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		52012DC0310

			Recommendation for a COUNCIL RECOMMENDATION on Spain’s 2012 national reform programme and delivering a Council opinion on Spain’s stability programme for 2012-2015 /* COM/2012/0310 final */

			   	Recommendation for a
COUNCIL RECOMMENDATION
on Spain’s 2012 national reform programme
and delivering a Council opinion on Spain’s stability programme for 2012-2015
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 121(2) and 148(4)
thereof,
Having regard to Council Regulation (EC) No
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary
positions and the surveillance and coordination of economic policies[1], and in particular Article 5(2)
thereof,
Having regard to Regulation (EU) No
1176/2011 of the European Parliament and of the Council of 16 November 2011 on
the prevention and correction of macroeconomic imbalances[2], and in particular Article 6(1)
thereof,
Having regard to the recommendations of the
European Commission[3],
Having regard to the conclusions of the
European Council,
Having regard to the opinion of the
Employment Committee,
After consulting the Economic and Financial
Committee,
Whereas:
(1)       On 26 March 2010, the
European Council agreed to the European Commission’s proposal to launch a new
strategy for jobs and growth, Europe 2020, based on enhanced coordination of
economic policies, which will focus on the key areas where action is needed to
boost Europe’s potential for sustainable growth and competitiveness.
(2)       On 13 July 2010, the
Council adopted a recommendation on the broad guidelines for the economic
policies of the Member States and the Union (2010 to 2014) and, on 21 October
2010, adopted a decision on guidelines for the employment policies of the
Member States[4],
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 on Spain’s national reform programme for 2011
and delivered its opinion on Spain’s updated stability programme for 2011-2014.
(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) 1176/2011, adopted the Alert Mechanism Report[5], in which it identified Spain as
one of the Member States for which an in-depth review would be carried out.
(5)       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.
(6)       On
2 March 2012, the European Council also invited the Member States participating
in the Euro Plus Pact to include further commitments focusing on a small number
of essential, timely and measurable reforms to achieve the objectives of the
Pact.
(7)       On 30 April 2012, Spain submitted
its stability programme covering 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 has also assessed, in an
in-depth review under Article 5 of Regulation (EU) No 1176/2011, whether Spain
is affected by macroeconomic imbalances. The Commission concluded in its
in-depth review[6]
that Spain is experiencing very serious imbalances, which are not excessive,
but need to be urgently addressed.
(8)       Based on the assessment of
the stability programme pursuant to Article 5(1) of Council Regulation (EC) No
1466/97, the Council is of the opinion that the macroeconomic scenario
underlying the programme is broadly plausible for 2012 and optimistic
thereafter. The Commission's 2012 spring forecast projected GDP growth to reach
-1.8% in 2012 and -0.3% in 2013, against -1.7% and 0.2%, respectively, in the
programme. In compliance with the Excessive Deficit Procedure, the objective of
the budgetary strategy outlined in the programme is to bring the general
government deficit below 3% of the GDP reference value by 2013, based mainly on
expenditure restraint, but also on some revenue-increasing measures. Based on
the (recalculated) structural balance,[7]
the annual average improvement of the structural balance planned in the
programme is 2.6 % of GDP for 2011-13, above the fiscal effort of over 1.5 %
of GDP on average over the period 2010-13 recommended under the Excessive Deficit
Procedure. Following the correction of the excessive deficit, the programme
confirms the medium-term objective (MTO) of a balanced budgetary position in
structural terms, which would be almost reached by 2015 with a structural
budget deficit of 0.2 % of GDP. The MTO adequately reflects the
requirements of the Stability and Growth Pact. The envisaged pace of adjustment
in structural terms in 2012-13, represents sufficient progress towards the MTO
and the growth rate of government expenditure, taking into account
discretionary revenue measures, is in line with the expenditure benchmark of
the Stability and Growth Pact. The programme projects the government debt ratio
to peak in 2013 and to start declining thereafter. In
2014 and 2015 Spain will be in transition period and plans presented in the
programme would ensure sufficient progress towards compliance with the debt reduction
benchmark of the Stability and Growth Pact. The deficit
and debt adjustment paths are subject to important downside risks.
Macroeconomic developments could turn out less favourable than expected.
Moreover, measures are not sufficiently specified from 2013 onwards. Budgetary
compliance by regional governments, given their recent poor track record, a
greater sensitivity of revenues to the ongoing structural adjustment, the
uncertain revenue impact of the fiscal amnesty and potential further financial
rescue operations also pose risks to the budgetary strategy. Strict enforcement
of the Budget Stability Law and the adoption of strong fiscal measures at
regional level would mitigate the risks of a slippage at regional
level. Given the decentralised nature of Spain’s public finances, a strong
fiscal and institutional framework is essential. The Council welcomes the
intention of the Commission to present a thorough assessment of the
implementation of the Council recommendation on correcting the excessive
deficit, also taking into consideration the announced multi-annual budget plan for
2013-14 in the coming weeks.
(9)       In 2011, Spain adopted a
pension reform that marks a significant step towards enhancing the long-term
sustainability of public finances. However, the worsening of the economic
prospects in Spain is limiting the impact of the reform on the projected
age-related public expenditure. In addition, the reform still needs to be
complemented by concrete measures to underpin the Global Employment Strategy
for Older Workers for 2012-2014.
(10)     While the Spanish
tax-to-GDP ratio is among the lowest in the EU, the efficiency of the tax
system can be improved by increasing the share of more growth-friendly indirect
taxes. In particular, there is scope for broadening the VAT tax base by reviewing
the wide application of exemptions and reduced rates. The Spanish tax system
also contains a bias in favour of indebtedness and the purchase of housing as
opposed to rentals thanks to the deductibility of interest on mortgages.
(11)     Spain has made considerable
progress regarding the restructuring of its financial sector. The restructuring
needs to continue, to ensure that unviable banks are resolved and that viable
banks can fulfil their function as providers of credit to the real economy, in
a sustainable way and without unduly distorting competition. Given the
weakening of macroeconomic prospects, further strengthening of the banks'
