title: Council Recommendation of 9 July 2013 on the National Reform Programme 2013 of Romania and delivering a Council opinion on the Convergence Programme of Romania, 2012-2016

text:
               30.7.2013

               EN

               Official Journal of the European Union

               C 217/67

      COUNCIL RECOMMENDATION

   of 9 July 2013
   on the National Reform Programme 2013 of Romania and delivering a Council opinion on the Convergence Programme of Romania, 2012-2016
   2013/C 217/17
   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 9(2) thereof,
   Having regard to the recommendation of the European Commission,
   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 jobs and growth, Europe 2020, based on enhanced coordination of economic policies, which focuses on the key areas where action is needed to boost Europe’s potential for sustainable growth and competitiveness.

               (2)

               On 13 July 2010, the Council 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 (2), which together form the ‘integrated guidelines’. Member States were invited to take the integrated guidelines into account in their national economic and employment policies.

               (3)

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

               (4)

               On 10 July 2012, the Council adopted a recommendation (3) on Romania’s National Reform Programme for 2012 and delivered its opinion on Romania’s Convergence Programme for 2012-2015.

               (5)

               On 28 November 2012, the Commission adopted the Annual Growth Survey, marking the start of the 2013 European Semester of economic policy coordination. Also on 28 November 2012, the Commission, on the basis of 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 (4), adopted the Alert Mechanism Report, in which Romania was not identified as one of the Member States for which an in-depth review would be carried out.

               (6)

               The European Parliament has been duly involved in the European Semester, in accordance with Regulation (EC) No 1466/97, and, on 7 February 2013, adopted a resolution on employment and social aspects in the Annual Growth Survey 2013 and a resolution on the contribution to the Annual Growth Survey 2013.

               (7)

               On 14 March 2012, the European Council endorsed the priorities for ensuring financial stability, fiscal consolidation and action to foster growth. It underscored the need to pursue differentiated, growth-friendly fiscal consolidation, to restore normal lending conditions to the economy, to promote growth and competitiveness, to tackle unemployment and the social consequences of the crisis, and to modernise public administration.

               (8)

               On 30 April 2013, Romania submitted its 2013 National Reform Programme and its Convergence Programme for the period 2012-2016. In order to take account of their interlinkages, the two Programmes have been assessed at the same time.

               (9)

               Based on the assessment of the Convergence Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that the macroeconomic scenario underpinning the budgetary projections in the Programme is plausible and in line with the assessment in the Commission services 2013 spring forecast. Due to its substantial consolidation efforts, and in line with the Council Recommendation, Romania reduced its general government deficit to below 3 % in 2012. The Convergence Programme aims at a medium-term budgetary objective (MTO) of -1 % of GDP (previously -0,7 % of GDP), which is in line with the requirements of the Stability and Growth Pact. The Programme outlines a budgetary strategy aimed at reaching the MTO by 2014 which, when recalculated by the Commission on the basis of the commonly agreed methodology, corresponds to reaching the MTO by 2015. The progress in structural terms towards the MTO is higher than 0,5 % of GDP in 2013 and stands at about 0,4 % in 2014. The expenditure benchmark of the Stability and Growth Pact over the Programme period was met. Adjustment is front-loaded in 2013, with revenue-enhancing measures including reductions in tax-deductible items, an improvement in the taxation of agriculture, the introduction of a windfall levy following the deregulation of gas prices and the introduction of a special tax on the transmission of electricity and gas. The main risks to the Convergence Programme relate to further possible financial corrections linked to the absorption of EU funds, or the financing from the national budget of priority projects, renewed accumulation of arrears, especially at local government level, and limited progress in the restructuring of state-owned enterprises. Romania’s public debt remains relatively low, at 37,8 % of GDP in 2012. It is expected to rise to 38,6 % in 2014 but will remain well below the 60% of GDP threshold over the Programme period.

               (10)

               Following a request by Romania on 17 February 2011, the Commission and the IMF negotiated a precautionary economic adjustment programme with the Romanian authorities. In the context of the Union’s precautionary assistance, Romania undertook to implement a comprehensive economic-policy programme with a particular focus on structural reform measures to improve the functioning of labour and product markets and increase the resilience and growth potential of the Romanian economy. In parallel, that programme has ensured that fiscal consolidation continues, that management and control of public finances improve, and that reforms are implemented in its external, monetary, financial stability, and financial market policies. In March 2013, Romania formally requested a three-month extension of the IMF programme. While the possibility to draw on funds under the EU programme expired at the end of March 2013, the final programme review will take place by the end of June 2013.

               (11)

               Romania’s fiscal position has been improving with the budget deficit decreasing below 3% in 2012 and a further fiscal consolidation expected for 2013. Low tax compliance represents a major challenge for Romania’s tax system, in particular in the areas of VAT and labour taxation. Environmental taxes are below the EU average. While Romania does not face a risk of fiscal stress in the short or medium-term, it is at medium risk in the long-term due to age-related expenditure. There are concerns as regards the sustainability and adequacy of the pension system due to the low ratio of employed contributors to people drawing pensions. Romania is now one of the two Member States that have not yet decided to equalise the pensionable age for women and men, and the employment rate of older workers (41,4 % in 2012) is substantially below the EU average. The Romanian Government has decided to continue the pension reform and associate the social partners in designing the reform and enhance its ownership.

               (12)

               The health sector in Romania features major inequities in terms of access to services provided and their quality. This is due, inter alia, to the inefficient use of resources and to poor management. Reforms to improve the efficiency of the healthcare sector have begun but continuous efforts are needed. The cost-effectiveness of the system could be increased by reducing the excessive use of hospital in-patient care and by strengthening primary care and referral systems.

               (13)

               Romania continued to have a low employment rate of 63,8 % in 2012 although a slight improvement was registered from 62,8 % in the year before. The country’s Europe 2020 target of 70 % by 2020 remains a challenge. Romanian labour productivity is still one of the lowest in the Union. The quality of public employment activation, job search and retraining services is still relatively low. Limited administrative capacity does not allow for the efficient delivery of active labour-market policies through quality personalised services, nor for the better integration of active and passive labour-market policies. Adult participation in lifelong learning remains stagnant at very low levels, which at 1,6 % in 2011, is significantly lower than the EU average of 8,9 %. The youth employment and activity rates were among the lowest in the Union in 2012, at 23,9 % and 30,9 % respectively, whereas the youth unemployment rate was high at 22,7 % in 2012. Romania’s share of young people who are neither in employment nor in education and training, which stood at 16,8 % in 2012, is high and increasing.

               (14)

               Poverty reduction continues to be a major challenge. In 2011, 40,3 % of the population were at risk of poverty and social exclusion, about two thirds more than the EU average of 24,2 %. Children are particularly affected (49,1 %). The impact of social transfers, excluding pensions, in reducing poverty remains significantly below the average efficiency of transfers in the Union, both for the population as a whole (23,7 % in Romania as against 37,5 % for the EU in 2011) and for children (22 % compared to 42,8 % for the Union). The low take-up, coverage and adequacy of social benefits remain a challenge for the efficiency of social benefits in reducing poverty. In the field of social assistance, several pieces of legislation were adopted in 2012 as follow-up to the reform of 2011. The adoption of the remaining legislation would be an important step towards completing the reform. However the link with activation measures could be further strengthened. The implementation of the National Roma Integration Strategy started in 2012, but the results are modest. Better coordination between different stakeholders is needed for an effective implementation of the strategy, including the allocation of financing.

               (15)

               The education law of 2011, a major reform that set a long-term agenda for upgrading the quality of education at all levels, is not yet fully operational. For a successful implementation of the education reform, the necessary financial and human resources will have to be devoted to building up administrative capacity and policy making. Romania faces a major challenge in raising the quality of its education and training system. Early school leaving is a significant challenge. At 17,4 % in 2012, the Romanian early school leaving rate is well above both the EU average of 13,5 % and the national target of 11,3 %. Problems persist especially in rural and remote areas and for the Roma. Romania also lacks an adequate data collection mechanism regarding early school leavers; a comprehensive strategy, to be adopted this year, should help in this regard. Access to quality affordable early childhood education and care remains problematic. Mismatches between skills and labour-market demand are characteristic of a large proportion of vocational and tertiary education programmes, with the poor level of vocational skills being a specific challenge. The high unemployment rate among tertiary graduates and the rate of over-qualification make a further alignment of tertiary education with the labour market a high priority. Positive but slow progress was registered in the transition from institutional to alternative care for children deprived of parental care, but further efforts are needed.

