal of the European Communities                                     No C 248/1
                                                                      II
                                                             (Preparatory Acts)
                                                       COMMISSION
                              The Community and German unification — Proposals for legislation (x)
                                                            COM (90) 400 final
                                          (Submitted by the Commission on 22 August 1990)
               i1} Already published in Official Journal of the European Communities No C 230 of 15 September 1990:
                   — Proposal for a Council Directive on interim measures applicable after the unification of Germany, in
                      anticipation of the adoption of transitional measures by the Council in cooperation with the European
                      Parliament
                   — Proposal for a Council Regulation on interim measures applicable after the unification of Germany, in
                      anticipation of the adoption of transitional measures by the Council after consultation of the European
                      Parliament
                                                          Recommendation for a
                                                          COUNCIL DECISION
                                                                   of . . .
               authorizing the Commission to open negotiations with third countries having textile agreements with
               the Community with a view to adapting those agreements to take account of the German
                                                                 unification
                                                               (90/C 248/01)
Introduction                                                                   The Commission services have agreed with the
                                                                               authorities of the German Democratic Republic and the
1. The recently signed Treaty (Staatsvertrag) between the                      Federal Republic of Germany by means of an Exchange
    Federal Republic of Germany and the German                                 of Letters which measures were to be introduced by the
    Democratic Republic deals, inter alia, with the                            former German Democratic Republic for the second half
    progressive integration of the former German                               of 1990 to ensure that the Community commercial policy
    Democratic Republic into the legal system of the                           in the textile sector is not circumvented.
    Community in advance of the formal unification of the
    two German States.
    In pursuit of the objectives outlined in the
    abovementioned Treaty, the Council of the European                      2. Following the unification of the two Germanies, the
    Communities         has     adopted      Regulation      (EEC)             unified Germany is expected to apply the acquis
    No 1794/90 of 28 June 1990 dealing with transitional                       communautaire on textiles. However, in order to take
    measures concerning trade with the German Democratic                       account of the new situation for textile and clothing
    Republic ( ! ). Article 2 (1) (a) of that Regulation provides              imports in the unified Germany, all bilateral agreements
    that the German Democratic Republic shall introduce                        with third countries and arrangements with preferential
    into its trade with third countries the Common Customs                     countries, concluded under the 1986 textile negotiating
    Tariff, Community customs legislation and other                            Directives or under subsequent specific negotiating
    common commercial policy measures. These measures                          Directives (China and USSR) will be amended. The
    are to be applied as from 1 July 1990.                                     Commission, therefore, needs negotiating directives
                                                                               which will authorize the Commission to negotiate such
(') OJ NoL 166, 29. 6. 1990, p. 1.                                             adaptations with all the countries concerned.
 ---pagebreak--- No C 248/2                              Official Journal of the European Communities                                 2. 10. 90
3. The amendments could be effected by increasing the              5. Concurrently with these amendments, the Community
   Community quotas by a certain percentage and by                    should update the Community global ceilings for
   allocating this increase to the German share of the quota.         1991.
   The formula for such increases would be similar to the
   one used following the accession of Spain and Portugal to       6. The Commission accordingly recommends the Council
   the Community, whilst taking into account traditional              to decide that:
   trade flows and bona fide agreements the former German
   Democratic Republic has concluded with its trading                 — the Commission be authorized to open negotiations