capital base may be required.
(12)     In February 2012, the
Spanish government adopted a comprehensive reform of the employment protection
and collective bargaining system in order to tackle the high level of unemployment
and the sharp segmentation in the labour market. The effects need to be
monitored, in particular as regards wage developments and reduction of
segmentation. To address the challenge fully, this reform needs to be
complemented by more substantial revision of the active labour market policies to
improve employability and job matching.
(13)     To tackle Spain’s high
youth unemployment, the Youth Action Plan should be implemented without delay,
including for apprenticeship and training contracts. Although Spain has taken
measures to combat early school leaving, the rate remains high and conceals
significant disparities across regions.
(14)     Poverty has increased with
1.1 million more people at risk in 2010 and child poverty is at an alarming
high of 26.2%. The in-work poverty rate for temporary workers is more than
twice as high as the one for permanent workers.
(15)     Professional services in Spain remain protected from competition.
Reforming professional services could increase potential GDP given that they
are a major input for the other sectors of the economy. Particular attention
should be paid to removing unjustified and disproportionate barriers for some
highly regulated professions (e.g. notaries, property registry agents, court
officers). In addition, in Spain it takes the longest
in the EU to obtain a business licence. Lack of coordination between local,
regional and national administrations has produced a proliferation of
regulations, sometimes overlapping, and a segmentation of Spain’s internal
market. The adjustment of large external imbalances requires facilitating
export activities. Spain also faces multiple and complex challenges in the
energy sector which are a serious impediment to effective functioning of the
product and service markets.
(16)     Spain has made a number of
commitments under the Euro Plus Pact. The 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 and the overall state of implementation is partial. The
results of this assessment have been taken into account in the recommendations.
(17)     In the context of the
European Semester, the Commission has carried out a comprehensive analysis of Spain’s
economic policy. It has assessed the stability programme and the national reform
programme, and presented an in-depth review. It has taken into account not only
their relevance for sustainable fiscal and socio-economic policy in Spain but
also their compliance with EU rules and guidance, given the need to reinforce
the overall economic governance of the European Union by providing EU-level
input into future national decisions. Its recommendations under the European
Semester are reflected in recommendations (1) to (8) below.
(18)     In the light of this
assessment, the Council has examined Spain’s stability programme, and its opinion[8]
is reflected in particular in recommendation (1) below.
(19)     In the light of the results
of the Commission’s in-depth review and of this assessment, the Council has
examined Spain’s 2012 national reform
programme and Spain’s stability
programme. Its recommendations under Article 6 of Regulation (EU) No 1176/2011 are
reflected in particular in recommendation (1), (3), (4), (5) and (7) below,
HEREBY RECOMMENDS that Spain should
take action within the period 2012-2013 to:
1.           Deliver an annual average structural fiscal effort of
above 1.5% of GDP over the period 2010-13 as required by the EDP recommendation
by implementing the measures adopted in the 2012 budget and adopting the
announced multi-annual budget plan for 2013-14 by end July. Adopt
and implement measures at regional level in line with the approved rebalancing
plans and strictly apply the new provisions of the Budgetary Stability Law
regarding transparency and control of budget execution. Establish an
independent fiscal institution to provide analysis, advice and monitor fiscal
policy, as well as to estimate the budgetary impact of proposed legislation.
2.           Accelerate the increase in
the statutory retirement age and the introduction of the sustainability factor
foreseen in the recent pension reform and underpin the Global Employment
Strategy for Older Workers with concrete measures to develop lifelong learning
further, improve working conditions and foster the reincorporation of this
group in the job market.
3.           Introduce a taxation
system consistent with the fiscal consolidation efforts and more supportive to growth,
including a shift away from labour towards consumption and environmental
taxation. In particular, address the low VAT revenue ratio by broadening the
tax base for VAT. Ensure less tax-induced bias towards indebtedness and
home-ownership (as opposed to renting).
4.           Implement the reform of
the financial sector, in particular complement the on-going restructuring of
the banking sector by addressing the situation of remaining weak institutions,
put forward a comprehensive strategy to deal effectively with the legacy assets
on the banks' balance sheets, and define a clear stance on the funding and use
of backstop facilities.
5.           Implement the labour
market reforms and take additional measures to increase the effectiveness of
active labour market policies by improving their targeting, by increasing the use
of training, advisory and job matching services, by strengthening their links
with passive policies, and by strengthening coordination between the national
and regional public employment services, including sharing information about job
vacancies.
6.           Review spending priorities
and reallocate funds to support access to finance for SMEs, research, innovation
and young people. Implement the Youth Action Plan, in particular as regards the
quality and labour market relevance of vocational training and education, and reinforce
efforts to reduce early school-leaving and increase participation in vocational
education and training through prevention, intervention and compensation
measures.
7.           Take specific measures to
counter poverty, by making child support more effective and improving the
employability of vulnerable groups.
8.           Take additional measures
to open up professional services, including highly regulated professions, reduce
delays in obtaining business licences and eliminate barriers to doing business
resulting from overlapping and multiple regulations by different levels of
government. Complete the electricity and gas interconnections with neighbouring
countries and address the electricity tariff deficit in a comprehensive way, in
particular by improving the cost efficiency of the electricity supply chain.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 02.08.1997, p. 1
[2]               OJ L 306, 23.11.2011, p. 25
[3]               COM(2012)310 final
[4]               Council Decision 2012/238/EU of 26 April 2012
[5]               COM(2012) 68 final
[6]               SWD(2012)159 final
[7]               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.
[8]               Under Article 5(2) of Council Regulation (EC) No
1466/97.