               (16)

               Poor administrative capacity is a core concern for Romania. Public administration is characterised by an inconsistent legal framework, frequent recourse to emergency ordinances, low levels of inter-ministerial cooperation and excessive bureaucracy. It is also undermined by a lack of skills, a lack of transparency in staff recruitment and high management turnover rates. Poor administrative capacity contributes to low absorption of EU funds. The end-2012 absorption target agreed under the EU Financial Assistance Programme was missed by a wide margin. Cumulative absorption by the end of 2012 stood at EUR 5,53 billion or 20,2 % of the total available structural, cohesion and agricultural funds. This was EUR 2,47 billion short of the Programme’s end-2012 target of EUR 8 billion. The absorption rate of structural and cohesion funds improved from 7,5 % at the end of April 2012 to 15,2 % at the end of May 2013.To further improve absorption and reduce the risk of de-commitment in 2013, the Romanian authorities have to focus, inter alia, on measures that would make the EU funds’ managing and control systems more efficient and that would strengthen the administrative capacity of the public procurement system.

               (17)

               Romania faces a number of challenges in economic competitiveness with productivity in industry and services remaining low. Major challenges are a weak business environment and low support for research and development (R&D). Improvements to the business environment should be integrated into a wider, coherent e-government strategy to promote an administrative culture of transparency and legal certainty and provide for better public online services. Romania should also undertake efforts to ease access to finance and to reduce the administrative burden on small and medium-sized enterprises (SMEs). R&D intensity is extremely low, at 0,48 % in 2011, and the efficiency and effectiveness of investment need to be substantially improved. Investors in R&D need to prioritise activities that have the potential to attract private investment. Romania should also strengthen the intellectual property rights framework with a view to increasing the commercialisation of research results.

               (18)

               Romania has a low degree of competition and efficiency in the energy and transport industries. Inefficiency and lack of transparency in the governance of state-owned enterprises in these sectors represent a major challenge. Increasing energy efficiency in buildings, district heating, industry and transport is a further key challenge. Romania is the third most energy-intensive economy in the Union whose energy intensity is 2,5 times higher than the EU average. It is also the third most carbon-intensive economy in the Union. Residential buildings in Romania use eight times more energy than the EU-15 average due to an inefficient district heating system and the fact that buildings are not insulated appropriately. The integration of Romania’s electricity and gas markets in the EU markets remains incomplete and cross-border connections for gas still have to be implemented.

               (19)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Romania’s economic policy. It has assessed the National Reform Programme and Convergence Programme. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Romania but also their compliance with EU rules and guidance, given the need to reinforce the overall economic governance of the Union by providing EU level input into future national decisions. Its recommendations under the European Semester are reflected in recommendations (1) to (8) below.

               (20)

               In the light of this assessment, the Council has examined the Convergence Programme, and its opinion (5) is reflected in particular in recommendation (1) below,

         HEREBY RECOMMENDS that Romania take action within the period 2013-2014 to:

               1.

               Complete the EU/IMF financial assistance programme.

               2.

               Ensure growth-friendly fiscal consolidation and implement the budgetary strategy for the year 2013 and beyond as envisaged, thus ensuring achieving the MTO by 2015. Improve tax collection by implementing a comprehensive tax compliance strategy and fight undeclared work. In parallel, explore ways to increase reliance on environmental taxes. Continue the pension reform started in 2010 by equalising the pensionable age for men and women and by promoting the employability of older workers.

               3.

               Pursue health sector reforms to increase its efficiency, quality and accessibility, in particular for disadvantaged people and remote and isolated communities. Reduce the excessive use of hospital care, including by strengthening outpatient care.

               4.

               Improve labour-market participation, as well as employability and productivity of the labour force, by reviewing and strengthening active labour-market policies, providing training and individualised services, and promoting lifelong learning. Enhance the capacity of the National Employment Agency to increase the quality and coverage of its services. In order to fight youth unemployment, implement rapidly the National Plan for Youth Employment, including for example through a Youth Guarantee. To alleviate poverty, improve the effectiveness and efficiency of social transfers with a particular focus on children. Complete the social assistance reform by adopting the relevant legislation and strengthening its link with activation measures. Ensure concrete delivery of the National Roma Integration Strategy.

               5.

               Speed up the education reform including the building up of administrative capacity at both central and local levels and evaluate the impact of the reforms. Step up reforms in vocational education and training. Further align tertiary education with the needs of the labour market and improve access for disadvantaged people. Implement a national strategy on early school leaving focusing on better access to quality early childhood education, including for Roma children. Speed up the transition from institutional to alternative care for children deprived of parental care.

               6.

               Strengthen governance and the quality of institutions and public administration, in particular by improving the capacity for strategic and budgetary planning, by increasing the professionalism of the public service through improved human resource management and by strengthening the mechanisms for coordination between the different levels of government. Significantly improve the quality of regulations through the use of impact assessments, and systematic evaluations. Step up efforts to accelerate the absorption of EU funds in particular by strengthening management and control systems and improving public procurement.

               7.

               Improve and simplify the business environment in particular through reducing administrative burdens on SMEs and implementing a coherent e-government strategy. Ease and diversify access to finance for SMEs. Ensure closer links between research, innovation and industry, in particular by prioritising research and development activities that have the potential to attract private investment. Step up efforts to improve the quality, independence and efficiency of the judicial system in resolving cases, and fight corruption more effectively.

               8.

               Promote competition and efficiency in network industries by ensuring the independence and capacity of national regulatory authorities, and by continuing the corporate governance reform of state-owned enterprises in the energy and transport sectors. Adopt a comprehensive long-term transport plan and improve broadband infrastructure. Continue to remove regulated gas and electricity prices and improve energy efficiency. Improve the cross-border integration of energy networks and speed up implementation of the gas interconnection projects.

      Done at Brussels, 9 July 2013.

            For the Council

            The President

         R. ŠADŽIUS

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Maintained for 2013 by Council Decision 2013/208/EU of 22 April 2013 on guidelines for the employment policies of the Member States (OJ L 118, 30.4.2013, p. 21).

      (3)  OJ C 219, 24.7.2012, p. 72.

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

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


title: Council Recommendation of 19 March 2007 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (Sixth EDF) for the financial year 2005

text:
               8.5.2007

               EN

               Official Journal of the European Union

               C 103/1

      COUNCIL RECOMMENDATION

   of 19 March 2007
   concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (Sixth EDF) for the financial year 2005
   (2007/C 103/01)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty establishing the European Community,
   Having regard to the Third ACP-EEC Convention, signed at Lomé on 8 December 1984 (1),
   Having regard to Internal Agreement 86/126/EEC on the financing and administration of Community aid (2), and in particular Article 29(3) thereof,
   Having regard to the Financial Regulation of 11 November 1986 applicable to the Sixth European Development Fund (Sixth EDF) (3), and in particular Articles 66 to 73 thereof,
   Having examined the revenue and expenditure account and the balance sheet relating to the Sixth EDF as at 31 December 2005 and the Court of Auditors' report concerning the financial year 2005 together with the Commission's replies (4),
   Whereas

               (1)

               Pursuant to Article 29(3) of the Internal Agreement, the discharge for the financial management of the Sixth EDF is to be given to the Commission by the European Parliament on the recommendation of the Council.

               (2)

               The overall implementation by the Commission of the operations of the Sixth EDF during the financial year 2005 has been satisfactory,

         HEREBY RECOMMENDS that the European Parliament give the Commission a discharge in respect of the implementation of the operations of the Sixth EDF for the financial year 2005.

      Done at Brussels, on 19 March 2007.

            For the Council

            The President

         H. SEEHOFER

      (1)  OJ L 86, 31.3.1986, p. 3.

      (2)  OJ L 86, 31.3.1986, p. 210. Agreement as amended by Decision 86/281/EEC. (OJ L 178, 2.7.1986, p. 13).

      (3)  OJ L 325, 20.11.1986, p. 42.

      (4)  OJ C 263, 31.10.2006, p. 205.


Avis juridique important

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32003H0090

Council Recommendation of 21 January 2003 with a view to giving early warning to France in order to prevent the occurrence of an excessive deficit

