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		52013PC0386

			Recommendation for a COUNCIL DECISION abrogating Decision 2009/591/EC on the existence of an excessive deficit in Latvia /* COM/2013/0386 final */

			   	Recommendation for a
COUNCIL DECISION
abrogating Decision 2009/591/EC on the
existence of an excessive deficit in Latvia
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union,
and in particular Article 126(12) thereof,
Having regard to the recommendation from
the Commission,
Whereas:
(1)       By Council Decision 2009/591/EC
of 7 July 2009[1],
following a recommendation from the Commission in accordance with Article 104(6)
of the Treaty, it was decided that an excessive deficit existed in Latvia. The
Council noted that the general government deficit reached 4.0% of GDP in 2008,
above the 3% of GDP Treaty reference value, while the general government gross
debt stood at 19.5% of GDP in 2008, well below the 60% of GDP Treaty reference
value[2].

(2)       On 7 July 2009, in
accordance with Article 104(7) of the Treaty and Article 3(4) of Council Regulation
(EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation
of the excessive deficit procedure[3],
the Council, based on a recommendation from the Commission, addressed a
recommendation to Latvia with a view to bringing the excessive deficit
situation to an end by 2012 at the latest. The recommendation was made public.
(3)       In accordance with Article
4 of the Protocol on the excessive deficit procedure annexed to the Treaties,
the Commission provides the data for the implementation of the procedure. As
part of the application of this Protocol, Member States are to notify data on
government deficits and debt and other associated variables twice a year,
namely before 1 April and before 1 October, in accordance with Article 3 of
Council Regulation (EC) No 479/2009 of 25 May 2009 on the application of the
Protocol on the excessive deficit procedure annexed to the Treaty establishing
the European Community[4].

(4)       When considering whether a
decision on the existence of an excessive deficit should be abrogated, the
Council should take a decision on the basis of notified data. Moreover, a
decision on the existence of an excessive deficit should be abrogated only if
the Commission forecasts indicate that the deficit will not exceed the 3% of
GDP threshold over the forecast horizon[5].
(5)       Based on data provided by
the Commission (Eurostat) in accordance with Article 14 of Regulation (EC) No 479/2009
following the notification by Latvia before 1 April 2013 and on the
Commission services’ 2013 spring forecast, the following conclusions are
warranted:
–
Following high general government deficits in
2009 and 2010 (respectively at 9.8% and 8.1% of GDP), which partly reflected
measures to stabilise the financial sector, the deficit started rapidly
declining in 2011, when it reached 3.6% of GDP. This improvement reflected
sizeable and broad-based fiscal consolidation implemented over the period of
2009-2011 in the context of the economic adjustment programme supported by the
balance-of-payments assistance, as well as improving cyclical conditions; the
adjustment programme was successfully completed in January 2012. In 2012, the
general government deficit declined further to 1.2% of GDP, thus overachieving
the deficit target of 2.1% of GDP set in the 2012 convergence programme and
well below the 3% of GDP Treaty reference value. On the revenue side this
reflected favourable cyclical conditions and improving tax efficiency, while
expenditure growth remained substantially below the nominal GDP growth. As a
result, the share of government revenue in GDP increased by ¼ percentage points,
while the share of government expenditure declined by 2 percentage points in
2012.
–
The 2013 convergence programme envisages that the
headline deficit will be 1.1% of GDP in 2013, stabilising thereafter at the
level of 0.9% of GDP until 2016. The Commission services' 2013 spring forecast
projects that the general government deficit will remain broadly unchanged in
2013 at 1.2% of GDP and will decrease to 0.9% of GDP in 2014, thus staying well
below the reference value of 3% of GDP.
–
The general government debt
stood at 40.7% of GDP in 2012. The Commission services' 2013 spring forecast
projects the general government gross debt to increase to
43.2% of GDP in 2013, as the government accumulates assets for large debt
repayments scheduled for 2014-2015. The debt is expected to decline again to
around 40% of GDP in 2014, as these repayments take effect.
(6)       The Council recalls that,
starting from 2013, which is the year following the correction of the excessive
deficit, Latvia should ensure compliance with the requirements of the
preventive arm of the Stability and Growth Pact, including respecting the
expenditure benchmark.
(7)       In accordance with Article
126(12) of the Treaty, a Council Decision on the existence of an excessive
deficit is to be abrogated when the excessive deficit in the Member State
concerned has, in the view of the Council, been corrected.
(8)       In the view of the
Council, the excessive deficit in Latvia has been corrected and Decision 2009/591/EC
should therefore be abrogated,
HAS ADOPTED THIS DECISION:
Article 1
From an overall assessment it follows that the
excessive deficit situation in Latvia has been corrected.
Article 2
Decision 2009/591/EU is hereby abrogated.
Article 3
This Decision is addressed to the Republic
of Latvia.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 202, 4.8.2009, p. 50.
[2]               The general government deficit and debt for 2008 were
subsequently revised to currently 4.2% of GDP and 19.8% of GDP respectively.
[3]               OJ L 209, 2.8.1997, p. 6.
[4]               OJ L 145, 10.6.2009, p. 1.
[5]               In line with the “Specifications on the implementation
of the Stability and Growth Pact and Guidelines on the format and content of
Stability and Convergence Programmes”, of 3 September 2012. See:
http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/coc/code_of_conduct_en.pdf


title: Recommendation of the European Central Bank of 4 April 2017 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2017/10)

text:
                  13.4.2017

                  EN

                  Official Journal of the European Union

                  C 120/2

            RECOMMENDATION OF THE EUROPEAN CENTRAL BANK
      of 4 April 2017
      on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions
      (ECB/2017/10)
      (2017/C 120/02)
      THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
      Having regard to the Treaty on the Functioning of the European Union,
      Having regard to Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (1), and in particular Article 4(3) and Article 6(1) and (5)(c) thereof,
      Whereas:

                  (1)

                  The European Central Bank (ECB) is responsible for the effective and consistent functioning of the Single Supervisory Mechanism (SSM). It oversees the functioning of the system to ensure the consistent application of high supervisory standards and the consistency of supervisory outcomes across the participating Member States.

                  (2)

                  The ECB has to ensure the consistent application of prudential requirements for credit institutions within the participating Member States under Regulation (EU) No 1024/2013 and Regulation (EU) No 468/2014 of the European Central Bank (ECB/2014/17) (2).