Avis juridique important

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32003H0311

Commission Recommendation of 11 February 2003 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services (Text with EEA relevance) (notified under document number C(2003) 497)

Official Journal L 114 , 08/05/2003 P. 0045 - 0049

Commission Recommendationof 11 February 2003on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services(notified under document number C(2003) 497)(Text with EEA relevance)(2003/311/EC)THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community,Having regard to Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services(1), and in particular Article 15 thereof,Whereas:(1) Directive 2002/21/EC (hereinafter the Framework Directive), establishes a new legislative framework for the electronic communications sector that seeks to respond to convergence trends by covering all electronic communications networks and services within its scope The aim is to reduce ex ante sector-specific rules progressively as competition in the market develops.(2) The purpose of this Recommendation is to identify those product and service markets in which ex ante regulation may be warranted. However, this first Recommendation has to be consistent with the transition from the 1998 regulatory framework to the new regulatory framework. Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities(2), hereinafter the Access Directive, and Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services(3) hereinafter the Universal service Directive already identify specific market areas which need to be analysed by national regulatory authorities in addition to the markets listed in this Recommendation. In accordance with the Framework Directive, it is for national regulatory authorities to define relevant geographic markets within their territory.(3) Under the 1998 regulatory framework, several areas in the telecommunications sector are subject to ex ante regulation. These areas have been delineated in the applicable directives, but are not always "markets" within the meaning of competition law and practice. Annex I of the Framework Directive provides a list of such market areas to be included in the initial version of the Recommendation.(4) As the title of Annex I of the Framework Directive makes clear, all the market areas listed therein need to be included in the initial version of the Recommendation in order that NRAs can carry out a review of existing obligations imposed under the 1998 regulatory framework.(5) Article 15(1) of the Framework Directive requires the Commission to define markets in accordance with the principles of competition law. The Commission has therefore defined markets (corresponding to the market areas listed in Annex I of the Framework Directive) in accordance with competition law principles.(6) There are in the electronic communications sector at least two main types of relevant markets to consider: markets for services or products provided to end users (retail markets), and markets for the inputs which are necessary for operators to provide services and products to end users (wholesale markets). Within these two types of markets, further market distinctions may be made depending on demand and supply side characteristics.(7) The starting point for the definition and identification of markets is a characterisation of retail markets over a given time horizon, taking into account demand-side and supply-side substitutability. Having characterised and defined retail markets which are markets involving the supply and demand of end users, it is then appropriate to identify relevant wholesale markets which are markets involving the demand of products of, and supply of products to, a third party wishing to supply end users.(8) Defining markets in accordance with the principles of competition law means that some of the market areas in Annex I of the Framework Directive comprise a number of separate individual markets on the basis of demand side characteristics. This is the case of products for retail access to the public telephone network at a fixed location and for telephone services provided at a fixed location. The market area in Annex I referring to wholesale leased lines is defined as separate markets for wholesale terminating segments and wholesale trunk segments on the basis of both demand side and supply side characteristics.(9) In identifying markets in accordance with competition law principles, recourse should be had to the following three criteria. The first criterion is the presence of high and non-transitory entry barriers whether of structural, legal or regulatory nature. However, given the dynamic character and functioning of electronic communications markets, possibilities to overcome barriers within a relevant time horizon have also to be taken into consideration when carrying out a prospective analysis to identify the relevant markets for possible ex ante regulation. Therefore the second criterion admits only those markets the structure of which does not tend towards effective competition within the relevant time horizon. The application of this criterion involves examining the state of competition behind the barriers of entry. The third criterion is that application of competition law alone would not adequately address the market failure(s) concerned.(10) In particular, as far as entry barriers are concerned, two types of entry barriers are relevant for the purpose of this Recommendation: structural barriers and legal or regulatory barriers.(11) Structural barriers to entry result from original cost or demand conditions that create asymmetric conditions between incumbents and new entrants impeding or preventing market entry of the latter. For instance, high structural barriers may be found to exist when the market is characterised by substantial economies of scale and/or economies of scope and high sunk cost. To date, such barriers can still be identified with respect to the widespread deployment and/or provision of local access networks to fixed locations. A related structural barrier can also exist where the provision of service requires a network component that cannot be technically duplicated or only duplicated at a cost that makes it uneconomic for competitors.(12) Legal or regulatory barriers are not based on economic conditions, but result from legislative, administrative or other state measures that have a direct effect on the conditions of entry and/or the positioning of operators on the relevant market. Examples are legal or regulatory barriers preventing entry into a market where there is a limit on the number of undertakings that have access to spectrum for the provision of underlying services. Other examples of legal or regulatory barriers are price controls or other price related measures imposed on undertakings, which affect not only entry but also the positioning of undertakings on the market.(13) Entry barriers may also become less relevant with regard to innovation-driven markets characterised by ongoing technological progress. In such markets, competitive constraints often come from innovative threats from potential competitors that are not currently in the market. In such innovation-driven markets, dynamic or longer term competition can take place among firms that are not necessarily competitors in an existing "static" market. This Recommendation does not identify markets where entry barriers are not expected to persist over a foreseeable period.(14) Even when a market is characterised by high barriers to entry, other structural factors in that market may mean that the market tends towards an effectively competitive outcome within the relevant time horizon. This may for instance be the case in markets with a limited, but sufficient, number of undertakings having diverging cost structures and facing price-elastic market demand. There may also be excess capacity in a market that would allow rival firms to expand output very rapidly in response to any price increase. In such markets, market shares may change over time and/or falling prices may be observed.(15) The decision to identify a market as justifying possible ex ante regulation should also depend on an assessment of the sufficiency of competition law in reducing or removing such barriers or in restoring effective competition. Furthermore, new and emerging markets, in which market power may be found to exist because of "first-mover" advantages, should not in principle be subject to ex-ante regulation.(16) In undertaking periodic reviews of the markets identified in this Recommendation, the three criteria should be used. These criteria should be applied cumulatively, so that failing any one of them means that the market should not be identified in subsequent recommendations. Thus, whether an electronic communications market continues to be identified by subsequent versions of the Recommendation as justifying possible ex ante regulation would depend on the persistence of high entry barriers, on the second criterion measuring the dynamic state of competitiveness and thirdly on the sufficiency of competition law (absent ex ante regulation) to address persistent market failures. A market could also be removed from a recommendation once there is evidence of sustainable and effective competition on that market within the Community, provided that the removal of existing regulation obligations would not reduce competition on that market.