Official Journal L 034 , 11/02/2003 P. 0018 - 0019

Council Recommendationof 21 January 2003with a view to giving early warning to France in order to prevent the occurrence of an excessive deficit(2003/90/EC)THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community, and in particular Article 99(4) thereof,Having regard to the 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 6(2) thereof,Having regard to the recommendation of the Commission,Whereas:(1) Article 6(2) of Regulation (EC) No 1466/97, as part of the Stability and Growth Pact, establishes an early warning system for alerting a Member State at an early stage to the need to make the necessary budgetary adjustment to prevent a government deficit becoming excessive. An early warning should be given when the Council identifies actual or expected significant divergence of the budgetary position in a Member State from the medium-term budgetary objective, or the adjustment path towards it, set in the Member State's stability programme for the government balance.(2) In the Resolution on the Stability and Growth Pact adopted in Amsterdam on 17 June 1997(2) the European Council invited all parties to implement the Treaty and the Stability and Growth Pact in a strict and timely manner.(3) In the 2001 updated stability programme of France, on which the Council delivered an opinion on 12 February 2002(3), the French authorities aimed at a 1,4 % of GDP general government deficit in 2002 and 1,3 % of GDP in 2003. The projections for the 2002 general government deficit were rectified to 1,8 % of GDP in February by the French authorities, when they revised the projections for the 2002 real GDP growth from 2,5 % to 1,5 %.(4) The general government deficit in France in 2002 is now projected at 2,8 % of GDP by the French authorities and at 2,7 % of GDP by the Commission, thus 1,4 percentage point above the initial target set in the 2001 updated stability programme. According to Commission services calculations, less than one half, i.e. 0,5 percentage point of GDP, of the total slippage in the general government deficit in 2002 can be attributed to cyclical factors. The remaining part represents a deterioration in the cyclically-adjusted balance.(5) As a consequence of this slippage, the French budgetary position in 2002 is far from close to balance, in actual and cyclically-adjusted terms. Indeed, the cyclically-adjusted deficit is estimated by the Commission services to have increased from about 2 % of GDP in 2001 to 2,7 % of GDP in 2002. This level is clearly too high to ensure that the general government deficit does not breach the 3 % of GDP reference value under normal cyclical fluctuations.(6) The draft budget for 2003 presented in September projects a slight reduction in the general government deficit at 2,6 % of GDP, in the context of an expected acceleration in real GDP growth to 2,5 %. The Broad Economic Policy Guidelines for 2002 recommended that France should "aim at a sufficient decline of the 2003 deficit to ensure that a close to balance position in 2004 can be achieved". According to Commission calculations based on the French programme update, the cyclically-adjusted budgetary deficit will decline slightly by 0,2 % to 2,6 % in 2003.(7) Taking also into account significant downward risks surrounding the macroeconomic perspectives, the budgetary position foreseen in the 2003 draft budget is at a level which could lead to the occurrence of an excessive deficit, should the recovery be less pronounced than assumed in the budget or in case further slippage in the 2003 budget would occur. The Commission autumn forecasts project an increase in the general government deficit from 2,7 % in 2002 to 2,9 % of GDP in 2003, in a context where real GDP growth accelerates from 1,0 % in 2002 to 2,0 % in 2003.(8) In view of these elements, the risk for the general government deficit to breach the 3 % of GDP threshold has not been removed. Moreover, this divergence influences medium term commitments, as the attainment of a close to balance position is now postponed.(9) On the basis of information provided by the French authorities and of the assessments made by the Commission, the Council identifies a significant divergence in terms of Article 6(2) of Council Regulation (EC) No 1466/97.(10) There is a need for an early warning to be given alerting France in order to prevent the occurrence of an excessive deficit,HEREBY RECOMMENDS:1. The French Government should take all the appropriate measures in order to ensure that the general government deficit does not breach the 3 % of GDP threshold in 2003.2. Adopting measures apt to improve the cyclically-adjusted budgetary position by at least 0,5 percentage point of GDP would not only reduce the risk for the general government deficit to breach the 3 % of GDP threshold in 2003, but also contribute to resuming a budgetary consolidation path towards a close to balance position as from 2003.3. Continuous adjustment in the underlying budgetary position by at least 0,5 % of GDP per year should be pursued also in subsequent years in order to achieve the medium-term budgetary position of close to balance or in surplus by 2006.This Recommendation is addressed to the Republic of France.Done at Brussels, 21 January 2003.For the CouncilThe PresidentN. Christodoulakis(1) OJ L 209, 2.8.1997, p. 1.(2) OJ C 236, 2.8.1997, p. 1.(3) OJ C 51, 26.2.2002, p. 4.


Avis juridique important

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31982K1723

Commission Recommendation No 1723/82/ECSC of 30 June 1982 derogating from Recommendation No 1399/82/ECSC on Community surveillance in respect of the importation of certain iron and steel products covered by the ECSC Treaty and originating in certain non-member countries

Official Journal L 189 , 01/07/1982 P. 0060 - 0060

*****COMMISSION  RECOMMENDATION No 1723/82/ECSC  of 30 June 1982  derogating from recommendation No 1399/82/ECSC on Community surveillance in respect of the importation of certain iron and steel products covered by the ECSC Treaty and originating in certain non-member countries  THE COMMISSION OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 74 thereof,  Whereas import of certain ECSC iron and steel products originating in non-member countries is subject to Community surveillance under Commission recommendation No 1399/82/ECSC (1);  Whereas in view of the trend of imports of wide-flanged beams originating in Spain, particularly as regards their price, has caused the Commission to alter the import arrangements in respect of this product; whereas it is therefore necessary to derogate from certain of the terms of the abovementioned recommendation and make the product in question subject to Article 2 (2.B) and Article 3 (1) of the said recommendation,  MAKES THE FOLLOWING RECOMMENDATION:  Article 1  Notwithstanding recommendation No 1399/82/ECSC, wide-flanged beams originating in Spain, falling within subheading ex 73.11 A I of the Common Customs Tariff and covered by NIMEXE code 73.11-12, shall, as from 1 July 1982, no longer be subject to Article 2 (2.A) but to Article 2 (2.B) and Article 3 (1) of the said recommendation.  Article 2  This recommendation shall enter into force for each Member State on 1 July 1982.  It shall apply until 31 December 1982.  Done at Brussels, 30 June 1982.  For the Commission  Wilhelm HAFERKAMP  Vice-President  (1) OJ No L 157, 8. 6. 1982, p. 5.


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		52013DC0393

			Recommendation for a COUNCIL RECOMMENDATION with a view to bringing an end to the situation of an excessive government deficit in Poland /* COM/2013/0393 final */

			   	Recommendation for a
COUNCIL RECOMMENDATION
with a view to bringing an end to the
situation of an excessive government deficit in Poland

THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the
Treaty on the Functioning of the European Union, and in particular Article
126(7) thereof,
Having regard to the
recommendation from the European Commission,
Whereas:
(1)       According to Article 126
of the Treaty on the Functioning of the European Union (TFEU) Member States
shall avoid excessive government deficits.
(2)       The Stability and Growth
Pact is based on the objective of sound government finances as a means of
strengthening the conditions for price stability and for strong sustainable
growth conducive to employment creation.
(3)       On 7 July 2009, the
Council decided, in accordance with Article 104(6) of the Treaty establishing
the European Community (TEC), that an excessive deficit existed in Poland and
issued a recommendation to correct the excessive deficit by 2012 at the latest[1], in accordance with Article 104(7)
TEC and Article 3 of Council Regulation (EC) No 1467/97 of 7 July 1997 on
speeding up and clarifying the implementation of the excessive deficit
procedure[2].
In order to bring the general government deficit below 3% of GDP in a credible
and sustainable manner, the Polish authorities were recommended to implement
the fiscal stimulus measures in 2009 as planned, ensure an average annual
structural budgetary adjustment of at least 1¼% percentage points of GDP
starting in 2010, spell out detailed measures that are necessary to bring the
deficit below the reference value by 2012 and introduce reforms to contain
primary current expenditure over the following years. The Council established a
deadline of 7 January 2010 for effective action to be taken.
(4)       On 3 February 2010, the
Commission concluded that based on the Commission services' 2009 autumn forecast,
  Poland had taken necessary action in compliance with the Council
recommendation of 7 July 2009 to bring its government deficit below the 3% of
GDP reference value and considered that no additional step in the excessive
deficit procedure was therefore necessary. On the basis of its 2011 autumn
forecast, the Commission considered that Poland was not on track and asked for
additional measures, which Poland provided. Thus, on 11 January 2012 the
Commission confirmed the Polish authorities had taken effective action towards
a timely and sustainable correction of the excessive deficit and no further
steps in the excessive deficit procedure of Poland were needed at the time[3].
(5)       According to Article 3(5)
of Regulation (EC) No 1467/97, the Council may decide, on a recommendation from
the Commission, to adopt a revised recommendation under Article 126(7) TFEU, if
effective action has been taken and unexpected adverse economic events with
major unfavourable consequences for government finances occur after the
adoption of that recommendation. The occurrence of unexpected adverse economic
events with major unfavourable budgetary effects shall be assessed against the
economic forecast underlying the Council recommendation.
(6)       In accordance with Article
126(7) TFEU and Article 3 of Council Regulation (EC) No 1467/97, the Council is
required to make recommendations to the Member State concerned with a view to
bringing the situation of an excessive deficit to an end within a given period.
The recommendation has to establish a maximum deadline of six months for
effective action to be taken by the Member State concerned to correct the
excessive deficit. Furthermore, in a recommendation to correct an excessive
deficit the Council should request the achievement of annual budgetary targets
which, on the basis of the forecast underpinning the recommendation, are
consistent with a minimum annual improvement in the structural balance, i.e.
the cyclically-adjusted balance excluding one-off and other temporary measures,
of at least 0.5% of GDP as a benchmark.
(7)       The Commission services’
2009 spring forecast, which was underlying the Council recommendation under Article
104(7) TEC of 7 July 2009, projected that the Polish economy would expand by 0.8%
in 2010, while the years 2011 and 2012 were beyond that forecast's horizon. In
2009, real GDP increased by 1.6% and it was mainly driven by fiscal and
monetary policy easing, inflows of EU funds financing infrastructure
investments and a currency depreciation. The pick-up in exports and the rebound
of domestic demand led to a recovery in 2010 and 2011, when real GDP grew by
3.9% and 4.5%, respectively, thus GDP growth in 2010 was well above the 0.8% of
GDP expected in the Commission services' 2009 spring forecast. The Commission
services' 2009 spring forecast, which expected the closure of the output gap
beyond the forecast horizon, implicitly assumed a growth rate of the Polish
economy around its potential one in outer years. However, the Polish economy
slowed down sharply in 2012 with real GDP growth of 1.9%. Investment,
especially construction, was held back by government consolidation, subdued
credit growth and households refraining from real estate purchases. Overall, Poland has seen relatively resilient economic activity in 2009-2012, albeit with real GDP
growth below potential in 2012, mainly resulting from the global economic and
financial crisis.
(8)       The Commission services'
2013 spring forecast projects an increase in real GDP of only 1.1% in 2013.
Private consumption is forecast to grow by 0.8% due to falling employment,
subdued wage growth and households rebuilding their savings. The trend in gross
fixed capital formation, particularly in infrastructural construction, is set
to remain negative with a decline of 2.6%, reflecting further fiscal
consolidation, weak external demand and subdued credit growth. In 2014, some
pick up of the economy with a real GDP growth of 2.2% is expected, although
this is subject to risks in both directions depending on the speed of global
recovery.
(9)       The
general government deficit had jumped to 7.4% of GDP in 2009 (from 3.7% of GDP
in 2008) due to a sizeable fiscal stimulus and strong, in-built expenditure dynamics
predicated on high growth. After the excessive deficit procedure was launched,
consolidation measures in 2010 targeted the public sector wage bill, current
spending and increased excise duties. Despite these consolidation measures of 0.6
% the headline deficit increased to 7.9% of GDP in 2010, driven by a sizeable
increase in public investment (0.4% of GDP) and intermediate consumption (0.5%
of GDP). Since 2011, the headline deficits have been influenced by continued
consolidation effort, including cuts in social contributions transferred to
open pension funds, increases in VAT rates and revenue-increasing changes in
other taxes, the introduction of a temporary expenditure rule and cuts in
spending on active labour market policies. Thus, the headline deficit decreased
to 5% of GDP in 2011.
(10)     The general government
deficit, according to actual data reported in the Eurostat notification of
April 2013, reached 3.9% of GDP in 2012. The 2012 deficit outturn is higher
than the expected 3.5% of GDP publicly announced by the Polish authorities in
September 2012. In particular, interest expenditure and social transfers were
higher than projected. On the revenue side, indirect taxes, VAT in particular,
were substantially lower than forecast. An even worse outcome was prevented by
lower execution of public investments, partly counterbalanced by lower capital
transfers received.
(11)     The Commission services'
2013 spring forecast projects the general government deficit at 3.9% of GDP in
2013 (against Poland's deficit target for 2013 of 3.5% of GDP) and, under a
no-policy-change assumption, at 4.1% of GDP in 2014. Taking into account
additional measures contained in the 2013 update of the Polish Convergence
Programme (CP), which was published after the cut-off date of the Commission
services' 2013 spring forecast hardly change the assessment. For 2013 the CP does
not incorporate new discretionary measures. Although the CP envisages keeping
VAT rates at their current level instead of lowering them, the inclusion of
this measure would, according to Commission estimates, reduce the 2014 deficit
to 3.7% of GDP. Therefore, the Commission service’s spring forecast has been
updated with the measures included in the CP in order to have an accurate
baseline scenario for the new recommendation.
(12)     The main downside risk to
budgetary targets in 2013 and beyond is – based on past evidence –strong
procyclicality of indirect and direct tax revenues, below standard revenue
elasticities used in the forecast. In particular, it was experienced in 2012
when, despite an increase in the tax base, indirect tax revenues fell driven by
an increase in VAT refunds and VAT arrears.
(13)     The structural deficit
decreased from 8.3% of GDP in 2010 to 5.4% in 2011 and 3.8% in 2012. Consolidation measures implemented over this period targeted in particular indirect taxes, disability contributions,
contributions to open pension funds, public sector (excluding local government)
wage bill and intermediate consumption. These measures were sizeable and
covered both, revenue and expenditure side. Cumulatively they amounted to 2.1 %
of GDP in 2011 and to 1.6% of GDP in 2012.
(14)     The average annual apparent
fiscal effort over the period 2010-2012 is estimated at 1.5% of GDP. When
adjusted for the significant upward revision in potential output growth since
the time when the recommendation was issued (-0.3pp) and because of revenue
unexpectedly growing at a lower rate than would have been implied by the GDP
growth based on standard elasticities (+0.4pp), the average annual adjusted
structural effort (1.6% of GDP) exceeds the recommended average annual fiscal
effort (1¼% of GDP) over 2010 - 2012. The bottom-up
approach estimates the cumulative size of consolidation measures at some 4.3%
of GDP over 2010-2012. Thus, Poland has taken effective action.
(15)     The European Commission Fiscal
Sustainability Report 2012 shows that Poland does not face a risk of fiscal
stress in the short run. The country is at medium sustainability risk in a
medium term and at a low risk in a long-term perspective, providing the plans
for fiscal consolidation are fully implemented. The 2012 Ageing Report indicates
a limited projected increase in total age-related public expenditure over the
years 2010-60. Nevertheless, Poland still needs to implement long-term
sustainability-enhancing policies, but this effort is below the average
improvement required for the EU as a whole.
(16)     Public debt declined to
55.6% of GDP in 2012 from 56.2% of GDP in 2011, on the back of sizeable
stock-flow adjustment. The Commission services’ 2013 spring forecast projects
its increase to 57 ½% of GDP in 2013 and, based on a no-policy-change
assumption, to almost 59% of GDP in 2014.
(17)     In order to reduce the
deficit below the 3% of GDP threshold by 2013, thus extending the deadline by
one year, the required structural effort would amount to at least 1.4% of GDP.
Such a yearly effort would be higher than requested in the Council
Recommendation of 7 July 2009 (1¼ % of GDP), despite the fact that fiscal risk
has fallen since 2009 as the headline deficit is at a much lower level and debt
remains below the 60% threshold. As a consequence, a more gradual pace of
consolidation is affordable as it would also reduce output costs, which would
be sizeable if a correction had to be done in 2013. In particular, because the
time available after the recommendation to enact the required measures would be
limited. Therefore, they have to be scaled up to be able to achieve an impact of
about 1% of GDP over the entire year.
(18)     In view of the above and consistent
with the rules of the Stability and Growth Pact, an extension of the deadline
to correct the excessive deficit by two years is warranted.
(19)     Correcting the excessive
deficit by 2014 would be commensurate with intermediate headline deficit
targets of 3.6% of GDP for 2013 and 3.0% of GDP for 2014. The underlying
improvement in the structural budget balance implied by these targets are 0.8%
of GDP in 2013 and 1.3% of GDP in 2014. This implies a need of additional
measures of 0.4% of GDP in 2013 and 0.4% of GDP in 2014, on top of those
already included in the spring forecast and in the update of the Convergence
Programme with an estimated budgetary impact of 0.25% in 2013 and 0.4% of GDP
in 2014.
(20)     Poland fulfils the conditions
for the extension of the deadline for correcting the excessive general
government deficit as laid out in Article 3(5) of Regulation (EC) No 1467/97 on
speeding up and clarifying the implementation of the excessive deficit
procedure,
HAS ADOPTED THIS RECOMMENDATION:
(1)
Poland should bring an
end to the excessive deficit situation by 2014 at the latest.
(2)
Poland should reach a headline deficit target of 3.6% of
GDP in 2013 and 3.0% of GDP in 2014, which is consistent with an annual improvement
of the structural balance of at least 0.8% and 1.3% of GDP respectively, based
on the updated Commission services' 2013 spring forecast.
(3)
Poland should rigorously
implement the measures already adopted , while
complementing them with additional measures sufficient to achieve a correction
of the excessive deficit in 2014 at the latest.
(4)
The Council establishes the deadline of [01
October 2013] for Poland to take effective action and, in accordance with
Article 3(4a) of Council Regulation (EC) No 1467/97, to report in detail the
consolidation strategy that is envisaged to achieve the targets.
Furthermore, Polish authorities should (i)
improve the quality of public finances, in particular through minimising cuts
in growth-enhancing infrastructure investments, a careful review of social
expenditures and their efficiency; (ii) improve tax compliance and increase the
efficiency of tax administration and (iii) make the institutional framework of
public finances more binding and transparent, including through prompt adoption
of a permanent expenditure rule on the general government budget. Finally, to
ensure the success of the fiscal consolidation strategy, it will be important
to back the fiscal consolidation by comprehensive structural reforms, in line
with the Council recommendations addressed to Poland in the context of the
European Semester. Beyond the report foreseen in recommendation (4), the Polish authorities
should report on progress made in the implementation of these recommendations
in a separate chapter in the convergence programmes, until full correction of
the excessive deficit has taken place.
This recommendation is addressed to the Republic of   Poland.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               All documents related to the
excessive deficit procedure of Poland can be found at: http://ec.europa.eu/economy_finance/economic_governance/sgp/deficit/countries/poland_en.htm
[2]               OJ L 209, 2.8.1997, p. 6.
[3]               Communication from the
Commission to the Council on assessment of budgetary implementation in the
context of the ongoing Excessive Deficit Procedures after the Commission
services' 2011 autumn forecast – COM(2012) 4 final, 11.1.2012.


title: Council Recommendation of 10 July 2012 on the National Reform Programme 2012 of Denmark and delivering a Council opinion on the Convergence Programme of Denmark, 2012-2015

text:
               24.7.2012

               EN

               Official Journal of the European Union

               C 219/21

         COUNCIL RECOMMENDATION
   of 10 July 2012
   on the National Reform Programme 2012 of Denmark and delivering a Council opinion on the Convergence Programme of Denmark, 2012-2015
   2012/C 219/06
   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 9(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   After consulting the Economic and Financial Committee,
   Whereas:

               (1)

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

               (2)

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

               (3)

               On 12 July 2011, the Council adopted a recommendation (4) on Denmark’s National Reform Programme for 2011 and delivered its opinion on Denmark’s updated Convergence Programme for 2011-2015.