                  (3)

                  As the competent authority to do so pursuant to Regulation (EU) No 1024/2013, in relation to credit institutions that are classified as significant, the ECB has exercised a number of options and discretions, which are set out in Regulation (EU) 2016/445 of the European Central Bank (ECB/2016/4) (3). In addition, in its guide of November 2016 on options and discretions available in Union law (hereinafter the ‘ECB Guide’), the ECB sets out a common set of specifications for the exercise on a case-by-case basis of certain other options following individual assessment of applications by credit institutions that are classified as significant under Article 6(4) of Regulation (EU) No 1024/2013 as well as under Part IV and Article 147(1) of Regulation (EU) No 468/2014.

                  (4)

                  In order to foster a common supervisory approach by national competent authorities (NCAs) when assessing individual exercise of options and discretions, the ECB may adopt, pursuant to Article 4(3) of Regulation (EU) No 1024/2013, a recommendation on the specifications to be applied in the assessment of applications from less significant institutions.

                  (5)

                  A common set of specifications for the individual exercise of options and discretions is necessary, on the one hand, in order to promote consistency, effectiveness and transparency in the supervision of less significant institutions within the SSM and, on the other hand, to foster, where needed, equal treatment of significant and less significant institutions as well as a level playing field for all credit institutions across the participating Member States. At the same time, the principle of proportionality and the legitimate expectations of supervised credit institutions must be taken into account.

                  (6)

                  To this end, the ECB has identified some options and discretions among those included in the ECB Guide which would be appropriate to exercise in an identical manner in relation to significant institutions and less significant institutions. The ECB has further identified other options and discretions, among which are two options and discretions of a general nature provided for in Article 380 and Article 420(2) of Regulation (EU) No 575/2013, for whose exercise it recommends a specific approach in relation to less significant institutions.

                  (7)

                  With respect to the options and discretions related to consolidated supervision and waivers of prudential requirements, in line with the recommendations contained in Chapter 1 of Section II of the ECB Guide, NCAs should be encouraged to adopt a prudent approach when granting such waivers on an individual basis. With regard to liquidity waivers at the cross border level, the ECB recommends a specific approach for less significant institutions given that not all the specifications for the assessment of applications included in the ECB Guide are relevant for these institutions.

                  (8)

                  There should be a consistent and prudent approach across the SSM regarding the options and discretions related to own funds and capital requirements, as set out in Chapters 2 and 3 of Section II of the ECB Guide, given that these supervisory decisions have an impact on the amount of available own funds and their quality. The same applies for Additional Tier 1 and Tier 2 instruments or minority interests that may be included in eligible own funds under certain conditions. Furthermore, to ensure a level playing field, the standardised approach, the internal ratings based approach, internal model method and internal model approach for the calculation of own funds requirements should be applied consistently to all credit institutions across the SSM. To this end also, the assessment of compliance with the requirements laid down in Regulation (EU) No 575/2013 of the European Parliament and of the Council (4) to allow the application of a zero per cent risk weight for the calculation of own fund requirements for intra-group exposures should be based on a common set of specifications. However, the ECB has identified some options and discretions related to own funds and capital requirements for which a specific approach in relation to less significant institutions is necessary.

                  (9)

                  For the options and discretions concerning institutions that have entered into an institutional protection scheme, the use of a common set of specifications for the assessment of applications for prudential waivers, as set out in Chapter 4 of Section II of the ECB Guide, is recommended in order to attain supervisory consistency, given that institutional protection schemes typically comprise both significant and less significant institutions. However, with regard to holdings in institutions that fall within institutional protection schemes under Article 49(3) of Regulation (EU) No 575/2013, a specific approach in relation to less significant institutions is recommended to reduce the administrative burden on these institutions as much as possible.

                  (10)

                  With regard to compliance with the large exposures requirements, the approach set out in Chapter 5 of Section II of the ECB Guide in relation to significant institutions should be taken also in relation to less significant institutions to foster a prudent treatment of large exposures for all credit institutions within the SSM so that concentration risks are adequately managed and limited.

                  (11)

                  The ECB recommends a consistent and prudent approach with respect to the options and discretions related to liquidity requirements, as set out in Chapter 6 of Section II of the ECB Guide, as these options and discretions have an impact on the calculation of liquidity coverage ratio requirements, for example by specifying the treatment of specific inflows and outflows. Regarding the outflow rates for trade finance off-balance sheet related products NCAs may apply an outflow rate below 5 % if the applicable outflow rate has been calibrated based on statistical evidence.

                  (12)

                  As regards the exercise of the waiver for credit institutions permanently affiliated to a central body specified in Article 21(1) of Directive 2013/36/EU of the European Parliament and of the Council (5), the approach set out in Chapter 8 of Section II of the ECB Guide is recommended in relation to less significant institutions to attain a level playing field.

                  (13)

                  With respect to the options and discretions related to governance arrangements and prudential supervision, a prudent and consistent approach, as set out in Chapter 11 of Section II of the ECB Guide, is recommended to promote that all credit institutions are subject to appropriate governance requirements. However, a specific approach in relation to less significant institutions with regard to the combination of risk committee and audit committee is considered appropriate in view of the principle of proportionality.

                  (14)

                  Furthermore, this Recommendation covers options and discretions relating to the cooperation between authorities, as smooth cooperation within the SSM needs to be ensured.

                  (15)

                  As regards bilateral agreements on the supervision of credit institutions in non-participating Member States pursuant to Article 115(2) of Directive 2013/36/EU, a specific approach is needed in relation to less significant institutions as this option is available for the competent authority that is responsible for the authorisations. According to Article 4(1)(a) and Article 9 of Regulation (EU) No 1024/2013, the ECB is exclusively competent within the SSM to authorise credit institutions and to withdraw authorisations of credit institutions, and therefore needs to be involved to establish bilateral agreements on the supervision of credit institutions in non-participating Member States,

            HAS ADOPTED THIS RECOMMENDATION:
      PART ONE

         GENERAL PROVISIONS

         I.

      1.   Subject matter and scope

      This Recommendation lays down principles for the exercise by NCAs of some options and discretions available in Union law in relation to less significant institutions.
      2.   Definitions

      For the purposes of this Recommendation, the definitions set out in Regulation (EU) No 1024/2013, Regulation (EU) No 468/2014 (ECB/2014/17), Regulation (EU) No 575/2013, Directive 2013/36/EU, and Commission Delegated Regulation (EU) 2015/61 (6) apply.
      PART TWO

         OPTIONS AND DISCRETIONS FOR WHICH A SPECIFIC APPROACH FOR LESS SIGNIFICANT INSTITUTIONS IS RECOMMENDED

         II.

         Waivers of prudential requirements

      1.   Article 8(3) of Regulation (EU) No 575/2013: liquidity waivers at cross border level

      When examining applications for liquidity waivers at the cross border level, NCAs should assess compliance with all of the conditions set out in Article 8(1) and (3) of Regulation (EU) No 575/2013, applying the assessment specifications laid down in Section II, Chapter 1, paragraph 4 of the ECB Guide with the exception of the specifications for letter (b) of Article 8(3).