(17) The Annex to this Recommendation indicates how each market in the Recommendation is linked to the market areas in Annex I to the Framework Directive. When reviewing existing obligations imposed under the previous regulatory framework, in order to determine whether to maintain, amend or withdraw them, NRAs should undertake the analysis on the basis of the markets identified in this Recommendation, in order to give effect to the requirement that market definition for the purposes of ex ante regulation should be based on competition law principles. Pending the first market analysis by NRAs under the new regulatory framework, existing obligations remain in force.(18) The identification of markets in this Recommendation is without prejudice to markets that may be defined in specific cases under competition law.(19) The range of different network topologies and technologies deployed across the Community means that in some cases national regulatory authorities must decide the precise boundaries between, or elements within, particular markets identified in the Recommendation, while adhering to competition law principles. National regulatory authorities may identify markets that differ from those of the Recommendation, provided they act in accordance with Article 7 of the Framework Directive. Since the imposition of ex ante regulation on a market could affect trade between Member States as described in recital 38 of the Framework Directive, the Commission considers that the identification of any market that differs from those of the Recommendation are likely to be subject to the appropriate procedure in Article 7 of the Framework Directive. Failure to notify a market which affects trade between Member States may result in infringement proceedings being taken. Any market identified by national regulatory authorities should be based on the competition principles developed in the Commission Notice on the definition of relevant market for the purposes of Community competition law(4), and be consistent with the Commission Guidelines on market analysis and the assessment of significant market power and satisfy the three criteria set out above. Should an NRA consider that demand and supply patterns may justify an alternative market definition of a market listed in this Recommendation, it should then follow the appropriate procedures set out in Article 6 and 7 of the Framework Directive.(20) The fact that this Recommendation identifies those product and service markets in which ex ante regulation may be warranted does not mean that regulation is always warranted or that these markets will be subject to the imposition of regulatory obligations set out in the specific Directives. Regulation will not be warranted if there is effective competition on these markets. In particular, regulatory obligations must be appropriate and be based on the nature of the problem identified, proportionate and justified in the light of the objectives laid down in the Framework Directive, in particular maximising benefits for users, ensuring no distortion or restriction of competition, encouraging efficient investment in infrastructure and promoting innovation, and encouraging efficient use and management of radio frequencies and numbering resources.(21) The Commission will review the need for any update of this Recommendation no later than 30 June 2004 on the basis of market developments.(22) This Recommendation has been subject to a public consultation and to consultation with national regulatory authorities and national competition authorities.HAS ADOPTED THIS RECOMMENDATION:1. In defining relevant markets in accordance with Article 15(3) of Directive 2002/21/EC, national regulatory authorities are recommended to analyse the product and service markets identified in the Annex.2. This Recommendation is addressed to the Member States.Done at Brussels, 11 February 2003.For the CommissionErkki LiikanenMember of the Commission(1) OJ L 108, 24.4.2002, p. 33.(2) OJ L 108, 24.4.2002, p. 7.(3) OJ L 108, 24.4.2002, p. 51.(4) OJ C 372, 9.12.1997, p. 5.ANNEXRetail level1. Access to the public telephone network at a fixed location for residential customers.2. Access to the public telephone network at a fixed location for non-residential customers.3. Publicly available local and/or national telephone services provided at a fixed location for residential customers.4. Publicly available international telephone services provided at a fixed location for residential customers.5. Publicly available local and/or national telephone services provided at a fixed location for non-residential customers.6. Publicly available international telephone services provided at a fixed location for non-residential customers.These six markets are identified for the purpose of analysis in respect of Article 17 of the Universal Service Directive.Together, markets 1 through 6 correspond to "the provision of connection to and use of the public telephone network at fixed locations", referred to in Annex I(1) of the Framework Directive. This combined market is also referred to in Article 19 of the Universal Service Directive (for possible imposition of carrier call-by-call selection or carrier selection).7. The minimum set of leased lines (which comprises the specified types of leased lines up to and including 2Mb/sec as referenced in Article 18 and Annex VII of the Universal Service Directive).This market is referred to in Annex I(1) of the Framework Directive in respect of Article 16 of the Universal Service Directive (the provision of leased lines to end users).A market analysis must be undertaken for the purposes of Article 18 of the Universal Service Directive which covers regulatory controls on the provision of the minimum set of leased lines.Wholesale level8. Call origination on the public telephone network provided at a fixed location. For the purposes of this Recommendation, call origination is taken to include local call conveyance and delineated in such a way as to be consistent with the delineated boundaries for the markets for call transit and for call termination on the public telephone network provided at a fixed location.This market corresponds to that referred to in Annex I(2) of the Framework Directive in respect of Directive 97/33/EC (call origination in the fixed public telephone network).9. Call termination on individual public telephone networks provided at a fixed location.For the purposes of this Recommendation, call termination is taken to include local call conveyance and delineated in such a way as to be consistent with the delineated boundaries for the markets for call origination and for call transit on the public telephone network provided at a fixed location.This market corresponds to the one referred to in Annex I(2) of the Framework Directive in respect of Directive 97/33/EC (call termination in the fixed public telephone network).10. Transit services in the fixed public telephone network.For the purposes of this Recommendation, transit services are taken as being delineated in such a way as to be consistent with the delineated boundaries for the markets for call origination and for call termination on the public telephone network provided at a fixed location.This market corresponds to the one referred to in Annex I(2) of the Framework Directive in respect of Directive 97/33/EC (transit services in the fixed public telephone network).11. Wholesale unbundled access (including shared access) to metallic loops and sub-loops for the purpose of providing broadband and voice services.This market corresponds to that referred to in Annex I(2) of the Framework Directive inrespect of Directive 97/33/EC and Directive 98/10/EC (access to the fixed public telephone network, including unbundled access to the local loop) and to that referred to in Annex I (3) of the Framework Directive in respect of Regulation No 2887/2000.12. Wholesale broadband access.This market covers "bit-stream" access that permit the transmission of broadband data in both directions and other wholesale access provided over other infrastructures, if and when they offer facilities equivalent to bit-stream access. It includes "Network access and special network access" referred to in Annex I(2) of the Framework Directive, but does not cover the market in point 11 above, nor the market in point 18.13. Wholesale terminating segments of leased lines.14. Wholesale trunk segments of leased lines.Together, the wholesale markets 13 and 14 correspond to those referred to in Annex I(2) of the Framework Directive in respect of Directive 97/33/EC and Directive 98/10/EC (leased line interconnection) and to those referred to in Annex I(2) of the Framework Directive in respect of Directive 92/44/EEC (wholesale provision of leased line capacity to other suppliers of electronic communications networks or services).15. Access and call origination on public mobile telephone networks, referred to (separately) in Annex I(2) of the Framework Directive in respect of Directives 97/33/EC and 98/10/EC.16. Voice call termination on individual mobile networks.This market corresponds to the one referred to in Annex I(2) of the Framework Directive in respect of Directive 97/33/EC (call termination on public mobile telephone networks).17. The wholesale national market for international roaming on public mobile networks.This market corresponds to the one referred to in Annex I(4) of the Framework Directive.18. Broadcasting transmission services, to deliver broadcast content to end users.NoteNational regulatory authorities have discretion with respect to the analysis of the market for "Conditional access systems to digital television and radio services broadcast" in accordance with Article 6(3) of the Access Directive. Article 6(3) of the Access Directive provides that Member States may permit their NRAs to review the market for conditional access system to digital television and radio services broadcast, irrespective of the means of transmission.