               (4)

               On 23 November 2011, the Commission adopted the second Annual Growth Survey, marking the start of the second European Semester of ex ante and integrated policy coordination, which is anchored in the Europe 2020 strategy. On 14 February 2012, the Commission, on the basis of Regulation (EU) No 1176/2011, adopted the Alert Mechanism Report, in which it identified Denmark as one of the Member States for which an in-depth review would be carried out.

               (5)

               On 1 December 2011, the Council adopted conclusions calling on the Social Protection Committee, in cooperation with the Employment and other Committees, to present its views on actions recommended within the Europe 2020 policy cycle. These views form part of the opinion of the Employment Committee.

               (6)

               The European Parliament has been duly involved in the European Semester, in accordance with Regulation (EC) No 1466/97, and, on 15 February 2012, adopted a resolution on employment and social aspects in the Annual Growth Survey 2012 and a resolution on the contribution to the Annual Growth Survey 2012.

               (7)

               On 2 March 2012, the European Council endorsed the priorities for ensuring financial stability, fiscal consolidation and action to foster growth. It underscored the need to pursue differentiated, growth-friendly fiscal consolidation, to restore normal lending conditions to the economy, to promote growth and competitiveness, to tackle unemployment and the social consequences of the crisis, and to modernise public administration.

               (8)

               On 2 March 2012, the European Council also invited the Member States participating in the Euro Plus Pact to present their commitments in time to be included in their Stability or Convergence Programmes and in their National Reform Programmes.

               (9)

               On 30 April 2012, Denmark submitted its Convergence Programme for the period 2012-2015 and its 2012 National Reform Programme. In order to take account of their interlinkages, the two Programmes have been assessed at the same time. The Commission concluded in its in-depth review, under Article 5 of Regulation (EU) No 1176/2011, that Denmark is experiencing an internal and an external imbalance, although not excessive ones.

               (10)

               Based on the assessment of the Convergence Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that the macroeconomic scenario underpinning the budgetary projections in that Programme is plausible. The scenario projecting GDP growth at 1,2 and 1,5 % in 2012 and 2013 is broadly in line with the Commission services 2012 spring forecast of 1,1 and 1,4 %. Accordingly, the government deficits are slightly smaller in the Convergence Programme (4,0 and 1,8 % of GDP in 2012 and 2013 respectively, compared with 4,1 and 2,0 % of GDP in the Commission services 2012 spring forecast). The objective of the budgetary strategy outlined in the Convergence Programme is to correct the excessive deficit by 2013 and to achieve the medium-term budgetary objective (MTO) of a structural deficit of no more than 0,5 % of GDP. The Government’s objective is also to reach at least a structurally balanced budget in 2020.
               The Convergence Programme thereby confirms the previous MTO, which adequately reflects the requirements of the Stability and Growth Pact. The planned headline deficit in 2013 is consistent with a timely correction of the excessive government deficit and, based on the (recalculated) structural budget balance (5), the planned fiscal effort in 2013 complies with the Council recommendation issued under the excessive deficit procedure in July 2010. Net discretionary measures, as presented in the Convergence Programme, are estimated to yield a consolidation broadly in line with the recommendation issued under the excessive deficit procedure. The consolidation path has become more back-loaded than previously planned and a sizeable effort is needed in 2013 to ensure the required structural adjustment. Risks of falling short of the 3 % of GDP Treaty reference value in 2013 are limited; the Commission services 2012 spring forecast sees the government deficit at 2,0 % of GDP. Denmark is expected to reach its MTO in 2013. However, based on the (recalculated) structural budget balance, this is not the case from 2013 onwards, and the estimated budgetary improvement in the structural budget balance falls short of the 0,5 % of GDP required by the Stability and Growth Pact. At the same time, the growth rate of government expenditure, taking into account discretionary revenue measures, is expected to be in line with the expenditure benchmark of the Stability and Growth Pact. Part of the budget deficits will be financed by reducing the Government’s account with Denmark’s Nationalbank. Denmark’s gross public debt is projected to fall from 46,5 % of GDP in 2011 to 42,1 % in 2015, well below 60 % of GDP.

               (11)

               Increasing labour supply is a key priority for Denmark in order to ensure future welfare and fiscal sustainability. In 2011, Denmark concluded an ambitious reform of the voluntary early retirement pension scheme and brought forward the previously planned increase in the statutory retirement age and its link to life expectancy. The focus now needs to shift to reforming the disability pension and subsidised employment schemes (the ‘flex-job’ system). The Government has presented a proposal for reform in this area, which should be implemented without delay. The widening gap in employment outcomes between people with a migrant background and the rest of the working population also needs to be addressed.

               (12)

               Labour productivity growth in Denmark has slowed down over the last decades, one of the causes being a relatively weak performance in education. Despite a high level of spending on education, the quality of Danish school education — as measured by the OECD’s Programme for International Student Assessment (PISA) survey — is only average. Furthermore, students generally finish their studies at a later age than in other Member States and the drop-out rates from vocational education institutions are relatively high. To respond to the challenges in this field, the Government has announced a number of new measures for both compulsory and secondary education. The 2012 budget also supports the introduction of social clauses in public procurement calls and measures to make it financially beneficial for private companies to offer apprenticeships, in order to increase the number of available places. Increasing the provision of apprenticeships will also be addressed in tripartite negotiations and in the work of an inter-ministerial committee.

               (13)

               Another potential reason for slow productivity growth is the relatively weak degree of competition in Denmark. In 2011, a competition package was adopted, mainly targeting the construction sector, the retail sector, and health and public sector services. Competition for taxis and transportation services as well as the liberalisation of pharmacies are under investigation, in view of possible new measures. The issue of increasing public procurement in municipalities and regions is currently being negotiated with regional and local governments. In this context, a government committee recently concluded that the Danish competition law is in need of reinforcement, and that sanctions for infringements are currently too low to serve as a deterrent. Given that only limited concrete initiatives have been taken in this area over the past year, further steps are needed to adequately address this challenge.

               (14)

               As confirmed in the in-depth review under Article 5 of Regulation (EU) No 1176/2011, while the high household gross debt to some extent is a structural feature of the Danish economy, with household assets considerably exceeding liabilities, concerns regarding high household debt arise as developments in the housing market seem to have caused the debt to move beyond levels explained by structural factors such as housing and pension assets.
               Furthermore, the composition of mortgage loans has changed since 2003, with instalment-free and variable-rate loans gaining in popularity over fixed-rate loans with instalment. For a given debt level, households are therefore currently more sensitive to interest rates hikes and fluctuations in property prices than they were a decade ago. This poses higher potential risks in terms of financial and economic stability. Relevant measures have been taken in Denmark to address vulnerabilities in the mortgage system. The Ministry of Business and Growth is currently analysing the composition of mortgage loans across households in light of income, labour market history and other socioeconomic variables. The aim is to determine households’ potential vulnerability in the event of different economic shocks, including interest rate fluctuations. However, measures should also be considered to prevent pro-cyclical developments in the housing market in the medium term, preferably by realigning the property value tax with actual market values. Removing the ceiling of the annual increase of the municipal land value tax could also prevent future pro-cyclical effects. Such measures should be introduced gradually, taking into account the current need for stabilisation in the housing market.

               (15)

               Denmark has made a number of commitments under the Euro Plus Pact. These commitments, and the implementation of the commitments presented in 2011, relate to fostering employment, improving competitiveness, enhancing sustainability of public finances and reinforcing financial stability. The Commission has assessed the implementation of the Euro Plus Pact commitments. The results of this assessment have been taken into account in the recommendations below.

               (16)

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

               (17)

               In the light of this assessment, the Council has examined the Convergence Programme, and its opinion (6) is reflected in particular in recommendation (1) below.