         III.

         Capital requirements

      1.   Article 129(1) of Regulation (EU) No 575/2013: exposures in the form of covered bonds

      With regard to exposures in the form of covered bonds, an NCA should coordinate with the ECB regarding the assessment of significant potential concentration problems in the participating Member State concerned, before deciding whether to partly waive the application of Article 129(1)(c) of Regulation (EU) No 575/2013 and allow credit quality step 2 for up to 10 % of the total exposure of the nominal amount of outstanding covered bonds of the issuing institution.
      2.   Article 311(2) of Regulation (EU) No 575/2013: treatment of exposures to central counterparties

                  2.1

                  An NCA should allow a credit institution to apply the treatment set out in Article 310 of Regulation (EU) No 575/2013 to its trade exposures and default fund contributions to a central counterparty where that central counterparty has notified the credit institution that it has stopped calculating KCCP (hypothetical capital) as provided for in Article 311(1)(a) of Regulation (EU) No 575/2013.

                  2.2

                  For the purposes of paragraph 2.1, when assessing the validity of the reasons for which the central counterparty has stopped calculating KCCP (hypothetical capital), NCAs should apply the conclusions reached by the ECB with respect to the same central counterparty in its verification of the reasons.

            3.   Article 380 of Regulation (EU) No 575/2013: waiver in case of system failure

                  3.1

                  Where a system wide failure within the meaning of Article 380 of Regulation (EU) No 575/2013 occurs, as confirmed by an ECB public statement, and until the ECB issues a public statement that the situation referred to therein is rectified, the ECB should assess this failure and NCAs should apply the conclusions of the ECB's assessment and make use of the option provided for in Article 380 of Regulation (EU) No 575/2013. In such case:

                              (a)

                              credit institutions should not be required to comply with the own funds requirements laid down in Articles 378 and 379 of Regulation (EU) No 575/2013; and

                              (b)

                              the failure of a counterparty to settle a trade should not be deemed a default for the purposes of credit risk.

                  3.2

                  If an NCA plans to issue a public statement confirming the event of a system wide failure within the meaning of Article 380 of Regulation (EU) No 575/2013, it should coordinate this with the ECB before publishing such statement.

         IV.

         Institutional protection schemes

      1.   Article 49(3) of Regulation (EU) No 575/2013: deduction of holdings in institutions that fall within institutional protection schemes

                  1.1

                  Where applications are made for permission not to deduct holdings of own funds instruments, NCAs should use the specifications laid down in Section II, Chapter 4, paragraph 4 of the ECB Guide to assess whether the conditions set out in Article 49(3) of Regulation (EU) No 575/2013 are met.

                  1.2

                  An NCA may allow an institutional protection scheme to submit an application for permission under Article 49(3) of Regulation (EU) No 575/2013 on behalf of all less significant institutions that are members of the scheme. In this case, the NCA may issue a decision granting the permission in accordance with Article 49(3) of Regulation (EU) No 575/2013 which applies to all the less significant institutions listed in the application.

         V.

         Liquidity

      1.   Article 420(2) of Regulation (EU) No 575/2013: liquidity outflows

                  1.1

                  Consistently with Article 11 of Regulation (EU) 2016/445, NCAs should determine a liquidity outflow rate of 5 % for trade finance off-balance sheet items, as referred to in Article 429 of Regulation (EU) No 575/2013 and in Annex I thereto, to be used by credit institutions in assessing liquidity outflows. An NCA should require credit institutions to report to it the corresponding outflows in accordance with Commission Implementing Regulation (EU) No 680/2014 (7).

                  1.2

                  By derogation from paragraph 1.1, an NCA may determine an outflow rate below 5 % on the basis of statistical evidence for less significant institutions established in the Member State concerned.

         VI.

         Prudential supervision

      1.   Article 76(3) of Directive 2013/36/EU: combining the risk committee and the audit committee

                  1.1

                  With regard to less significant institutions (including credit institutions that are group subsidiaries) that are not considered significant within the meaning of Article 76(3) of Directive 2013/36/EU, NCAs should exercise the option to allow the combination of the risk and audit committees.

                  1.2

                  NCAs should carry out the assessment of significance within the meaning of Article 76(3) of Directive 2013/36/EU, in terms of the size, internal organisation and the nature, scope and complexity of the credit institution's activities, in accordance with the assessment specifications laid down in Section II, Chapter 11, paragraph 3 of the ECB Guide.

                  1.3

                  If national law transposing Directive 2013/36/EU already provides for criteria other than the specifications set out in Section II, Chapter 11, paragraph 3 of the ECB Guide, NCAs should apply the criteria laid down in national law.

            2.   Article 115(2) of Directive 2013/36/EU: bilateral agreement on the supervision of credit institutions in non-participating Member States

                  2.1

                  Given the ECB's competence for the initial authorisation of credit institutions within the SSM and the NCAs' competence for the prudential supervision of less significant institutions, NCAs should notify the ECB of their intention to delegate their responsibility for the direct supervision of less significant institutions to the competent authority which authorised and supervises the parent undertaking of the less significant institution, or to assume responsibility for supervising the subsidiary credit institution authorised in another Member State. The ECB as competent authority responsible for authorising credit institutions will cooperate, together with the relevant NCA, in the establishment of a bilateral agreement for the delegation or assumption of supervisory responsibilities on behalf of the NCA responsible for the ongoing supervision of the parent or subsidiary within the participating Member States.

                  2.2

                  Paragraph 2.1 applies in the following situations:

                              (a)

                              an NCA is considering delegating its responsibility for direct supervision of a less significant institution to the NCA that authorised and supervises the parent undertaking; and

                              (b)

                              an NCA seeks or has been solicited, in its capacity as direct supervisor of a parent undertaking that is a credit institution, to assume responsibility for the supervision of a subsidiary credit institution authorised in another Member State.

            PART THREE

         OPTIONS AND DISCRETIONS EXERCISED ON A CASE-BY-CASE BASIS FOR WHICH A COMMON APPROACH SHOULD BE TAKEN IN RELATION TO ALL CREDIT INSTITUTIONS

         VII.

      The options and discretions to be exercised on a case-by-case basis for which a common approach should be taken in relation to significant and less significant institutions are set out in the Annex. NCAs should exercise these options and discretions in relation to less significant institutions in accordance with the reference table set out in the Annex.
      PART FOUR

         FINAL PROVISION

         VIII.

         Final provision

      This Recommendation is addressed to the NCAs of participating Member States.

         Done at Frankfurt am Main, 4 April 2017.

               The President of the ECB

            Mario DRAGHI

         (1)  OJ L 287, 29.10.2013, p. 63.