   partners by 30 June 1990.                                              with all third countries- having bilateral textile
                                                                          agreements or arrangements with the Community
                                                                          containing quantitative restrictions so that the
                                                                          necessary adjustments can be made to take account of
4. Amendments will be necessary for 1991 for the majority                 the German unification,
   of the bilateral agreements, because the expiring date of
   these bilateral agreements is 31 December 1991, except             — the Commission conduct the negotiations in
   for two agreements (USSR and China) which expire on                    accordance with the Directives annexed hereto and in
   31 December 1992.                                                      consultation with the Article 113 Committee.
 ---pagebreak--- 2. 10. 90                               Official Journal of the European Communities                                          No C 248/3
                                                               ANNEX
                                                   NEGOTIATING DIRECTIVES
          1. Principles
             — Adjustments designed to take account of the unification of the two Germanies must conform to the textile
                 trade policy adopted by the Council in December 1977 and confirmed in February 1982 and March 1986
                 with the conclusion of textile agreements with third countries.
             — The adjustments will be applicable up to the expiry of the bilateral textile agreements, which is at the end
                 of 1991, except for the China and USSR agreements which run until the end of 1992.
          2. Countries concerned
             The exercise will involve all those countries having bilateral agreements or arrangements with the Community
             containing quantitative restrictions (see point 4 of this Annex).
          3. Substantive provisions
             A. MFA COUNTRIES
                 (a) Fixing the quantitative levels
                     Levels will be adjusted for Germany wherever the agreements or arrangements currently provide for a
                     Community level allocated among all Member States or a regional quota for Germany.
                     Those increases will be based on existing trade flows. However, they may not be lower than a level
                     calculated according to the formula which had been used following the accession of Spain and Portugal
                     to the Community, which consists of a certain percentage of the EEC basket exit threshold. In
                     accordance with this formula of calculation, the percentage of increase in this case should be 4,5
                     %.
                 (b) Community basket exit for 1991
                     Basket exit levels for 1991 should be calculated by applying the percentages fixed in the bilateral
                     agreements to total imports in 1990 (for the German Democratic Republic in 1989) into the enlarged
                     customs territory of the Community. If this reference base turns out to be lower than that used prior to
                     German unification, then, exceptionally, the latter shall be retained.
                 (c) Regional basket exit
                     In order to avoid a generalized readaptation of the burden-sharing and the regional basket exit for all
                     Member States, it is proposed to continue applying in 1991 the same formula as previously.
             B. PREFERENTIAL COUNTRIES
                 Only the provisions of paragraph A (a) above will apply. These countries will be granted more favourable
                 arrangements.
 ---pagebreak--- No C 248/4                             Official Journal of the European Communities                               2. 10. 90
           4. Countries which have agreements or arrangements with the Community with quantitative levels
              Bilateral agreements MFA-type                                 Arrangements
              Argentine                     Poland                         Morocco
              Brazil                        Romania                        Egypt
              Peru                          China                          Malta
                                            USSR                           Tunisia
                                                                           Turkey
              Hong Kong                     Yugoslavia
              Macao
              South Korea
              Malaysia
              Philippines
              Singapore
              Thailand
              Indonesia
              India
              Pakistan
              Sri Lanka
              Bulgaria
              Czechoslovakia
              Hungary
           NB: The autonomous arrangement for Taiwan will also need to be adapted according to the same formula.
               Likewise the quotas for the State-trading countries under the autonomous regime should be adapted.