Important legal notice

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52007SC0292

Recommendation for a Council opinion in accordance with the first paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 on the convergence programme of Romania, 2006-2009  /* SEC/2007/0292 final */

	[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |Brussels, 7.3.2007SEC(2007) 292 finalRecommendation for aCOUNCIL OPINIONin accordance with the first paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 on the convergence programme of Romania, 2006-2009(presented by the Commission)EXPLANATORY MEMORANDUM1. GENERAL BACKGROUNDThe Stability and Growth Pact, which entered into force on 1 July 1998, 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 2005 reform of the Pact acknowledged its usefulness in anchoring fiscal discipline but sought to strengthen its effectiveness and economic underpinnings as well as to safeguard the sustainability of the public finances in the long run.Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[1], which is part of the Stability and Growth Pact, stipulates that Member States have to submit, to the Council and the Commission, stability or convergence programmes and annual updates thereof (Member States that have already adopted the single currency submit (updated) stability programmes and Member States that have not yet adopted it submit (updated) convergence programmes).Romania joined the European Union on 1 January 2007 and submitted its first convergence programme on 25 January 2007. In accordance with the Regulation, the Council is to deliver an opinion on it on the basis of a recommendation from the Commission and after having consulted the Economic and Financial Committee (see box for the main points covered by the assessment).2. BACKGROUND FOR THE ASSESSMENT OF THE PROGRAMMEIn order to set the scene against which the budgetary strategy in the convergence programme is assessed, this section summarises the economic and budgetary performance over the last ten years.Romania enjoyed strong economic growth over the past five years, but its GDP per capita (expressed in PPS) is still low at 34% of the EU-25 average in 2005. Therefore, the scope for catching up remains ample and represents Romania's overriding challenge for the medium- and long-term. In 2001-2005 macroeconomic stability improved, as reflected by the sharp and sustained decline in inflation and the consolidation of public finances. Investment accelerated and was reinforced by a notable increase in net FDI which helped shift production into more technology-intensive sectors. The structure of industrial output and exports changed towards higher value-added products, preserving external competitiveness despite the increase in unit labour costs. The notable recovery of economic activity only resulted in a marginal increase in the employment rate, which is fairly low at around 58%. At the same time, Romania witnesses steady emigration and the ageing of its population. The introduction of the flat tax on personal income in January 2005 contributed to a reduction of the informal labour market, which however remains very large.Box: Main points covered by the assessment As required by Article 5(1) (for stability programmes) Article 9(1) (for convergence programmes) of Council Regulation (EC) No 1466/97, the assessment covers the following points: whether the economic assumptions on which the programme is based are plausible; the medium-term budgetary objective (MTO) presented by the Member State and whether the adjustment path towards it is appropriate; whether measures being taken and/or proposed to respect that adjustment path are sufficient to achieve the MTO over the cycle; when assessing the adjustment path towards the MTO, whether a higher adjustment effort is made in economic good times, whereas the effort may be more limited in economic bad times, and, for euro-area and ERM II Member States, whether the Member State pursues an annual improvement of the cyclically-adjusted balance, net of one-off and other temporary measures, of 0.5% of GDP as a benchmark to meet its MTO; when defining the adjustment path to the MTO (for Member States that have not yet reached it) or allowing a temporary deviation from the MTO (for Member States that have), the implementation of major structural reforms which have direct long-term cost-saving effects (including by raising potential growth) and therefore a verifiable impact on the long-term sustainability of public finances (subject to the condition that an appropriate safety margin with respect to the 3% of GDP reference value is preserved and that the budgetary position is expected to return to the MTO within the programme period), with special attention for pension reforms introducing a multi-pillar system that includes a mandatory, fully-funded pillar; whether the economic policies of the Member State are consistent with the broad economic policy guidelines. The plausibility of the programme’s macroeconomic assumptions is assessed by reference to the Commission services’ autumn 2006 forecast, using also the commonly agreed methodology for the estimation of potential output and cyclically-adjusted balances. The assessment of consistency with the broad economic policy guidelines is made against the broad economic policy guidelines in the area of public finances as included in the integrated guidelines for the period 2005-2008. The assessment also examines: the evolution of the debt ratio and the outlook for the long-term sustainability of the public finances, which should be given “sufficient attention in the surveillance of budgetary positions” according to the Council report of 20 March 2005 on “Improving the implementation of the Stability and Growth Pact”. A Commission Communication of 12 October 2006 sets out the approach to the assessment of long-term sustainability[2]; compliance with the code of conduct[3], which inter alia prescribes a common structure and set of data tables for the stability and convergence programmes. |-  Recommendation for aCOUNCIL OPINIONin accordance with the first paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 on the convergence programme of Romania, 2006-2009THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community,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[4], and in particular Article 9(1) thereof,Having regard to the recommendation of the Commission,After consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:1.  On [27 March 2007] the Council examined the convergence programme of Romania, which covers the period 2006 to 2009.2.  Romania enjoyed strong economic growth over the past five years, but its GDP per capita (expressed in PPS) is still low at 34% of the EU-25 average in 2005. Therefore, the scope for catching up remains ample and represents Romania's overriding challenge for the medium- and long-term. In 2001-2005 macroeconomic stability improved, as reflected by the sharp and sustained decline in inflation and the consolidation of public finances. The average inflation rate stood at 6.6% in 2006.3.  The macroeconomic scenario underlying the programme envisages that real GDP growth will decelerate progressively from a well-above potential rate of 8% in 2006 to a still sustained 5.9% in 2009. Assessed against currently available information, this scenario appears to be based on plausible growth assumptions. The programme’s projections for inflation appear to be on the low side since they assume a sustained deceleration of credit and private consumption growth which may not materialise. Unlike the programme, the Commission's services 2006 autumn forecast projects a further widening of the external deficit in 2007 and 2008 on the basis of imports that continue to outpace exports as a result of strong private consumption and investment.4.  For 2006, in the Commission services' autumn 2006 forecast estimated the general government deficit at 1.4% of GDP against a target of 0.7% of GDP set in the December 2005 pre-accession economic programme. The convergence programme estimates the deficit at 2.3% of GDP, but preliminary data point to an even worse outcome. The slippage compared to the original target reflects significant additional expenditure, notably current spending partly due to a reallocation of unspent investment expenditures, which more than offset stronger revenue growth than expected.5.  The main goal of the programme is to pursue fiscal consolidation so as to reach the medium-term objective of a structural deficit (in cyclically-adjusted terms net of one-off and other temporary measures) of 0.9% of GDP in 2011, i.e. beyond the programme period. The programme targets a small reduction of the general government deficit from 2.3% of GDP in 2006 to 2% of GDP in 2009, after a rise to 2.7% of GDP in 2007. The primary deficit is expected to follow a similar path and to stand at 1% of GDP at the end of the programme period.6.  