               (18)

               In the light of the results of the Commission’s in-depth review and this assessment, the Council has examined the National Reform Programme and the Convergence Programme. Its recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in particular in recommendations (3), (4) and (5) below,

         HEREBY RECOMMENDS that Denmark take action within the period 2012-2013 to:

               1.

               Implement the budgetary strategy as envisaged, to ensure a correction of the excessive deficit by 2013 and achieve the annual average structural adjustment effort specified in the Council recommendations under the excessive deficit procedure. Thereafter, ensure an adequate structural adjustment effort to make sufficient progress towards the MTO, including meeting the expenditure benchmark.

               2.

               Take further steps to enhance long-term labour supply by reforming the disability pension, better targeting subsidised employment schemes (the ‘flex-job’ system) towards people with reduced work capacity, and improving the employability of people with a migrant background.

               3.

               Implement announced measures, without delay, to improve the cost-effectiveness of the education system, reduce drop-out rates, in particular within vocational education, and increase the number of apprenticeships.

               4.

               Continue efforts to remove obstacles to competition, in particular in local services, the retail and construction sector, including by further opening the municipal and regional procurement of services to competition and ensuring that competition law sanctions have a sufficiently deterrent effect.

               5.

               Consider further preventive measures to strengthen the stability of the housing market and financial system in the medium term, including by taking account of the results of the ongoing study by the Ministry of Business and Growth on the distribution of assets and liabilities across households and by reviewing the property value tax system and the municipal land value tax system.

      Done at Brussels, 10 July 2012.

            For the Council

            The President

         V. SHIARLY

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  Maintained for 2012 by Council Decision 2012/238/EU of 26 April 2012 on guidelines for the employment policies of the Member States (OJ L 119, 4.5.2012, p. 47).

      (4)  OJ C 213, 20.7.2011, p. 1.

      (5)  Cyclically-adjusted balance net of one-off and temporary measures, recalculated by the Commission services on the basis of the information provided in the Programme, using the commonly agreed methodology.

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


				|

		52013PC0381

			Recommendation for a COUNCIL DECISION establishing that no effective action has been taken by Belgium in response to the Council Recommendation of 2 December 2009 /* COM/2013/0381 final */

			   	Recommendation for a
COUNCIL DECISION
establishing that no effective action has
been taken by Belgium in response to the Council Recommendation of 2 December
2009
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 126(8) thereof,
Having regard to the recommendation from
the European Commission,
Whereas:
(1)       According to Article 126
of the Treaty, 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. The Stability and Growth Pact includes
Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying
the implementation of the excessive deficit procedure[1], which was adopted in order to
further the prompt correction of excessive general government deficits.
(3)       The Council, acting upon a
recommendation by the Commission, decided on 2 December 2009, in accordance
with Article 126(6) of the Treaty, that an excessive deficit existed in Belgium[2]. On the same day, and also on
the basis of a recommendation by the Commission, the Council adopted recommendations
under Article 126(7) asking the Belgian authorities to take action in a
medium-term framework in order to bring the deficit below 3 % of GDP by 2012 at
the latest.
(4)       Specifically, in order to
bring the general government deficit below 3% of GDP in a credible and
sustainable manner, the Belgian authorities were recommended to (a) implement
the deficit-reducing measures in 2010 as planned in the draft budget for 2010
and strengthen the planned fiscal effort in 2011 and 2012; (b) ensure an average
annual fiscal effort of ¾% of GDP over the period 2010-2012, which should also
contribute to bringing the gross debt ratio back on a declining path that
approaches the reference value at a satisfactory pace by restoring an adequate
level of the primary surplus; (c) specify the measures that are necessary to
achieve the correction of the excessive deficit by 2012, cyclical conditions
permitting, and to accelerate the reduction of the deficit if economic or
budgetary conditions turned out better than expected at the time the EDP
recommendations were issued; and (d) strengthen the monitoring mechanisms to
ensure that fiscal targets are respected. In its recommendations, the Council
established a deadline of 2 June 2010 for effective action to be taken in line
with the provisions of Article 3(4) of Regulation (EC) No 1467/97.
(5)       The Commission services’
2009 Autumn Forecast, which was underlying the Council recommendation under
Article 126(7) of the TFEU of 2 December 2009, projected that the Belgian
economy would expand by 0.6% in 2010 and 1.5% in 2011. The year 2012 was beyond
that forecast's horizon, but under the hypothesis of a gradual closure of the
large negative output gap by 2015, higher growth than in 2011 was expected for
2012. GDP growth in 2010 was substantially above that expected in the
Commission services' 2009 Autumn Forecast, in 2011 it was slightly above the
projected 1.5%, while in 2012 the Belgian economy went through a contraction of
0.2%.
(6)       On 15 June 2010, the
Commission concluded that based on the Commission services' 2010 Spring
Forecast, Belgium had taken effective action in compliance with the Council
recommendation of 2 December 2009 to bring its government deficit below the 3%
of GDP reference value and considered that no additional step in the excessive deficit
procedure was therefore necessary at that point in time.
(7)       Based on the Commission
Services' 2011 Autumn forecast, there was clear evidence of compliance risks
with the 2009 EDP recommendation, given the still significant excess over the
3% of GDP deficit threshold close to the deadline in the absence of a 2012
budget and the fact that the fiscal effort achieved until then fell short of
the recommended one. Therefore, the Commission expressed its concerns and urged
Belgium to take the necessary measures in time to avoid a stepping up of their
EDP. In December 2011, the newly constituted Belgian government agreed on a
draft budget. On 11 January 2012 the Commission concluded that, based on the
macroeconomic scenario prevailing at that moment (a growth projection of 0.9%
according to the Commission services' 2011 Autumn Forecast), the consolidation
measures in the budget and the additional freeze, the deficit would reach 2.9%
of GDP in 2012. Hence the Commission considered that no further steps in the
excessive deficit procedure of Belgium were needed at that point in time.
(8)       A new assessment of the
action taken by Belgium to correct the excessive deficit by 2012 in response to
the Council recommendation under Article 126(7) of the Treaty, leads to the
following conclusions:
–
Following the EDP notification of the 2012
general government deficit and its validation by the Commission (Eurostat), the
2012 deficit came out at 3.9% of GDP. This was partly due to the urgent need to
recapitalize the banking group Dexia at the end of 2012, which had a negative
impact of 0.8% of GDP on the government deficit. However, also without this
operation the deadline would have been missed, with a deficit of 3.2% of GDP
excluding the one-off negative impact of that operation. Moreover, the 2012
budget contained substantial deficit reducing one-off measures, estimated at
around 0.4% of GDP.
–
The primary balance improved from a deficit of
1.9% of GDP in 2009 to 0.4% of GDP in 2010, while remaining broadly stable in
2011. In 2012, the primary deficit deteriorated to 0.5% because of the impact
of the Dexia recapitalization, without which the primary balance would have shown
a surplus of 0.3% of GDP.
–
The average annual fiscal effort since 2010 is
estimated at 0.3% of GDP, significantly below the ¾% of GDP recommended by the
Council. Also after correction for the effects of revised potential output
growth and revenue developments, the adjusted average fiscal effort is less
than half of the recommended effort. A bottom-up calculation estimates the
cumulative net impact of discretionary measures of a permanent nature at around
2% of GDP over 2010-2012. This calculation includes both deficit-reducing
measures as well as expenditure increases to some extent due to policy
decisions of the past (e.g. welfare adaptations of social benefits, rapidly
rising wage subsidies to companies) which partly offset the consolidation
efforts. Moreover, the impact of these 2% of GDP of discretionary measures has
been insufficient to offset the autonomously rising trend in public expenditure
due to population ageing and at the same time achieve the recommended improvement
of the structural balance over the consolidation period.
–
In 2010, Belgium broadly implemented the
deficit-reducing measures as planned, which led to a structural improvement of ½
% of GDP, of which ¼ pp. thanks to a strong decline in interest expenditure.
The nominal deficit fell from 5.6% of GDP in 2009 (which included 0.6 pp. of negative
one-off factors) to 3.8% of GDP, substantially lower than the objective of 4.8%
of GDP planned by the Belgian authorities in the January 2010 Stability
Programme, thanks to the better-than-expected macro-economic outturn. In 2010
GDP grew by 2.4%, compared to a growth rate of 0.6% expected at the time of the
EDP recommendation.
–
Despite relatively favourable macro-economic
conditions in the first half of 2011 (annual GDP growth of 1.8%), the nominal
balance fell only marginally that year, to 3.7% of GDP, compared to a target of
3.6% of GDP in the 2011 Stability Programme. The structural balance
deteriorated by 0.1% in 2011. Therefore, Belgium failed to take advantage of
the relatively favourable economic times to reduce its deficit, partly due to
the political deadlock at federal level between the June 2010 elections and
December 2011.
–
In December 2011, the newly constituted Belgian
government included in the 2012 budget a series of consolidation measures
amounting, according to the budget and the 2012 Stability Programme, to about
3% of GDP. Additional measures were taken in March 2012 and October 2012 in
order to offset the negative impact of the economic slowdown on the budget. At
the end of 2012, the Belgian and French governments needed to increase the
capital of the banking group Dexia, in order to remedy a negative net asset
position and allow the orderly resolution of the group to go ahead. For
Belgium, this had a one-off negative impact on the deficit of 0.8% of GDP.
Moreover, despite a mechanism of reinforced monitoring, the economic downturn
impacted government revenue more than expected, resulting in a deficit at federal
level of 2.7% of GDP excluding the impact of the Dexia operation compared to a
target of 2.4%. In addition, in the April 2013 EDP notification, it turned out
that the local government level had missed its deficit target (-0.3% of GDP
instead of -0.2%), which was only partly offset by a better than expected
result by regions and communities (-0.1% of GDP instead of -0.2%). The
structural budget balance is estimated to have improved by ½ pp. of GDP in
2012. Sizeable government measures have been partly offset by rising interest
expenditure, a negative impact of the automatic indexation of wages and social
benefits linked to past inflation, and a strong increase in pension
expenditure.
–
Public debt rose from 84.0% of GDP in 2007 to
99.6% of GDP in 2012. The dynamics of the deficit and of GDP account for around
6.5 pp. of the increase, while exogenous factors amount to around 9 pp., mainly
due to rescue operations in the financial sector in the form of equity injections.
(9)       Belgium took some measures
to strengthen the monitoring mechanisms to ensure that fiscal targets are
respected, such as the instauration of a monitoring committee in 2010 and a strengthened
monitoring of the budget execution in 2012. However, no significant progress
has been made to adjust the fiscal framework in order to ensure that the
budgetary targets are binding at federal and sub-federal levels, and increase
transparency of burden-sharing and accountability across government layers.
(10)     This leads to the
conclusion that the response of Belgium to the Council recommendation according
to Article 126(7) of the Treaty of 2 December 2009 has been insufficient. Belgium
did not put an end to its excessive deficit by 2012. The fiscal effort falls
significantly short of what was recommended by the Council, and was even
entirely absent in 2011,
HAS ADOPTED THIS DECISION:
Article 1
Belgium has not taken effective action in
response to the Council recommendation according to Article 126(7) of the
Treaty of 2 December 2009.
Article 2
This
Decision is addressed to Belgium.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 2.8.1997, p. 6.
[2]               OJ L 125, 21.5.2010, p. 34. All documents related to
the excessive deficit procedure of Belgium can be found at:
http://ec.europa.eu/economy_finance/economic_governance/sgp/deficit/countries/belgium_en.htm