               EUROPEAN COMMISSION
            Brussels, 13.5.2015
            COM(2015) 264 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2015 National Reform Programme of Lithuaniaand delivering a Council opinion on the 2015 Stability Programme of Lithuania

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the 2015 National Reform Programme of Lithuania

                  and delivering a Council opinion on the 2015 Stability Programme of Lithuania

               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 the recommendation of the European Commission
                  2
               ,

               Having regard to the resolutions of the European Parliament
                  3
               ,

               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. The strategy focuses on the key areas where action is needed to boost Europe’s potential for sustainable growth and competitiveness.

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

               (3)On 8 July 2014, the Council adopted a recommendation on Lithuania’s National Reform Programme for 2014 and delivered its opinion on Lithuania’s updated Convergence Programme for 2014.

               (4)On 28 November 2014, the Commission adopted the Annual Growth Survey
                  4
               , marking the start of the 2015 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
                  5
               , in which it did not identify Lithuania as one of the Member States for which an in-depth review would be carried out.

               (5)On 18 December 2014, the European Council endorsed the priorities for boosting investment, accelerating structural reforms and pursuing responsible growth-friendly fiscal consolidation.

               (6)On 26 February 2015, the Commission published its 2015 country report for Lithuania
                  6
               . This assessed Lithuania’s progress in addressing the country-specific recommendations adopted on 8 July 2014.

               (7)On 13 April 2015, Lithuania submitted its 2015 National Reform Programme and on 30 April 2015 its 2015 Stability Programme. To take account of their interlinkages, the two programmes have been assessed at the same time.

               (8)Lithuania is currently under the preventive arm of the Stability and Growth Pact. In its Stability Programme, Lithuania has requested the application of the pension reform clause. Lithuania estimates the budgetary costs of the pension reform at 0.1% of GDP in 2016. Subject to a confirmation by Eurostat that the pension reform fulfils the necessary conditions, and taking into account that an appropriate safety margin with respect to the deficit reference value is preserved, the Council is of the opinion that Lithuania could benefit in 2016 from the requested temporary deviation from the required adjustment path towards the medium-term objective. In its 2015 Stability Programme, the government plans to reach a headline deficit of 1.2% of GDP in 2015 and to turn it into a surplus of 0.7% of GDP by 2018. The government intends to remain at the medium-term budgetary objective – a structural deficit of 1% of GDP – throughout the programme period. According to the Stability Programme, the government debt-to-GDP ratio is expected to peak in 2015 at 42.2% and to decline to 33.7% in 2018. The macroeconomic scenario underpinning these budgetary projections is plausible. However, measures to support the planned deficit targets from 2016 onwards have not been sufficiently specified. Based on the Commission's 2015 spring forecast, there is a risk of some deviation from the required adjustment towards the medium-term objective in 2015 because of the 0.3% of GDP excess of net expenditure growth over the benchmark. For 2015-2016, both the structural balance and expenditure growth significantly deviate from the required adjustment path indicating a risk of a significant deviation in 2016. Therefore, further measures will be needed in both years. Based on its assessment of the Stability Programme and taking into account the Commission's 2015 spring forecast, the Council is of the opinion that there is a risk that Lithuania will not comply with the provisions of the Stability and Growth Pact. In addition, despite recent progress, the current fiscal framework should be further improved by strengthening its binding character and ensuring full consistency with the EU fiscal provisions. Lithuania’s tax revenue is largely dependent on indirect and labour taxation, while the revenue from environmental and wealth taxation remains very low. Lithuania continues to face challenges in the area of tax compliance, in particular in relation to VAT.

               (9)Lithuania is facing a substantial fall in the workingage population, driven by demographics, migration and poor performance of the healthcare system. The persistently low level of participation in life-long learning is not conducive to strengthening human capital, improving employability or increasing productivity. Schools have an above-average rate of low-achievers in basic skills, indicating a need to modernise teacher training and promote continuing professional development. The education and training on offer is not always relevant to the labour market. The proportion of students following vocational education and training programmes in secondary education is low. Lithuania is taking action to improve and extend apprenticeships and work-based learning, but the number and quality of such programmes is still insufficient. The number of hospital beds per capita remains high as compared with the rest of the EU, suggesting there may be imbalances in the provision of healthcare. At the same time, total public investment in the healthcare sector remains low. The reported high frequency of informal payments for healthcare services, together with concerns about corruption in public procurement procedures for medical goods, demonstrate the need to improve the governance of the healthcare system.

               (10)The pension reform measures that have been adopted are not sufficient to address the issue of the medium-term sustainability of the pension system. The statutory retirement age is being gradually increased over the period to 2026, but the pension system does not take into account indicators of life expectancy. Moreover, the rules for the indexation of pensions are unclear. Low participation in voluntary pension savings schemes and the absence of occupational pension schemes create risks for future pension adequacy. The government intends to implement a comprehensive reform of the pension system as part of a wider ‘new social model’. This strategy has not yet been finalised and adopted, however, and consultation with social partners must first be concluded. Lithuania introduced financial support measures for the elderly and financial incentives for employing older workers. A comprehensive active ageing strategy is, however, still lacking.