The adjustment, which is marginal and back-loaded is done through an increase in the revenue-to-GDP ratio that is somewhat higher than the increase in the expenditure-to-GDP ratio (almost 4 percentage points compared to 3½ percentage points). On the revenue side, most of the increase comes from taxes (especially in 2007) and from "other revenues" (presumably associated with EU funds inflows). The rise in the expenditure ratio stems to a large extent from a very significant increase in public investment, which is planned to more than double as a percentage of GDP due to an assumed substantial increase in the absorption of EU funds. Compared with the December 2005 pre-accession economic programme, budgetary targets are far less ambitious although the underlying growth assumptions are similar.7.  The structural deficit (i.e. the cyclically-adjusted deficit net of one-off and other temporary measures) calculated according to the commonly agreed methodology is planned to deteriorate further from 3% of GDP in 2006 to around 3½% of GDP in 2007 before improving to 2¼% of GDP in 2009. As mentioned above, the medium-term objective (MTO) for the budgetary position presented in the programme is a structural deficit of 0.9% of GDP, which the programme aims to achieve by 2011, i.e. beyond the programme period. As the MTO is more demanding than the minimum benchmark (estimated at a deficit of 1¾% of GDP), achieving it should fulfil the aim of providing a safety margin against the occurrence of an excessive deficit. The MTO adequately reflects the debt ratio and average potential output growth in the long term.8.  The risks to the budgetary projections in the programme appear broadly balanced in 2007, but budgetary outcomes could be worse than projected in the programme thereafter. In 2007, both expenditure and revenues might be lower than planned: the former because public investment plans are unlikely to be achieved and the latter because the assumed tax intensity of economic activity appears to be very favourable. From 2008 onwards, the budgetary strategy is insufficiently specified, with a volatile path for several expenditure items and an unsubstantiated tightening in 2009. Expenditure slippage in recent years through frequent budgetary amendments, the uncertainty regarding the total amount of compensation to be paid by general government to citizens for the non-return of properties nationalised during the communist regime and potential cancellations of public enterprises' unpaid liabilities towards general government point to a risk of expenditure overruns, even though the level of planned spending on investment will likely be undershot. In addition, over-budgeted resources allocated to investments might be shifted to consumption as seen in the past, with a negative impact on the quality of public spending.9.  In view of this risk assessment, the budgetary stance in the programme seems insufficient to ensure that the MTO is achieved within the programme period, as also envisaged in the programme. In addition, it does not seem to provide a sufficient safety margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations throughout the programme period. The pace of the adjustment towards the MTO implied by the programme is clearly insufficient and should be strengthened significantly to be in line with the Stability and Growth Pact, which specifies that the adjustment should be higher in good economic times and could be lower in bad economic times. In particular, in a context of good times, the structural improvement is marginal and fully back-loaded, with a deterioration in 2007, while the planned adjustment, notably in 2009 is not supported by measures.10.  Government gross debt is estimated to have reached around 13% of GDP in 2006, well below the 60% of GDP Treaty reference value. The programme projects the debt ratio to decline by around 1 percentage point of GDP over the programme period.11.  In the absence of the long-term projections of age-related expenditures, based on the common macroeconomic assumptions as carried out by the EPC/Commission, it is not possible to assess the impact of population ageing in Romania on a comparable and robust basis as it is currently done for the other Member States, for which the projections on this basis are available. However, a significant impact of ageing on expenditure cannot be excluded given the current demographic structure. The initial budgetary position, with a large structural deficit, is not sufficient to stabilise debt even before considering the long-term budgetary impact of ageing. Improving the structural budgetary position over the medium-term would contribute to containing risks to the sustainability of public finances.12.  The budgetary strategy in the programme is partly consistent with the broad economic policy guidelines included in the integrated guidelines for the period 2005-2008. In particular, the budgetary adjustment towards the MTO is clearly insufficient and should be strengthened significantly over the programme period. Moreover, the fiscal strategy put forward in the programme, notably the loosening of the fiscal stance until 2007, raises concern regarding the sustainability of high growth and of the external deficit, which is estimated to have reached 10.3% of GDP in 2006.13.  As regards the data requirements specified in the code of conduct for stability and convergence programmes, the programme has some gaps in the required and optional data[5].The overall conclusion is that, in a context of strong growth prospects and a widening external deficit, the programme envisages a pro-cyclical loosening in 2007 and clearly insufficient and back-loaded progress towards the MTO, which is targeted to be reached only beyond the programme period. Moreover, there are risks to the achievement of the budgetary targets from 2008 onwards. In view of the above assessment, Romania is invited to:(i) exploit the good times to significantly strengthen the pace of adjustment towards the MTO by aiming for more demanding budgetary targets in 2007 and subsequent years;(ii) control the envisaged high increase in public spending and review its composition so as to enhance the growth potential, as well as improve the planning and execution of public expenditures within a binding medium-term framework.Comparison of key macroeconomic and budgetary projections 12005 | 2006 | 2007 | 2008 | 2009 |Real GDP (% change) | CP Jan 2007 | 4.1 | 8.0 | 6.5 | 6.3 | 5.9 |COM Nov 2006 | 4.1 | 7.2 | 5.8 | 5.6 | n.a. |PEP Dec 2005 | 5.7 | 6.0 | 6.3 | 6.5 | n.a. |HICP inflation (%) | CP Jan 2007 | 9.1 | 6.6 | 4.5 | 4.3 | 3.2 |COM Nov 2006 | 9.1 | 6.8 | 5.1 | 4.6 | n.a. |PEP Dec 2005 | 9.0 | 7.0 | 5.0 | 3.6 | n.a. |Output gap (% of potential GDP) | CP Jan 20072 | 0.2 | 2.1 | 2.2 | 1.9 | 1.1 |COM Nov 20066 | 0.4 | 1.9 | 1.5 | 1.0 | n.a. |PEP Dec 2005 | n.a. | n.a. | n.a. | n.a. | n.a. |General government balance (% of GDP) | CP Jan 2007 | -1.5 | -2.3 | -2.7 | -2.6 | -2.0 |COM Nov 2006 | -1.5 | -1.4 | -2.6 | -2.6 | n.a. |PEP Dec 2005 | -0.4 | -0.7 | -1.0 | -1.6 | n.a. |Primary balance (% of GDP) | CP Jan 2007 | -0.4 | -1.2 | -1.6 | -1.5 | -1.0 |COM Nov 2006 | -0.3 | -0.4 | -1.7 | -1.7 | n.a. |PEP Dec 2005 | 0.8 | 0.4 | 0.0 | -0.6 | n.a. |Cyclically-adjusted balance (% of GDP) | CP Jan 20072 | -1.5 | -3.0 | -3.4 | -3.2 | -2.3 |COM Nov 2006 | -1.6 | -2.0 | -3.1 | -2.9 | n.a. |PEP Dec 2005 | n.a. | n.a. | n.a. | n.a. | n.a. |Structural balance3 (% of GDP) | CP Jan 20074 | -1.5 | -3.0 | -3.4 | -3.2 | -2.3 |COM Nov 20065 | -1.6 | -2.0 | -3.1 | -2.9 | n.a. |PEP Dec 2005 | n.a. | n.a. | n.a. | n.a. | n.a. |Government gross debt (% of GDP) | CP Jan 2007 | 15.9 | 12.8 | 13.5 | 12.6 | 11.7 |COM Nov 2006 | 15.9 | 13.7 | 13.9 | 14.4 | n.a. |PEP Dec 2005 | 17.1 | 15.1 | 14.6 | 14.6 | n.a. |Notes: 1 The government accounts of Romania have not yet been officially subject to a complete quality assessment by Eurostat. Eurostat will publish and validate government balance and debt figures shortly after the data notification of 1 April 2007. 2 Commission services calculations on the basis of the information in the programme. 3 Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures. 4 There are no one-off and other temporary measures in the programme. 5 There are no one-off and other temporary measures in the Commission services’ autumn 2006 forecast. 6 Based on estimated potential growth of 5.6%, 5.7%, 6.1% and 6.2% respectively in the period 2005-2008. Source: Convergence programme(CP); Pre-accession economic programme (PEP); Commission services’ autumn 2006 economic forecasts (COM); Commission services’ calculations |[1] OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). All the documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm[2] Communication from the Commission to the Council and the European Parliament, “The long-term sustainability of public finances in the EU” - COM(2006) 574, 12.10.2006 - and European Commission, Directorate-General for Economic and Financial Affairs (2006), “The long-term sustainability of public finances in the European Union”, European Economy No 4/2006.[3] “Specifications on the implementation of the Stability and Growth Pact and guidelines on the format and content of stability and convergence programmes”, endorsed by the ECOFIN Council of 11 October 2005.[4] OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm[5] In particular the data on the subcomponents of the stock-flow adjustment and the contributions to potential GDP growth by labour, capital and TFP are missing.