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31987K3451

Commission Recommendation No 3451/87/ECSC of 18 November 1987 on Community surveillance of imports of certain iron and steel products covered by the ECSC Treaty and originating in non-member countries

Official Journal L 328 , 19/11/1987 P. 0023 - 0026

*****COMMISSION  RECOMMENDATION No 3451/87/ECSC  of 18 November 1987  on Community surveillance of imports of certain iron and steel products covered by the ECSC Treaty and originating in non-member countries  THE COMMISSION OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 74 thereof,  Whereas by recommendation No 1160/87/ECSC (1), the Commission subjected to a Community monitoring system the imports into the Community of certain iron and steel products covered by the Treaty establishing the European Coal and Steel Community;  Whereas the reasons which originally led the Commission to introduce this measure, continue to apply and the said surveillance system should therefore be continued and extended so as to provide more detailed information on foreseeable imports and the terms and conditions of such imports.  MAKES THE FOLLOWING RECOMMENDATION:  Article 1  1. The release for free circulation in the Community of iron and steel products covered by the ECSC Treaty, listed in Annexe III thereto and originating in non-member countries, shall be subject to the issue of an import licence.  2. The products referred to in paragraph 1 shall be considered as being of first-choice quality until proof to the contrary is supplied by the importer.  3. The import licence shall be issued or endorsed by the Member States, free of charge and for any quantities requested, upon receipt of the application and in any case within not more than 10 working days from the submission of the completed application and presentation of two duplicates of the relevant purchase contract(s) and the vendor's order confirmation(s). The originals of these documents as well as the pro forma invoice must be produced if required by the licence-issuing authority.  4. Paragraph 1 shall apply without prejudice to the maintenance of existing quantitative restrictions imposed by th Member States on certain iron and steel products in respect of certain non-member countries.  5. The period of validity of the import licence is hereby fixed at three months, without prejudice to possible changes in the import arrangements in force.  Article 2  1. The importer's application must state:  (a) the name, address, occupation, telephone number and telex number of the importer,  (b) the description of the goods and the Combined Nomenclature code (2),  (c) the country of origin,  (d) the country of consignment,  (e) the net weight, by individual lots,  (f) the currency and value invoiced (cif),  (g) the proposed date and place of customs clearance,  (h) where necessary, the precise characteristics establishing any claim that the goods are seconds or of substandard quality.  2. The following additional information shall also be supplied by the importer:  A. For goods originating in and consigned direct from one of the countries listed in Annex I (direct importation):  (a) a full commercial description of the goods, including exact specifications and, where appropriate, declaration of the goods as seconds or of their possible use in shipbuilding, details of the exporter and place of delivery;  (b) the delivered price per tonne, exclusive of VAT, including transport costs from the basing point to point of delivery and all extras or rebates;  (c) particulars of:  (i) the price of the producer in the non-member country of origin, chosen for calculating the delivered price, including the date of the chosen lists;  or  (ii) the Community producer's price lists chosen for calculating the delivered price, including the date of the chosen lists;  or  (iii) where appropriate, the non-member country offer on which the terms of the delivery have been aligned, in sufficient detail to identify the offer and including the date.  B. For goods originating in and consigned direct from one of the countries listed in Annex II (direct importation):  (a) a full commercial description of the products, including exact specifications and, where appropriate, declaration of the goods as seconds or of their possible use in shipbuilding, details of the exporter and place of delivery;  (b) the delivered price per tonne, exclusive of VAT, including transport costs to point of delivery and all extras, rebates and any other factors relevant to calculation of the delivered price;  (c) particulars of:  (i) the Community producer's price lists chosen for calculating the delivered price, including the date of the chosen lists;  or  (ii) where appropriates, the non-member country offer on which the terms of the delivery have been aligned, in sufficient detail to identify the offer and including its date;  (d) for goods corresponding to Combined Nomenclature heading 7201, the name and address of the final purchaser, where known.  C. For goods originating in one of the countries listed in Annex I or II but consigned from any non-member country other than the country of origin (indirect importation), and for goods originating in a non-member country not listed in Annex I or II:  (a) a competence description corresponding to that appearing in the list of products to the basic prices in force and details of the exporter and the place of delivery;  (b) the cif price at the Community frontier, per tonne, in the currency of the contract, plus customs duties applicable and unloading costs.  (c) for goods corresponding to Combined Nomenclature heading 7201, the name and address of the final purchaser, where known.  3. The importer shall declare that neither he nor the purchaser will be granted any reduction, rebate or other form of refund not mentioned in the contract for the transaction, either at the time of the transaction or subsequently.  4. The importer shall certify that this application for an import licence is accurate.  5. The importer shall state whether his application is a repeat of a previous application concerning the same delivery.  Article 3  1. When a licence to import goods originating in the countries listed in Annex I or II is granted, Member States shall notify the Commission of any differences between:  - the delivered price calculated on the basis of the reference price list; and  - the delivered price calculated on the basis of the contract or the pro forma invoice.  They shall also furnish all necessary documents, in particular the duplicates of licence applications, purchase contracts and vendor's order confirmations, whenever the price difference noted is considerable or relates to a large quantity.  2. When a licence is granted to import goods:  - originating in non-member countries other than those listed in Annex I or II,  - originating in a country listed in Annex I or II, but consigned from a non-member country other than the country of origin (indirect importation),  Member States shall inform the Commission of any difference, in ECU per tonne, between:  - the basic price as published in the Official Journal of the European Communities; and  - the cif price at the Community frontier, including customs duties applicable and unloading costs.  3. Within the first 10 days of each month, Member States shall notify the Commission of the tonnage and values (calculating on the basis of the cif prices) for which import licences were issued during the preceding month.  4. The information supplied by Member States shall includes:  (a) a breakdown by country of origin;  (b) a breakdown by product (Combined Nomenclature) for each country of origin;  (c) for each country of origin, the quantities of products declared as being seconds or of substandard quality;  (d) within the total of any one product originating in any one country, the quantities not imported direct from that country and, in such cases, an indication of the country of consignment.  5. Within the first 10 days of each month, Member States shall notify to the Commission:  (a) the tonnage and the values (calculated on the basis of the cif price) for which import licences expired during the preceding month without having been fully or partially used;  (b) the tonnage and the values (calculated on the basis of the cif price) for which previously issued import licences were renewed in whole or in part in the preceding month. Article 4  This recommendation shall enter into force on 1 January 1988.  It shall apply until 31 December 1988.  Done at Brussels, 18 November 1987.  For the Commission  Willy DE CLERCQ  Member of the Commission  (1) OJ No L 112, 29. 4. 1987, p. 13.  (2) OJ No L 256, 7. 9. 1987, p. 1.  ANNEX I  Austria  Finland  Norway  Sweden  ANNEX II  1.2 // Brazil Bulgaria Czechoslovakia Hungary   // Poland Romania South Korea Venezuela  ANNEX III  1.2.3.4.5 // 7201 10 11 7201 10 19 7201 10 30 7201 10 90 7201 20 00 7201 30 10 7201 30 90 7201 40 00 7202 11 10 7202 11 90 7202 99 11 7203 90 00 7204 50 10 7204 50 90 7206 10 00 7206 90 00 7207 11 11 7207 11 19 7207 12 11 7207 12 19 7207 19 11 7207 19 15 7207 19 31 7207 20 11 7207 20 15 7207 20 17 7207 20 31 7207 20 33 7207 20 51 7207 20 55 7207 20 57 7207 20 71 7208 11 00 7208 12 10 7208 12 91 7208 12 99 7208 13 10 7208 13 91 7208 13 99 7208 14 10 7208 14 90 7208 21 10 7208 21 90 7208 22 10 7208 22 91 7208 22 99 7208 23 10 7208 23 91 7208 23 99 7208 24 10 7208 24 90 7208 31 00 7208 32 10 7208 32 30 7208 32 51 7208 32 59   // 7208 32 91 7208 32 99 7208 33 10 7208 33 91 7208 33 99 7208 34 10 7208 34 90 7208 35 10 7208 35 91 7208 35 93 7208 35 99 7208 41 00 7208 42 10 7208 42 30 7208 42 51 7208 42 59 7208 42 91 7208 42 99 7208 43 10 7208 43 91 7208 43 99 7208 44 10 7208 44 90 7208 45 10 7208 45 91 7208 45 93 7208 45 99 7208 90 10 7209 11 00 7209 12 10 7209 12 90 7209 13 10 7209 13 90 7209 14 10 7209 14 90 7209 21 00 7209 22 10 7209 22 90 7209 23 10 7209 23 90 7209 24 10 7209 24 91 7209 24 99 7209 31 00 7209 32 10 7209 32 90 7209 33 10 7209 33 90 7209 34 10 7209 34 90 7209 41 00 7209 42 10 7209 42 90 7209 43 10 7209 43 90 7209 44 10   // 7209 44 90 7209 90 10 7210 11 10 7210 12 11 7210 12 19 7210 20 10 7210 31 10 7210 39 10 7210 41 10 7210 49 10 7210 50 10 7210 60 11 7210 60 19 7210 70 11 7210 70 19 7210 90 31 7210 90 33 7210 90 35 7210 90 39 7211 11 00 7211 12 10 7211 12 90 7211 19 10 7211 19 91 7211 19 99 7211 21 00 7211 22 10 7211 22 90 7211 29 10 7211 29 91 7211 29 99 7211 30 10 7211 41 10 7211 41 91 7211 49 10 7211 90 11 7212 10 10 7212 10 91 7212 21 11 7212 29 11 7212 30 11 7212 40 10 7212 40 91 7212 50 31 7212 50 51 7212 60 11 7212 60 91 7213 10 00 7213 20 00 7213 31 00 7213 39 00 7213 41 00 7213 49 00 7213 50 00 7214 20 00 7214 30 00  // 7214 40 10 7214 40 91 7214 40 99 7214 50 10 7214 50 91 7214 50 99 7214 60 00 7215 90 10 7216 10 00 7216 21 00 7216 22 00 7216 31 00 7216 32 00 7216 33 00 7216 40 10 7216 40 90 7216 50 10 7216 50 90 7216 90 10 7218 10 00 7218 90 11 7218 90 13 7218 90 15 7218 90 19 7218 90 50 7219 11 10 7219 11 90 7219 12 10 7219 12 90 7219 13 10 7219 13 90 7219 14 10 7219 14 90 7219 21 10 7219 21 90 7219 22 10 7219 22 90 7219 23 10 7219 23 90 7219 24 10 7219 24 90 7219 31 10 7219 31 90 7219 32 10 7219 32 90 7219 33 10 7219 33 90 7219 34 10 7219 34 90 7219 35 10 7219 35 90 7219 90 11 7219 90 19 7220 11 00 7220 12 00 7220 20 10  // 7220 90 11 7220 90 31 7221 00 10 7221 00 90 7222 10 11 7222 10 19 7222 10 91 7222 10 99 7222 30 10 7222 40 11 7222 40 19 7222 40 30 7224 10 00 7224 90 11 7224 90 30 7225 10 10 7225 10 91 7225 10 99 7225 20 11 7225 20 19 7225 20 30 7225 30 00 7225 40 10 7225 40 30 7225 40 50 7225 40 70 7225 40 90 7225 50 00 7225 90 10 7226 10 10 7226 10 30 7226 20 10 7226 20 31 7226 20 51 7226 20 71 7226 91 00 7226 92 10 7226 99 11 7226 99 31 7227 10 00 7227 20 00 7227 90 10 7227 90 90 7228 10 10 7228 10 30 7228 20 11 7228 20 19 7228 20 30 7228 30 10 7228 30 90 7228 60 10 7228 70 10 7228 70 31 7228 80 10 7228 80 90 7301 10 00