               (11)Over 30 % of Lithuania’s population is at risk of poverty. The reform of cash social assistance, combined with the effect of an improved economic situation, led to a considerable fall in expenditure and in the number of recipients of social assistance. Active labour market measures and other services for supporting beneficiaries are still, however, limited.

               (12)Lithuania has made substantial progress on reforming state-owned companies and has enacted legislation to ensure that the reforms have a lasting effect. The government has completed the separation of commercial and non-commercial activities, which are now disclosed in annual reports. The remaining state-owned companies are required to appoint independent board members by the end of September 2015.

               (13)In the context of the European Semester, the Commission has carried out a comprehensive analysis of Lithuania’s economic policy and published it in the 2015 country report. It has also assessed the Stability Programme and the National Reform Programme and the follow-up given to the recommendations addressed to Lithuania in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Lithuania but also their compliance with EU rules and guidance, given the need to strengthen the overall economic governance of the European Union by providing EU-level input into future national decisions. The recommendations under the European Semester are reflected in recommendations 1 to 3 below.

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

               (15)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. Lithuania should also ensure the full and timely implementation of these recommendations,

               HEREBY RECOMMENDS that Lithuania take action in 2015 and 2016 to:

               1.Avoid deviating from the medium-term objective in 2015 and ensure that the deviation in 2016 is limited to the allowance linked to the systemic pension reform. Broaden the tax base and improve tax compliance.

               2.Address the challenge of a shrinking working-age population by improving the labourmarket relevance of education, increasing attainment in basic skills, and improving the performance of the healthcare system; reduce the high tax wedge for low income earners by shifting the tax burden to other sources less detrimental to growth.

               3.Adopt a comprehensive reform of the pension system that also addresses the challenge of pension adequacy. Improve the coverage and adequacy of unemployment benefits and cash social assistance and improve the employability of those looking for work.

               Done at Brussels,

                     For the Council

                     The President

                     (1)
                  OJ L 209, 2.8.1997, p. 1.

                     (2)
                  COM(2015) 264.

                     (3)
                  P8_TA(2015)0067, P8_TA(2015)0068, P8_TA(2015)0069.

                     (4)
                  COM(2014) 902.

                     (5)
                  COM(2014) 904.

                     (6)
                  SWD(2015) 34 final.

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


Recommendation for a COUNCIL RECOMMENDATION on the 2017 National Reform Programme of the Czech Republic and delivering a Council opinion on the 2017 Convergence Programme of the Czech Republic


               EUROPEAN COMMISSION
            Brussels, 18.5.2016
            COM(2016) 344 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2016 national reform programme of Sloveniaand delivering a Council opinion on the 2016 stability programme of Slovenia

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the 2016 national reform programme of Slovenia

                  and delivering a Council opinion on the 2016 stability programme of Slovenia

               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 November 2015, the Commission adopted the Annual Growth Survey
                  5
               , marking the start of the 2016 European Semester of economic policy coordination. The priorities of the Annual Growth Survey were endorsed by the European Council on 17-18 March 2016. On 26 November 2015, on the basis of Regulation (EU) No 1176/2011, the Commission adopted the Alert Mechanism Report
                  6
               , in which it identified Slovenia as one of the Member States for which an in-depth review would be carried out. On the same day, the Commission also adopted a recommendation for a Council recommendation on the economic policy of the euro area
                  7
               . That recommendation was endorsed by the European Council on 18-19 February 2016 and adopted by the Council on 8 March 2016. As a country whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Slovenia should ensure the full and timely implementation of the recommendation.