Important legal notice

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52005SC0231

Recommendation for a Council opinion in accordance with the third paragraph of Art. 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated convergence programme of Latvia, 2004-2007  /* SEC/2005/0231 final */

	Brussels, 16.2.2005SEC(2005) 231 finalRecommendation for aCOUNCIL OPINIONin accordance with the third paragraph of Art. 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated convergence programme of Latvia, 2004-2007(presented by the Commission)EXPLANATORY MEMORANDUMCouncil Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[1] stipulates that non-participating Member States, that is, those which have not adopted the single currency, have to submit convergence programmes to the Council and the Commission. In accordance with Article 9 of this Regulation, the Council has to examine each convergence programme based on assessments prepared by the Commission and the Committee set up by Article 114 of the Treaty (the Economic and Financial Committee). On the basis of a recommendation from the Commission and after consulting the Economic and Financial Committee, the Council is required to deliver an opinion, following its examination of the programme. According to the Regulation, Member States need to submit annual updates of their convergence programmes, which may also be examined by the Council in accordance with these same procedures.The ten countries that joined the EU on 1 May 2004 do not participate in the single currency. They committed themselves to submitting their convergence programmes by 15 May 2004 and a first update thereof towards the end of 2004.The first convergence programme of Latvia, covering the period 2004-2007, was submitted on 14 May 2004 and assessed by the Council on 5 July 2004. Latvia submitted an update of its convergence programme on 30 December 2004. The Commission services have carried out a technical evaluation of this update, taking into account the results of the Commission services autumn 2004 economic forecasts, and having regard to the code of conduct[2], the commonly agreed methodology for the estimation of potential output, the recommendations in the broad economic policy guidelines for the period 2003-2005 and the principles laid down in the Communication from the Commission to the Council and the European Parliament of 27 November 2002 on strengthening the coordination of budgetary policies[3]. This evaluation warrants the following assessment:-  The first update of the Latvian convergence programme, covering the period 2004-2007, was adopted by the Latvian Cabinet of Ministers on 28 December and submitted to the Commission on 30 December 2004. The programme is based on the economic projections in the 2005 budget law presented to the Parliament on 13 December 2004 and adopted by the Parliament on 20 December. The updated programme broadly complies with the data requirements of the “code of conduct on the content and format of stability and convergence programmes”. However, the ESA95 classification of data on the composition of the general government revenue and expenditure needs to be improved.-  In the update, GDP growth of 8.1% is estimated for 2004 and 6.7% foreseen for 2005, with domestic demand, in particular investment and private consumption, continues to expand vigorously. For 2006 and 2007, GDP growth is set only slightly lower (6.5% in both years). Export growth has picked up strongly, reflecting global economic recovery and a positive impact from Latvia’s accession to the EU; nevertheless, this has been outpaced by the growth of imports accompanying the surge in domestic demand. The growth contribution of net exports in the immediate term is set to be negative and the wide current account deficit to narrow only marginally. Unemployment is projected to fall only gradually despite the strong growth of economic activity. Overall, on the basis of currently available information, the macroeconomic scenario seems plausible and is broadly in line with the Commission services’ evaluation including the autumn 2004 forecast.-  To achieve the Bank of Latvia’s price stability objective, from 1994 the currency (lats) was pegged to the SDR, with a normal fluctuation band around the central rate of ±1%. The Latvian authorities plan to join ERM II in early 2005 and aim for euro adoption at the earliest on 1 January 2008. On 1 January 2005, as a step in this strategy, the lats was re-pegged at market rates from the SDR to the euro, with a normal fluctuation band around the new central rate also of ±1%. Local currency interbank rates have fallen closer towards euro area levels following the re-pegging. The long-term bond yield vis-à-vis the euro area fluctuated during 2004 in the range of a premium of ½-1 percentage point. Up until 2003 HICP inflation was relatively low. In the course of 2004, however, HICP inflation accelerated substantially, peaking at 7.8% in August before easing slightly during the final quarter and averaging 6.2% for the year. The authorities consider inflation developments in 2004 to have been of a temporary nature; they expect CPI inflation to decline from 6.2% in 2004 to 3.0% in 2006.In 2005 inflation will continue to be influenced by increasing administratively regulated prices and indirect tax rate harmonisation measures. Nevertheless, due to favourable base effects, and provided that overheating is avoided, inflation should decrease gradually, though with the likelihood of slightly higher inflation than foreseen by the national authorities.-  The programme update aims at keeping the deficit below the 3% of GDP reference value in each programme year, with the general government budget deficit gradually falling from a programme estimate of 1.7% of GDP in 2004[4] to 1.4% of GDP in 2007. Reflecting the impact of EU transfers and associated spending, both expenditure and revenues are projected to peak in 2005, at 39.3% and 37.7% of GDP respectively, and thereafter gradually to decline to 36.5% and 35.1% of GDP respectively by 2007. The medium-term adjustment in public finances is based on a reduction of both the revenue and the expenditure ratios. The primary balance improves over the programme period, with the total expenditure ratio falling due to a decreased primary expenditure ratio and to some extent interest payments. The primary expenditure ratio falls mainly as a result of lower ratios of transfers and subsidies while at the same time allowing for an increase in the investment ratio. The revenue ratio falls as a consequence of tax reductions, mainly on income, lowering the tax burden moderately. While the overall strategy remained unaltered as compared with the May 2004 programme, the projected budget deficits have been revised downwards from around 2% of GDP each year in the former programme.-  The risks to the budgetary projections in the programme appear broadly balanced. On the one hand, assumptions about the tax intensity of economic activity seem somewhat pessimistic, suggesting that revenues could be better than expected. Indeed, Latvia has established a track record of cautious forecasting, with repeated overshooting of fiscal targets over the past few years. Furthermore, as regards budgetary control, a special procedure exists which could facilitate relatively rapid in-year adjustment in the event of budgetary developments going off-track On the other hand, given the commitment of expenditures predicated on support from EU funding, the achievement of the deficit targets is conditional on the receipt of such funds in government revenues. Tight expenditure discipline (including in managing partly EU-funded projects) might be difficult given weaknesses in administrative capacity.