         (2)  Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 14.5.2014, p. 1).

         (3)  Regulation (EU) 2016/445 of the European Central Bank of 14 March 2016 on the exercise of options and discretions available in Union law (ECB/2016/4) (OJ L 78, 24.3.2016, p. 60).

         (4)  Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).

         (5)  Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).

         (6)  Commission Delegated Regulation (EU) 2015/61 of 10 October 2014 to supplement Regulation (EU) No 575/2013 of the European Parliament and the Council with regard to liquidity coverage requirement for credit institutions (OJ L 11, 17.1.2015, p. 1).

         (7)  Commission Implementing Regulation (EU) No 680/2014 of 16 April 2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council (OJ L 191, 28.6.2014, p. 1).

         ANNEX

                     Legal basis of the option and/or discretion

                     Approach recommended: consistency with the policy on options and discretions for significant institutions

                           Consolidated supervision and waivers of prudential requirements

                     Article 7(1), (2) and (3) of Regulation (EU) No 575/2013: capital waivers

                     Section II, Chapter 1 paragraph 3 of the ECB Guide

                     Article 8(1) and (2) of Regulation (EU) No 575/2013: liquidity waivers

                     Section II, Chapter 1 paragraph 4 of the ECB Guide

                     Article 9 of Regulation (EU) No 575/2013: individual consolidation method

                     Section II, Chapter 1 paragraph 5 of the ECB Guide

                     Article 10(1) and (2) of Regulation (EU) No 575/2013: waivers for credit institutions permanently affiliated to a central body

                     Section II, Chapter 1 paragraph 6 of the ECB Guide

                     Article 24(2) of Regulation (EU) No 575/2013: valuation of assets and off-balance sheet items – use of International Financial Reporting Standards for prudential purposes

                     Section II, Chapter 1 paragraph 8 of the ECB Guide

                           Own funds

                     Article 49(1) of Regulation (EU) No 575/2013: deduction of insurance holdings

                     Section II, Chapter 2 paragraph 4 of the ECB Guide

                     Article 49(2) of Regulation (EU) No 575/2013: deduction of holdings of financial sector entities

                     Section II, Chapter 2 paragraph 5 of the ECB Guide

                     Article 78(1)(b) of Regulation (EU) No 575/2013: reduction of own funds – excess capital margin requirement

                     Section II, Chapter 2 paragraph 6 of the ECB Guide

                     Article 78(3) of Regulation (EU) No 575/2013: reduction of own funds – mutuals, savings and cooperatives

                     Section II, Chapter 2 paragraph 7 of the ECB Guide

                     Article 83(1) of Regulation (EU) No 575/2013: waiver for additional Tier 1 and Tier 2 Instruments issued by a special purpose entity

                     Section II, Chapter 2 paragraph 9 of the ECB Guide

                     Article 84(5) of Regulation (EU) No 575/2013: minority interests included in consolidated Common Equity Tier 1 capital

                     Section II, Chapter 2 paragraph 10 of the ECB Guide

                           Capital requirements

                     Article 113(6) of Regulation (EU) No 575/2013: calculation of risk weighted exposure amounts – intragroup exposures

                     Section II, Chapter 3 paragraph 3 of the ECB Guide

                     Article 162(1) of Regulation (EU) No 575/2013: maturity of exposures

                     Section II, Chapter 3 paragraph 5 of the ECB Guide

                     Article 225(2) of Regulation (EU) No 575/2013: own estimate of volatility adjustments

                     Section II, Chapter 3 paragraph 7 of the ECB Guide

                     Article 243(2) and the second subparagraph of Article 244(2) of Regulation (EU) No 575/2013: significant risk transfer

                     Section II, Chapter 3 paragraph 8 of the ECB Guide

                     Article 283(3) of Regulation (EU) No 575/2013: implementation of the Internal Model Method

                     Section II, Chapter 3 paragraph 9 of the ECB Guide

                     Article 284(4) and (9) of Regulation (EU) No 575/2013: calculation of the exposure value for counterparty credit risk

                     Section II, Chapter 3 paragraph 10 of the ECB Guide

                     Article 311(3) of Regulation (EU) No 575/2013: market risk (exposures to central counterparties)

                     Section II, Chapter 3 paragraph 11 of the ECB Guide

                     Article 366(4) of Regulation (EU) No 575/2013: calculation of the value-at-risk number

                     Section II, Chapter 3 paragraph 12 of the ECB Guide

                           Institutional protection schemes

                     Article 8(4) of Regulation (EU) No 575/2013: liquidity waiver for members of institutional protection schemes

                     Section II, Chapter 4 paragraph 3 of the ECB Guide

                           Large exposures

                     Article 396(1) of Regulation (EU) No 575/2013: compliance with large exposures requirements

                     Section II, Chapter 5 paragraph 3 of the ECB Guide

                           Liquidity

                     Article 422(8) of Regulation (EU) No 575/2013 and Article 29 of Delegated Regulation (EU) 2015/61: intragroup liquidity outflows

                     Section II, Chapter 6 paragraph 11 of the ECB Guide

                     Article 425(4) of Regulation (EU) No 575/2013 and Article 34 of Delegated Regulation (EU) 2015/61: intragroup liquidity inflows

                     Section II, Chapter 6, paragraph 15 of the ECB Guide

                     Article 8(1) of Delegated Regulation (EU) 2015/61: diversification of holdings of liquid assets

                     Section II, Chapter 6 paragraph 5 of the ECB Guide

                     Article 8(3)(c) of Delegated Regulation (EU) 2015/61: management of liquid assets

                     Section II, Chapter 6 paragraph 6 of the ECB Guide

                     Article 8(6) of Delegated Regulation (EU) 2015/61: currency mismatches

                     Section II, Chapter 6 paragraph 4 of the ECB Guide

                     Article 10(2) of Delegated Regulation (EU) 2015/61: haircuts on extremely high quality covered bonds

                     Section II, Chapter 6 paragraph 7 of the ECB Guide

                     Article 24(6) of Delegated Regulation (EU) 2015/61: multiplier for retail deposits covered by a deposit guarantee scheme

                     Section II, Chapter 6 paragraph 8 of the ECB Guide

                     Article 25(3) of Delegated Regulation (EU) 2015/61: higher outflow rates

                     Section II, Chapter 6, paragraph 9 of the ECB Guide

                     Article 26 of Delegated Regulation (EU) 2015/61: outflows with inter-dependent inflows

                     Section II, Chapter 6 paragraph 10 of the ECB Guide

                     Article 30(2) of Delegated Regulation (EU) 2015/61: additional collateral outflows from downgrade triggers