               (2)The 2016 country report for Slovenia
                  8
                was published on 26 February 2016. It assessed Slovenia’s progress in addressing the country-specific recommendations adopted by the Council on 14 July 2015 and Slovenia's progress towards its national Europe 2020 targets. It also included the in-depth review under Article 5 of Regulation (EU) No 1176/2011. On 8 March 2016, the Commission presented the results of the in-depth review.
                  9
                The Commission’s analysis leads it to conclude that Slovenia is experiencing macroeconomic imbalances. Weaknesses in the banking sector, corporate indebtedness, the lack of investment and long-term fiscal sustainability risks constitute vulnerabilities that will need to be addressed. Confidence has returned into the Slovenian banking sector. However, credit growth remains negative and the level of non-performing loans remains relatively high. It is essential that Slovenia tackles risks to fiscal sustainability stemming from increasing pressures on its health care and pension systems and reduces the increased public debt. Further reduction of obstacles to investment is required, particularly in the area of public administration. There is a need to strengthen the involvement of social partners in policy design and implementation of structural reforms in particular on pensions, health, long-term care and labour market policies.

               (3)On 15 April 2016, Slovenia submitted its 2016 national reform programme and its 2016 stability programme. To take account of their interlinkages, the two programmes have been assessed at the same time.

               (4)Relevant country-specific recommendations have been addressed in the programming of the European Structural and Investment Funds for the 2014-2020 period. As foreseen in Article 23 of Regulation (EU) No 1303/2013, 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 this provision in guidelines on the application of the measures linking effectiveness of the European Structural and Investment Funds to sound economic governance
                  10
               .

               (5)The 2016 stability programme of Slovenia indicates that the budgetary impact of the exceptional inflow of refugees is significant and provides adequate evidence of the scope and nature of these additional budgetary costs. According to the Commission, the eligible additional expenditure amounted to 0.06% of GDP in 2015 and is currently estimated at 0.07% of GDP in 2016. The provisions defined in Article 5(1) and Article 6(3) of Regulation (EC) No 1466/97 allow catering for this additional expenditure, in that the inflow of refugees is an exceptional event, its impact on Slovenia`s public finances is significant and sustainability would not be compromised by allowing for a temporary deviation from the adjustment path towards the medium-term budgetary objective. Whereas this provision is not applicable for 2015 as Slovenia was under excessive deficit procedure, a final assessment regarding 2016, including on the eligible amounts, will be made in spring 2017 on the basis of observed data as provided by Slovenian authorities.

               (6)[Following the abrogation of the excessive deficit procedure, Slovenia is in the preventive arm of the Stability and Growth Pact and subject to the transitional debt rule.] In its 2016 stability programme, the government plans a gradual improvement of the headline balance from 2.2% in 2016 to 0.4% of GDP in 2019. The medium-term budgetary objective - a balance budget in structural terms, which does not respect the requirements of the Stability and Growth Pact - is planned to be achieved in 2020, beyond the programme's horizon. However, the recalculated structural balance points to a structural deficit of 1.2% of GDP in 2019. According to the stability programme, the government debt-to-GDP ratio is expected to fall to 80.2% of GDP in 2016 and continue to fall to 73.8% of GDP in 2019. The macroeconomic scenario underpinning these budgetary projections is plausible. However, the measures needed to support the planned deficit targets from 2017 onwards have not been sufficiently specified. According to the Commission 2016 spring forecast, Slovenia's output gap in 2017 is estimated at 1.8% of GDP, while potential growth is projected at 1.1% and real GDP growth at 2.3% of GDP. On this basis, Slovenia is assessed to be in "good times" in 2017, requiring a structural adjustment of 1% of GDP. However, there is significant uncertainty regarding the calculation of potential growth and the output gap in the specific case of Slovenia because of the specific situation of the labour market, the particularly large economic contraction in 2008-2013 and the structural reforms being implemented. Alternative output gap estimations covering a longer time horizon, reflecting the ongoing review of the estimation method, suggest a smoother output gap profile for Slovenia, implying that it would be premature to conclude that the Slovenian economy is in good times in 2017. Therefore, requiring a structural effort in 2017 in line with normal times conditions appears more appropriate at the current juncture. There appears to be a risk of some deviation from the recommended adjustment towards the medium term objective in 2016 and, under unchanged policies, a risk of a significant deviation in 2017. The conclusion for 2016 would not change in case the budgetary impact of the exceptional inflow of refugees was excluded from the assessment. Slovenia is forecast to comply with the transitional debt rule in 2016 and to broadly comply with it in 2017. Based on its assessment of the stability programme and taking into account the Commission 2016 spring forecast, the Council is of the opinion that there is a risk that Slovenia will not comply with the provisions of the Stability and Growth Pact. Therefore, further measures will be needed to ensure compliance in 2016 and 2017.