title: Recommendation for a Council opinion in accordance with the third paragraph of Article 5 of Council Regulation (EC) n° 1466/97 of 7 July 1997 on the updated Stability Programme of the Netherlands, 2000-2004

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31975H0115

75/115/EEC: Commission recommendation of 3 February 1975 to the Member States on closer cooperation with respect to the EAGGF (Guarantee Section) operations

Official Journal L 044 , 18/02/1975 P. 0023 - 0023 Greek special edition: Chapter 03 Volume 11 P. 0220  Spanish special edition: Chapter 03 Volume 8 P. 0088  Portuguese special edition Chapter 03 Volume 8 P. 0088

COMMISSION RECOMMENDATION  of 3 February 1975  to the Member States on closer cooperation with respect to the EAGGF (Guarantee Section) operations  (75/115/EEC)  THE COMMISSION OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Economic Community, and in particular Article 155 thereof;  Whereas the campaign against irregularities and fraudulent practices to the detriment of Community funds should be pursued as effectively as possible, particularly with regard to cooperation between the relevant national authorities;  Whereas the Council has not yet taken a Decision on the proposal for a Regulation on mutual assistance between competent authorities of the Member States and between the latter and the Commission for ensuring the correct application of Community customs and agriculture regulations (OJ No C 100, 22.11.1973), or on the proposal for a Directive on cooperation on the recovery of sums wrongly paid in connection with agricultural policy, agricultural levies and customs duties (Doc. COM/72/1578 fin. of 15.12.1972);  Whereas, pending adoption of these Community provisions, the practical aspects of cooperation between national authorities under existing procedures should at least be improved;  Whereas the Agreement between the Member States of the Community for cooperation between the customs administrations (the so-called "Naples" Agreement) is not in itself an instrument which can satisfactorily deal with the difficulties encountered in the campaign against irregularities and fraudulent practices to the detriment of Community funds;  Whereas it is important to obtain the cooperation of all the national authorities responsible for applying Community agricultural regulations affecting the EAGGF, Guarantee Section;  Whereas, independently of the operation of Council Regulations (EEC) No 729/70 and (EEC) No 283/72, immediate practical steps must be taken to procure without delay the necessary cooperation between the national authorities with regard to operations coming within the ambit of the Guarantee Section of the EAGGF;  Whereas, in order to facilitate cooperation between the Member States, reciprocal and direct exchanges of information should be ensured between the authorities of the various Member States on all matters relevant to the campaign against irregularities and fraudulent practices to the detriment of the EAGGF, Guarantee Section;  Whereas like action should be taken to accelerate and simplify the recovery of sums wrongly paid or not received as a result of irregularities and fraudulent practices;  Whereas Article 5 of the Treaty inter alia expressly requires Member States to facilitate the achievement of the Community's tasks;  For the reasons hereinbefore set out,  RECOMMENDS:      - that, in the case of transactions involving revenue or expenditure of the EAGGF, Guarantee Section, each Member State take the necessary internal measures to ensure that the national departments responsible for overseeing such transactions and for the elimination of irregularities and fraudulent practices, communicate to each other all the information necessary in order to verify the correctness of the sums received and payments made, to strengthen efforts to prevent, discover and suppress fraudulent practices and irregularities and to facilitate the recovery of sums wrongly paid or not received as a result of such irregularities or fraudulent practices;       - that, to the same end, each Member State take all necessary steps to enable such departments to establish direct contact with those of the other Member States;       - that each Member State inform the Commission before 31 March 1975 of the measures which it is taking to apply this recommendation.          Done at Brussels, 3 February 1975.  For the Commission  P.J. LARDINOIS  Member of the Commission