                     Section II, Chapter 6 paragraph 12 of the ECB Guide

                     Article 33(2) of Delegated Regulation (EU) 2015/61: cap on inflows

                     Section II, Chapter 6 paragraph 13 of the ECB Guide

                     Article 33(3)(4) and (5) of Delegated Regulation (EU) 2015/61: specialised credit institutions

                     Section II, Chapter 6 paragraph 14 of the ECB Guide

                           Leverage

                     Article 429(7) of Regulation (EU) No 575/2013: exclusion of intragroup exposures from the calculation of the leverage ratio

                     Section II, Chapter 7 paragraph 3 of the ECB Guide

                           General requirements for access to the activity of credit institutions

                     Article 21(1) of Directive 2013/36/EU: waiver for credit institutions permanently affiliated to a central body

                     Section II, Chapter 9 paragraph 1 of the ECB Guide

                           Governance arrangements and prudential supervision

                     Article 88(1) of Directive 2013/36/EU: combining the functions of the chairman and CEO

                     Section II, Chapter 11 paragraph 4 of the ECB Guide

                     Article 91(6) of Directive 2013/36/EU: additional non-executive directorship

                     Section II, Chapter 11 paragraph 5 of the ECB Guide

                     Article 108(1) of Directive 2013/36/EU: internal capital adequacy assessment process for credit institutions permanently affiliated to a central body

                     Section II, Chapter 11 paragraph 7 of the ECB Guide

                     Article 111(5) of Directive 2013/36/EU: supervision of financial holding companies or mixed financial holding companies with part of the group in non-participating Member States

                     Section II, Chapter 11 paragraph 8 of the ECB Guide

                     Articles 117 and 118 of Directive 2013/36/EU: cooperation obligations

                     Section II, Chapter 11 paragraph 10 of the ECB Guide

                     Article 142 of Directive 2013/36/EU: capital conservation plans

                     Section II, Chapter 11 paragraph 13 of the ECB Guide


Avis juridique important

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52004SC0811

Recommendation for a Council Recommendation to Malta with a view to bringing an end to the situation of an excessive government deficit  /* SEC/2004/0811 final */

Recommendation for a COUNCIL RECOMMENDATION TO MALTA with a view to bringing an end to the situation of an excessive government deficit(presented by the Commission)EXPLANATORY MEMORANDUMOn 7 April 2004, the Commission published its Spring 2004 forecasts [1]. According to these forecasts, which took into consideration data reported by Malta in March 2004, the general government deficit in Malta increased from 5.7% of GDP in 2002 to 9.7% of GDP in 2003, thus exceeding the 3% of GDP Treaty reference value.[1]  The Commission Spring 2004 forecast is available at the following website: http://europa.eu.int/comm/economy_finance/publications/european_economy/2004/ee204en.pdf.Based on this prima facie evidence, the Commission initiated the excessive deficit procedure for Malta on 12 May 2004, with the adoption of the report foreseen in Article 104(3) of the Treaty [2]. On 21 May 2004, the Commission received the convergence programme of Malta, which confirmed a deficit figure of 9.7% of GDP for 2003.[2]  The full text of this report is available at the following website: http://europa.eu.int/comm/economy_finance/about/activities/sgp/procedures_en.htm.The application of the excessive deficit procedure (EDP) is governed by Article 104 of the Treaty and by Council Regulation (EC) No 1467/97 "on speeding up and clarifying the implementation of the excessive deficit procedure", which is part of the Stability and Growth Pact [3]. Countries that joined the EU on 1 May 2004 are Member States with a derogation and are to avoid excessive deficits, but sanctions according to Article 104 (9) and (11) cannot be imposed on them.[3]  OJ L 209, 2.8.1997.The Commission report according to Article 104(3) of the Treaty concluded that the excess of the deficit in 2003 over the 3% of GDP Treaty reference value did not result from an unusual event outside the control of the Maltese authorities, nor was it the result of a severe economic downturn in the sense of the Stability and Growth Pact. Concerning developments in 2004, the report concluded that the general government deficit is likely to decrease but remain above 3% of GDP in 2004. In particular, the Commission Spring 2004 forecast is for a general government deficit of 5.9% of GDP in 2004, which is above the 5.2% of GDP projected by the Maltese authorities in the convergence programmeBased on the Commission Spring 2004 forecasts, the Commission report also concluded that the debt-to-GDP ratio, which had reached 72.0% of GDP in 2003, will further deviate from the 60% reference value of the Treaty in 2004. In particular, the Commission Spring 2004 forecast projects the debt ratio to reach 73.9% of GDP in 2004, which is above the 72.1% of GDP projected by the Maltese authorities in the convergence programme.Article 104(4) of the Treaty states that "the Committee provided for in Article 114 (i.e. the Economic and Financial Committee) has to formulate an opinion on the report of the Commission". The Committee issued its opinion on 24 May 2004, subscribing to the assessment made by the Commission in its report. In particular, the Committee concluded that the budgetary situation in Malta indicated the existence of an excessive deficit under both criteria foreseen by Article 104(2) for the identification of such deficits. Consideration of other relevant factors, in particular the medium-term budgetary position and the public investment ratio, did not change the assessment based on the criteria themselves. The Committee also considered as likely that the general government deficit would continue to exceed the Treaty reference value in 2004, and that general government gross debt would further rise above the Treaty reference value of 60% of GDP in 2004.The Commission, having examined the relevant factors taken into account in its report and having regard to the opinion of the EFC, is of the opinion that an excessive deficit exists in Malta. This opinion, adopted by the Commission on 24 June 2004, has been addressed to the Council, according to Article 104(5) of the Treaty. The Commission has recommended that the Council shall decide accordingly, in conformity with Article 104(6). In addition, the Commission is herewith submitting to the Council a recommendation for a Council recommendation to be addressed to Malta with a view to bringing the situation of an excessive deficit to an end, according to Article 104(7) of the Treaty. The monitoring of the implementation of action taken by Malta may demand that the Council makes further recommendations according to Article 104(7), given the non-applicability of Article 104(9) to Member States with a derogation.Recommendation for a COUNCIL RECOMMENDATION TO MALTA with a view to bringing an end to the situation of an excessive government deficitTHE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community, and in particular Article 104(7) thereof;Having regard to the recommendation from the Commission;Whereas:(1) According to Article 104 of the Treaty, Member States are to avoid excessive government deficits;(2) The Stability and Growth Pact is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth conducive to employment creation;(3) The Council has decided on [5 July] 2004, in accordance with Article 104(6), that an excessive deficit exists in Malta;(4) Having decided on the existence of an excessive deficit in Malta, the Council, in accordance with Article 104(7) of the Treaty and Article 3 of Council Regulation (EC) No 1467/97, is required to make at the same time recommendations to the Member State concerned with a view to bringing that situation to an end within a given period;(5) According to Article 3(4) of Council Regulation (EC) No 1467/97, this recommendation should specify that effective action is to be taken by the Member State concerned within four months at most and that the correction of the excessive deficit should be completed in the year following its identification unless there are special circumstances. Such special circumstances are present in the case of Malta namely because the general government deficit upon EU accession was significantly above the reference value;(6) The existence of special circumstances authorises the Council to allow the correction of the excessive deficit in a medium-term framework. It is appropriate to consider the convergence programme submitted by Malta in May 2004, and its subsequent updates, and the Council Opinions thereof as providing the adjustment path for the correction of the excessive deficit. The convergence programme of May 2004 plans to reduce the excessive deficit below the 3% reference value by 2006, with the following annual targets for the general government deficit: 5.2% of GDP in 2004, 3.7% in 2005, 2.3% in 2006 and 1.4% in 2007. In addition, the programme envisages the debt ratio, which reached 72.0% in 2003 to rise further above the 60% of GDP Treaty reference value until 2005 (to 72.4%) but to decline thereafter to 70.4% in 2007. The adjustment path is based on a macro-economic scenario which, according to the Council Opinion of [5 July] 2004 on the convergence programme, is plausible;(7) In the view of the Council, budgetary consolidation measures should secure a lasting improvement in the general government balance, while being geared towards enhancing the quality of the public finances and reinforcing the growth potential of the economy.HEREBY RECOMMENDS:- the Maltese authorities to put an end to the present excessive deficit situation as rapidly as possible;- the Maltese authorities to take action in a medium-term framework in order to bring the deficit below 3% of GDP in 2006 in a credible and sustainable manner, in accordance with the path for deficit reduction specified in the Council Opinion of [5 July] 2004 on the convergence programme submitted in May 2004;- the Maltese authorities to implement with vigour the measures envisaged in the May 2004 convergence programme, in particular those of a structural nature aimed at rationalising and reducing expenditures;- The Maltese authorities to take effective action by [5 November] 2004 regarding the measures envisaged to achieve the 2005 deficit target;- The Maltese authorities to ensure that the rise in the debt ratio is brought to a halt in 2005 and reversed thereafter as specified in the Council Opinion on the convergence programme submitted in May 2004.In addition, the Council invites the Maltese authorities to ensure that budgetary consolidation towards the medium term budgetary position of close to balance or in surplus is sustained after the excessive deficit has been corrected.This recommendation is addressed to the Republic of Malta.Done at Brussels, [5 July] 2004.For the CouncilThe Presidentxxxxxx