               (7)In July 2015, the Parliament adopted the Fiscal Rules Act. However, an independent Fiscal Council to oversee the implementation of the rules has yet to be appointed. Furthermore, revisions to the Public Finance Act required to fully operationalise the Fiscal Rules Act and aimed at putting a multi-annual approach to budgeting on a statutory footing remain outstanding.

               (8)The high level of public debt at well above 60 % of GDP makes Slovenia vulnerable to nominal growth and interest rate shocks. At the same time, Slovenia's population is ageing faster than that of most Member States. Slovenia faces high risks regarding the long-term sustainability of public finances, given that it has the highest long-term sustainability gap indicator of all Member States, stemming from the projected increase in pension related public spending, healthcare and long-term care expenditure. Projected public spending on pensions is the highest among all Member States and is estimated to increase from 11.8 % in 2013 to 15.3% of GDP in 2060. The old age dependency ratio is projected to more than double between 2013 and 2060, putting significant pressure on the pension systems. Projected implicit liabilities related to the cost of ageing reflect the long-term challenges in terms of an ageing population. In addition, adequacy problems for workers with less than full working careers can be expected in the future, with an increasing number of people with incomplete or short working careers, also due to their late entry into the labour market, working in intermittent jobs and with a low contribution density. A White Paper on pensions was published in April 2016 and will serve as the basis for a wide public consultation. The results of the consultation will be fed into a new pension reform that should be adopted within the current legislative term, swiftly starting by agreement with social partners on key elements of the reform, namely the retirement age, level of pensions, indexation and optimisation of the second pillar.

               (9)Public expenditure on long-term care is projected to more than double by 2060 due to population ageing. This poses a significant fiscal sustainability challenge for Slovenia. The proportion of the population aged 80 years and older is projected to rise three-fold, from 4.6 % in 2013 to 12.4 % in 2060. Between 2003 and 2013, overall expenditure on long-term care increased by 85 % with private expenditure growing at a higher pace than public expenditure. There is no integrated long-term care system in Slovenia. Slovenia focusses its spending on formal in-kind benefits, the majority of which is spent on institutional care rather than home care, although both figures are below the EU average. There is significant scope for increasing the cost-effectiveness of the healthcare system by strengthening the measures for improving primary care as a gate keeper, shifting from in-patient to outpatient care, improving the efficiency and governance of hospitals, improving contracting and payment processes for health services, developing better cost information for the adjustment of the imported diagnosis-related groups, and further development of a quality monitoring framework. The proportion of joint procurement is low and there is a strong focus on the ‘lowest price’ award criterion. A comprehensive review of the health care system has been completed and the National Healthcare Resolution Plan 2016-2025 was adopted by the government at the end of 2015 and by the parliament in March 2016. The resolution represents a strategic plan for reform but while proposals for effective binding implementing measures are in preparation, they have yet to be presented. It also remains unclear whether the reform will address key issues such as in-built automatic stabiliser schemes, which would cushion revenue fluctuations over the business cycle or the access and quality of service provision. The adoption of the Long-term Care Act and Healthcare and Health Insurance Act has been repeatedly delayed and the current roadmap for their adoption appears to be optimistic for the second half of 2016.

               (10)Labour market performance is gradually improving and social conditions have stabilised. Job creation has picked up considerably and unemployment is decreasing. However, participation rates of older and low-skilled workers remain a challenge. Long-term unemployment still represents more than half of all unemployed with a significant share of the long-term unemployed being low-skilled or older than 50 years of age. The Guidelines for Active Labour Market Policy Measures 2016-2020 represent a continuation of the approach implemented so far, while the expenditure for that policy area remains low. Temporary exemptions from employers' social contributions for newly employed workers older than 55 were adopted in November 2015. Further measures to prolong working lives, including adapting the working environment, which are relevant also for the sustainability of the pension system, are expected to be presented in 2016. Wage growth stayed in line with productivity gains and continued to support external competitiveness. In November 2015, the parliament passed a bill proposed by the trade unions that redefined the minimum wage to exclude some bonuses. As a result, employer organisations withdrew from the social agreement, weakening the social dialogue considerably.

               (11)Progress has been made on the work-out of non-performing loans, although they remain at high levels compared with the pre-crisis period. Slovenia has implemented several policy measures to improve the sustainability of the banking sector. These include strengthening the banks’ work-out capacity and introducing action setting specific targets for the reduction of non-performing loans. Slovenia has also introduced several measures to manage credit risk. Positive results are expected by mid-2016. Nevertheless, the policy priorities in the short term remain the further resolution of non-performing loans and the management of credit risk. Operational and financial restructuring of major corporates has been completed and master restructuring agreements are continuously monitored. The Bank Asset Management Company (BAMC) is fully operational and its 2017-22 strategy has been set out. While progress has been made by the BAMC in the work-out of its loan book, it remains a significant risk to the sustainability of public finances. In 2015, its activities contributed 1% of GDP to the general government deficit of 2.9%. Oversight of the activities of the BAMC appears to be insufficient as the authorities had considerably underestimated the deficit of the BAMC in 2015 by 0.7% of GDP and appeared unaware of the level of write-offs performed by the BAMC. Additional restructuring tools are also available. On the back of substantial progress in restructuring of major corporates, Slovenia has started the restructuring of several SMEs. Guidelines for the restructuring of SMEs are currently being implemented by the banks. Progress has been made on access to finance for SMEs and micro companies. Nevertheless, there is limited access to alternative sources of financing such as venture capital. Small businesses are still overly dependent on bank lending despite the increasing availability of debt and equity instruments in the market. Therefore, that segment is very vulnerable to credit market developments.

               (12)Investment growth has been muted in recent years, which limited Slovenia's economic output and future growth prospects. Private investment declined sharply during the economic crisis and since then its share in GDP has been decreasing. With public investment strongly dependent on the dynamics of EU funds, more productive investment is needed to stimulate and sustain economic growth. Foreign direct investment in Slovenia has grown markedly in the last two years, mainly due to increased privatisation efforts. However, Slovenia’s business environment remains hindered by ongoing deleveraging and a high level of administrative burden, particularly in the areas of construction, spatial planning and tax compliance, but also due to restrictive regulation on access to and exercise of regulated professions, which impedes the inflow of investment. Making it easier to do business in Slovenia depends on increased business trust and further elimination of inefficiencies in public administration and red tape stemming from a high number of laws and by-laws and frequent changes to legislation. Around half of the administrative burden reduction measures set out in the government's single document have been implemented, but some pertinent measures, especially on building permits and spatial planning, have been delayed.