title: Council Recommendation of 20 December 2012 on the validation of non-formal and informal learning

text:
               22.12.2012

               EN

               Official Journal of the European Union

               C 398/1

         COUNCIL RECOMMENDATION
   of 20 December 2012
   on the validation of non-formal and informal learning
   2012/C 398/01
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 165 and 166 thereof,
   Having regard to the proposal from the European Commission,
   Whereas:

               (1)

               The validation of learning outcomes, namely knowledge, skills and competences acquired through non-formal and informal learning can play an important role in enhancing employability and mobility, as well as increasing motivation for lifelong learning, particularly in the case of the socio-economically disadvantaged or the low-qualified.

               (2)

               At a time when the European Union is confronted with a serious economic crisis which has caused a surge in unemployment, especially among young people, and in the context of an ageing population, the validation of relevant knowledge, skills and competences has an even more valuable contribution to make in improving the functioning of the labour market, in promoting mobility and in enhancing competitiveness and economic growth.

               (3)

               Employer organisations, individual employers, trade unions, chambers of industry, commerce and skilled crafts, national entities involved in the process of recognising professional qualifications and in assessing and certifying learning outcomes, employment services, youth organisations youth workers, education and training providers, as well as civil society organisations are all key stakeholders with an important role to play in facilitating opportunities for non-formal and informal learning and any subsequent validation processes.

               (4)

               The ‘Europe 2020’ strategy for smart, sustainable and inclusive growth calls for the development of knowledge, skills and competences for achieving economic growth and employment. The accompanying flagship initiatives ‘Youth on the Move’ and the ‘Agenda for new skills and jobs’ emphasise the need for more flexible learning pathways that can improve entry into and progression in the labour market, facilitate transitions between the phases of work and learning and promote the validation of non-formal and informal learning.

               (5)

               The Council conclusions of 12 May 2009 on a strategic framework for European cooperation in education and training (ET 2020) (1) noted that lifelong-learning should be regarded as a fundamental principle underpinning the entire framework, which is designed to cover learning in all contexts whether formal, non-formal or informal.

               (6)

               The ‘EU Strategy for Youth — Investing and Empowering; a renewed open method of coordination to address youth challenges and opportunities’ of 2009 called for better recognition of skills acquired through non-formal education for young people and stressed the need for full use to be made of the range of tools established at EU level for the validation of knowledge, skills and competences for the recognition of qualifications. It was endorsed by Council Resolution of 27 November 2009 on a renewed framework for European cooperation in the youth field (2010-2018) (2).

               (7)

               In the Bruges Communiqué of December 2010, the European Ministers for Vocational Education and Training, the European Social Partners and the European Commission declared that participating countries should start to develop, no later than 2015, national procedures for the recognition and validation of non-formal and informal learning, supported, as appropriate, by national qualifications frameworks.

               (8)

               The Communiqué of the Conference of European Ministers responsible for Higher Education held in Leuven and Louvain-la-Neuve on 28 and 29 April 2009 underlined that successful policies for lifelong learning should include basic principles and procedures for the recognition of prior learning on the basis of learning outcomes, while the Council conclusions of 28 November 2011 on the modernisation of higher education (3) called upon Member States to develop clear routes into higher education from vocational and other types of education, as well as mechanisms for recognising prior learning and experience gained outside formal education and training.

               (9)

               Council Resolution of 28 November 2011 on a renewed European agenda for adult learning (4) defined as one of its priority areas for the period 2012-14 the putting in place of fully functional systems for validating non-formal and informal learning and promoting the use by adults of all ages and at all qualification levels, as well as by enterprises and other organisations.

               (10)

               The Council Resolution of 19 December 2002 on the promotion of enhanced European cooperation in vocational education and training (5) and the Copenhagen Declaration of 30 November 2002 requested the development of a set of common principles regarding the validation of non-formal and informal learning.

               (11)

               The conclusions of the Council and of the Representatives of the Governments of the Member States, meeting within the Council, of 18 May 2004 promoted Common European Principles for the identification and validation of non-formal and informal learning.