               (13)The 2015-2020 strategy for the development of public administration, adopted as part of Slovenia's compliance with the pre-conditions for accessing European Structural and Investment Funds for 2014-2020, stretches across various portfolios, making cross-ministerial coordination essential if it is to be implemented properly and in good time. In February 2016, the government adopted the second interim report on the implementation of the 'Zero tolerance of corruption' programme. There has been some progress in the implementation of that programme. However, certain measures of the programme (joint public procurement for health, examination of crime in banking sector and adoption of the Act for integrity and prevention of corruption) have been delayed. The envisaged amendment of the Act for integrity and prevention of corruption will provide an opportunity to improve the functioning of the Commission for Prevention of Corruption, by addressing credibility issues and the efficiency of its work. In the justice system, the length of trials has been shortened further and the number of pending cases has been reduced from very high levels, partly helped by a smaller number of incoming cases. The decrease is also, to a certain extent, determined by changes in the procedural and statistical treatment of enforcement cases. The Supreme Court continues to update business processes in courts and to reform case management systems. Despite an improved insolvency framework, offering businesses increased opportunities for reorganisation, liquidation proceedings remain lengthy and ineffective.

               (14)State involvement in the economy remains high. The state is the largest employer, asset manager and corporate debt holder in Slovenia. In response to the recommendations issued to Slovenia between 2012 and 2015 on that issue, the country produced a new framework for the Slovenian Sovereign Holding. It includes a strategy on the management of state ownership, a set of asset performance criteria and a management plan for 2016. This system complements the new corporate governance code for state-owned enterprises adopted at the end of 2014. The strategy confirms the extent of state’s current involvement in the economy and shifts the focus towards an improved performance of the state-owned enterprises. Therefore, implementation of the overhauled framework by the Slovenian Sovereign Holding is all the more important to ensure the separation of the government's ownership and regulatory functions and the professional management of state-owned enterprises. This, together with further privatisation of selected assets, should reduce contingent liabilities to the budget from this area. The privatisation of NLB is to be launched in 2016 in line with the Slovenian Sovereign Holding management plan.

               (15)In the context of the European Semester, the Commission has carried out a comprehensive analysis of Slovenia’s economic policy and published it in the 2016 country report. It has also assessed the stability programme and the national reform programme and the follow-up given to the recommendations addressed to Slovenia in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Slovenia but also their compliance with EU rules and guidance, given the need to strengthen the EU's overall economic governance by providing EU-level input into future national decisions. The recommendations under the European Semester are reflected in recommendations 1 to 4 below.

               (16)In the light of this assessment, the Council has examined the stability programme, and its opinion
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                is reflected in particular in recommendation 1 below.

               (17)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, 3 and 4 below.

               HEREBY RECOMMENDS that Slovenia take action in 2016 and 2017 to:

               1.Following the correction of the excessive deficit, achieve an annual fiscal adjustment of 0.6% of GDP towards the medium-term budgetary objective in 2016 and in 2017. Set a medium-term budgetary objective that respects the requirements of the Stability and Growth Pact. Strengthen the fiscal framework by appointing an independent fiscal council and amending the Public Finance Act. Complete and implement the reform of the long-term care and healthcare systems, making them more cost-efficient to ensure long-term sustainability of accessible and quality care. By the end of 2017, adopt the reform of the pension system.

               2.In consultation with social partners, increase the employability of low-skilled and older workers, including through targeted lifelong learning and activation measures.

               3.Improve the financing conditions for creditworthy business, including by facilitating durable resolution of non-performing loans and access to alternative financing sources. Ensure the proper implementation of the bank asset management company strategy.

               4.Take measures to modernise public administration and reduce the administrative burden on business. Improve the governance and the performance of state-owned enterprises.

               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(2016) 344 final.

                     (4)
                  P8_TA(2016)0058, P8_TA(2016)0059, and P8_TA(2016)0060.

                     (5)
                  COM(2015) 690 final.

                     (6)
                  COM(2015) 691 final.

                     (7)
                  COM(2015) 692 final.

                     (8)
                  SWD(2016) 92 final.

                     (9)
                  COM(2016) 95 final.

                     (10)
                  COM(2014) 494 final.

                     (11)
                  Under Article 5(2) of Council Regulation (EC) No 1466/97.