               (12)

               A European Inventory on the validation of non-formal and informal learning containing up-to-date information on current validation practices in European countries has been published regularly since 2004, while European Guidelines for validating non-formal and informal learning were published in 2009.

               (13)

               Decision No 2241/2004/EC of the European Parliament and of the Council of 15 December 2004 on a single Community framework for the transparency of qualifications and competences (Europass) (6) established Europass, a European portfolio which citizens can use to better communicate, record and present their competences and qualifications throughout Europe.

               (14)

               The Resolution of the Council and of the Representatives of the Governments of the Member States, meeting within the Council, of 18 May 2006 on the recognition of the value of non-formal and informal learning within the European youth field (7) invited the Member States to enable the identification of competences acquired through non-formal and informal learning, with a view to their recognition on the labour market.

               (15)

               The Youthpass was created as a transparency tool for participants in projects funded by the ‘Youth in Action’ programme established by the European Parliament and the Council in Decision No 1719/2006/EC (8).

               (16)

               The Recommendation of the European Parliament and of the Council of 23 April 2008 on the establishment of the European Qualifications Framework for lifelong-learning (9) invited Member States to relate their national qualifications systems to the European Qualifications Framework and to promote the validation of non-formal and informal learning in accordance with the Common European Principles agreed in May 2004.

               (17)

               The European Credit Transfer and Accumulation System (ECTS) established in 1989 within the framework of the Erasmus programme awards credits for formal learning based on learning outcomes and student workload, and also facilitates the award by higher education institutions of credits based on learning outcomes for non-formal and informal learning experiences.

               (18)

               The Recommendation of the European Parliament and of the Council of 18 June 2009 on the establishment of a European Quality Assurance Reference Framework for Vocational Education and Training (10) stated that that Framework should support the implementation of the Common European Principles for the identification and validation of non-formal and informal learning, improving the interrelationship of education, training and employment, and building bridges between formal, non-formal and informal learning.

               (19)

               The Recommendation of the European Parliament and of the Council of 18 June 2009 (11) established a European Credit System for Vocational Education and Training (ECVET) to be used for the transfer and accumulation of individuals’ learning outcomes achieved in formal and, where appropriate, non-formal and informal contexts.

               (20)

               Consultations in the form of an online survey, discussions in relevant policy bodies, as well as a variety of peer learning activities involving the social partners indicate an overwhelming consensus on the importance of making visible the knowledge, skills and competences gained through life and work experience, and show broad support for a Union initiative to enhance validation policy and practice in the Member States,

         HAS ADOPTED THIS RECOMMENDATION:

               1.

               THE MEMBER STATES SHOULD, WITH A VIEW TO OFFERING INDIVIDUALS THE OPPORTUNITY TO DEMONSTRATE WHAT THEY HAVE LEARNED OUTSIDE FORMAL EDUCATION AND TRAINING — INCLUDING THROUGH MOBILITY EXPERIENCES — AND TO MAKE USE OF THAT LEARNING FOR THEIR CAREERS AND FURTHER LEARNING, AND WITH DUE REGARD FOR THE PRINCIPLE OF SUBSIDIARITY:

                           1.

                           have in place, no later than 2018, in accordance with national circumstances and specificities, and as they deem appropriate, arrangements for the validation of non-formal and informal learning which enable individuals to:

                                       (a)

                                       have knowledge, skills and competences which have been acquired through non-formal and informal learning validated, including, where applicable, through open educational resources;

                                       (b)

                                       obtain a full qualification, or, where applicable, part qualification, on the basis of validated non-formal and informal learning experiences, without prejudice to other applicable Union law, in particular Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (12).

                                 Member States may prioritise certain areas and/or sectors within their validation arrangements in accordance with their needs;

                           2.

                           include, as appropriate, the following elements in arrangements for the validation of non-formal and informal learning, whilst allowing each individual to take advantage of any of these, either separately or in combination, in accordance with his/her needs:

                                       (a)

                                       IDENTIFICATION of an individual's learning outcomes acquired through non-formal and informal learning;

                                       (b)

                                       DOCUMENTATION of an individual's learning outcomes acquired through non-formal and informal learning;

                                       (c)

                                       ASSESSMENT of an individual's learning outcomes acquired through non-formal and informal learning;

                                       (d)

                                       CERTIFICATION of the results of the assessment of an individual's learning outcomes acquired through non-formal and informal learning in the form of a qualification, or credits leading to a qualification, or in another form, as appropriate;

                           3.

                           apply, as appropriate, the following principles in arrangements for the validation of non-formal and informal learning, whilst taking into consideration national, regional and/or local, as well as sectoral needs and characteristics:

                                       (a)

                                       the validation arrangements are linked to national qualifications frameworks and are in line with the European Qualifications Framework;

                                       (b)

                                       information and guidance on the benefits of, and opportunities for validation, as well as on the relevant procedures, are available to individuals and organisations;

                                       (c)

                                       disadvantaged groups, including individuals who are unemployed and those at risk of unemployment, are particularly likely to benefit from the validation arrangements, since validation can increase their participation in lifelong learning and their access to the labour market;

                                       (d)

                                       individuals who are unemployed or at risk of unemployment have the opportunity, in accordance with national legislation and specificities, to undergo a ‘skills audit’ aimed at identifying their knowledge, skills and competences within a reasonable period of time, ideally within six months of an identified need;

                                       (e)

                                       the validation of non-formal and informal learning is supported by appropriate guidance and counselling and is readily accessible;

                                       (f)

                                       transparent quality assurance measures in line with existing quality assurance frameworks are in place that support reliable, valid and credible assessment methodologies and tools;

                                       (g)

                                       provision is made for the development of the professional competences of staff involved in the validation process across all relevant sectors;

                                       (h)

                                       qualifications or, where applicable, parts of qualifications obtained by means of the validation of non-formal and informal learning experiences comply with agreed standards that are either the same as, or equivalent to, the standards for qualifications obtained through formal education programmes;

                                       (i)

                                       the use of Union transparency tools, such as the Europass framework and Youthpass, is promoted in order to facilitate the documentation of learning outcomes;

                                       (j)

                                       synergies exist between validation arrangements and credit systems applicable in the formal education and training system, such as ECTS and ECVET;

                           4.

                           promote the involvement in the development and implementation of the elements and principles referred to in points 1 to 4 of all relevant stakeholders, such as employers, trade unions, chambers of industry, commerce and skilled crafts, national entities involved in the process of recognition of professional qualifications, employment services, youth organisations, youth workers, education and training providers, and civil society organisations.
                           To foster participation in this process:

                                       (a)

                                       employers, youth organisations and civil society organisations should promote and facilitate the identification and documentation of learning outcomes acquired at work or in voluntary activities, using relevant Union transparency tools such as those developed under the Europass framework and Youthpass;

                                       (b)

                                       education and training providers should facilitate access to formal education and training on the basis of learning outcomes acquired in non-formal and informal settings and, if appropriate and possible, award exemptions and/or credits for relevant learning outcomes acquired in such settings;

                           5.

                           promote coordination on validation arrangements between stakeholders in the education, training, employment and youth sectors, as well as between those in other relevant policy areas.

               2.

               THE MEMBER STATES AND THE COMMISSION SHOULD TAKE THE FOLLOWING MEASURES:

                           (a)

                           follow up this Recommendation through the European Qualifications Framework advisory group set up under the Recommendation of the European Parliament and of the Council of 23 April 2008 on the establishment of the European Qualifications Framework for lifelong learning (13) (EQF) and involve, as appropriate, relevant youth organisations and representatives of the voluntary sector in subsequent EQF advisory group activities;

                           (b)

                           report on the progress made following the adoption of this Recommendation in future Joint Reports by the Council and the Commission under the ‘ET 2020’ strategic framework and in future Joint European Union Youth Reports under the renewed framework for European cooperation in the youth field;

                           (c)

                           support the implementation of this Recommendation by using the expertise of Union agencies, in particular Cedefop, and by reporting on the situation with regard to the validation of non-formal and informal learning in the annual report on the development of National Qualification Frameworks.

               3.

               THE COMMISSION SHOULD TAKE THE FOLLOWING MEASURES:

                           (a)

                           support Member States and stakeholders by:

                                       —

                                       facilitating effective peer learning and exchanges of experience and good practice,

                                       —

                                       regularly reviewing the European Guidelines for validating non-formal and informal learning, in full consultation with the Member States,

                                       —

                                       regularly reviewing the European Inventory on the validation of non-formal and informal learning, in cooperation with the Member States;

                           (b)

                           before 2018, consider further developing, in consultation with the Member States, as specified in Decision No 2241/2004/EC, instruments under the Europass framework which facilitate the transparency across the Union of validated learning outcomes acquired through non-formal and informal learning experiences;

                           (c)

                           ensure that, in cooperation with the Member States, the Lifelong Learning and ‘Youth in Action’ Programmes and, without prejudice to the negotiations on the next Multiannual Financial Framework, the future European programme for education, training, youth and sport and the European Structural Funds, are used to support the implementation of this Recommendation;

                           (d)

                           assess and evaluate, in cooperation with the Member States and after consulting the stakeholders concerned, the action taken in response to this Recommendation, and report to the Council by 31 December 2019 on the experience gained and implications for the future, including if necessary a possible review and revision of this Recommendation.

      Done at Brussels, 20 December 2012.

            For the Council

            The President

         E. FLOURENTZOU

      (1)  OJ C 119, 28.5.2009, p. 2.

      (2)  OJ C 311, 19.12.2009, p. 1.

      (3)  OJ C 372, 20.12.2011, p. 36.

      (4)  OJ C 372, 20.12.2011, p. 1.

      (5)  OJ C 13, 18.1.2003, p. 2.

      (6)  OJ L 390, 31.12.2004, p. 6.

      (7)  OJ C 168, 20.7.2006, p. 1.

      (8)  OJ L 327, 24.11.2006, p. 30.

      (9)  OJ C 111, 6.5.2008, p. 1.

      (10)  OJ C 155, 8.7.2009, p. 1.

      (11)  OJ C 155, 8.7.2009, p. 11.

      (12)  OJ L 255, 30.9.2005, p. 22.

      (13)  OJ C 111, 6.5.2008, p. 1.

      ANNEX

         DEFINITIONS

      For the purposes of this Recommendation, the following definitions shall apply:

                  (a)

                     formal learning means learning which takes place in an organised and structured environment, specifically dedicated to learning, and typically leads to the award of a qualification, usually in the form of a certificate or a diploma; it includes systems of general education, initial vocational training and higher education;

                  (b)

                     non-formal learning means learning which takes place through planned activities (in terms of learning objectives, learning time) where some form of learning support is present (e.g. student-teacher relationships); it may cover programmes to impart work skills, adult literacy and basic education for early school leavers; very common cases of non-formal learning include in-company training, through which companies update and improve the skills of their workers such as ICT skills, structured on-line learning (e.g. by making use of open educational resources), and courses organised by civil society organisations for their members, their target group or the general public;

                  (c)

                     informal learning means learning resulting from daily activities related to work, family or leisure and is not organised or structured in terms of objectives, time or learning support; it may be unintentional from the learner's perspective; examples of learning outcomes acquired through informal learning are skills acquired through life and work experiences, project management skills or ICT skills acquired at work, languages learned and intercultural skills acquired during a stay in another country, ICT skills acquired outside work, skills acquired through volunteering, cultural activities, sports, youth work and through activities at home (e.g. taking care of a child);

                  (d)

                     open educational resources (OER) means digitised materials offered freely and openly for educators, students and self-learners to use and reuse for teaching, learning and research; it includes learning content, software tools to develop, use and distribute content, and implementation resources such as open licences; OER also refers to accumulated digital assets that can be adjusted and which provide benefits without restricting the possibilities for others to enjoy them;

                  (e)

                  a skills audit means a process aimed at identifying and analysing the knowledge, skills and competences of an individual, including his or her aptitudes and motivations in order to define a career project and/or plan a professional reorientation or training project; the aim of a skills audit is to help the individual analyse his/her career background, to self-assess his/her position in the labour environment and to plan a career pathway, or in some cases to prepare for the validation of non-formal or informal learning outcomes;

                  (f)

                  a qualification means a formal outcome of an assessment and validation process which is obtained when a competent body determines that an individual has achieved learning outcomes to given standards;

                  (g)

                     learning outcomes means statements of what a learner knows, understands and is able to do on completion of a learning process, which are defined in terms of knowledge, skills and competences;

                  (h)

                  a national qualifications framework means an instrument for the classification of qualifications according to a set of criteria for specified levels of learning achieved, which aims to integrate and coordinate national qualifications subsystems and improve the transparency, access, progression and quality of qualifications in relation to the labour market and civil society;

                  (i)

                     validation means a process of confirmation by an authorised body that an individual has acquired learning outcomes measured against a relevant standard and consists of the following four distinct phases:

                              1.

                              IDENTIFICATION through dialogue of particular experiences of an individual;

                              2.

                              DOCUMENTATION to make visible the individual's experiences;

                              3.

                              a formal ASSESSMENT of these experiences; and

                              4.

                              CERTIFICATION of the results of the assessment which may lead to a partial or full qualification;

                  (j)

                     recognition of prior learning means the validation of learning outcomes, whether from formal education or non-formal or informal learning, acquired before requesting validation.