-  In the light of this risk assessment, the budgetary stance in the programme is insufficient to achieve the close-to-balance-or-surplus medium-term objective of the Stability and Growth Pact within the programme period. Furthermore, even though the programme outlines a relatively ambitious consolidation path, it may provide insufficient margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations. However, it is sufficient to maintain the debt-to-GDP ratio at a very low level.-  The debt ratio is estimated at 14.2% of GDP in 2004, clearly well below the 60% of GDP Treaty reference value. The slight increase in the debt ratio over the programme period, to 15.0% of GDP in 2007, mainly results from persisting deficits, substantially offset by nominal GDP growth.-  The programme briefly reviews the government’s structural reform programme which focuses on measures to improve the business environment, competitiveness and development of energy and communication sectors, the education and healthcare systems, on active labour market policies as well as the promotion of innovation and research. The programme also outlines measures to strengthen further the budget process through a multi-annual budgeting framework, and to increase the transparency and reliability of the nominal expenditure ceilings through systematic evaluation mechanisms. The reforms, most of which are already underway or concerning which legislation is being prepared, can reasonably be expected to improve the growth conditions of the Latvian economy: by raising productivity and strengthening incentives to work, facilitating job creation and discouraging tax evasion, as well as improving fiscal discipline both with line ministries and at local government level.-  Latvia appears to be in a relatively favourable position with regard to long-term sustainability of the public finances, despite the projected budgetary costs of an ageing population. The relatively low debt ratio in Latvia, the pension reform measures enacted, including the introduction of the funded pillar, and the accumulation of assets in the funded pension scheme will contribute to limit the budgetary impact of ageing. The strategy outlined in the programme is based on a contained budgetary deficit over the medium term and the budgetary impact of the pension reform. Reforms in the field of health and long-term care could, however, involve higher expenditures. A risk to sustainability may emerge in the long run. Latvia’s relatively low tax ratio should, however, ease the accommodation of any such sustainability gap that may arise.-  Overall, the economic policies outlined in the update are broadly consistent with the country-specific broad economic policy guidelines (BEPGs) in the area of public finances. Under the challenge to address the sizable current account deficit, Latvia was recommended to reduce the general government deficit in a credible and sustainable way within a multi-annual framework. In the light of the narrowing current account deficit foreseen in the programme, the lower than previously budgeted deficit in 2004 and the consolidation path foreseen in the update are in line with the recommendation in the BEPGs. However, this assessment is conditional on the favourable development of the external balance and is thus subject to further monitoring. Furthermore, as was pointed out in the Council Opinion on the programme of last May, assessment of the appropriate fiscal position is also dependent on demand pressures in the economy, even if it is difficult to determine the country’s position in the business cycle; the assessment is also therefore conditional on macroeconomic policy being appropriate to consolidating the moderation in inflation from its recent peak.***Based on this assessment, the Commission has adopted the attached recommendation for a Council Opinion on the updated convergence programme of Latvia and is forwarding it to the Council.Recommendation for aCOUNCIL OPINIONin accordance with the third paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated convergence programme of Latvia, 2004-2007THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community,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[5], and in particular Article 9(3) thereof,Having regard to the recommendation of the Commission,After consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:On [8 March 2005] the Council examined the updated convergence programme of Latvia, which covers the period 2004 to 2007. The programme broadly complies with the data requirements of the revised “code of conduct on the content and format of stability and convergence programmes”. However, the ESA95 classification of data on the composition of the general government revenue and expenditure needs to be improved. Accordingly, Latvia is invited to achieve compliance with the requirements of the code of conduct.The macroeconomic scenario underlying the programme envisages real GDP growth, estimated at 8.1% in 2004, remaining strong over the rest of the programme period, averaging 6.6% per year. On the basis of currently available information, this scenario seems to reflect plausible growth assumptions. The programme’s projections for inflation appear slightly on the low side.The programme update aims at keeping the deficit below the 3% of GDP reference value in each programme year with the general government budget deficit gradually falling from an estimated 1.7% of GDP in 2004 to 1.4% of GDP in 2007. In 2005 both revenue and expenditure ratios increase sharply, linked to EU accession. Thereafter, the medium-term adjustment in public finances is based on a reduction of both the revenue and the expenditure ratios. The primary expenditure ratio falls mainly through lower ratios of transfers and subsidies while at the same time allowing for an increase in the investment ratio. The revenue ratio falls through tax reductions, mainly on income, lowering the tax burden moderately.The risks to the budgetary projections in the programme appear broadly balanced. On the one hand, assumptions about the tax intensity of economic activity seem somewhat pessimistic, suggesting that revenues could be better than expected. On the other hand, given the commitment of expenditures predicated on EU funding, the achievement of the deficit targets is conditional on the receipt of such funds in government revenues. Tight expenditure discipline (including in managing partly EU-funded projects) might be difficult given weaknesses in administrative capacity.In view of this risk assessment, the budgetary stance in the programme is insufficient to achieve the close to balance or surplus medium-term objective of the Stability and Growth Pact within the programme period. Furthermore, it may provide insufficient margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations. However, it is sufficient to maintain the debt-to-GDP ratio at a very low level.The debt ratio is estimated at 14.2% of GDP in 2004, well below the 60% of GDP Treaty reference value. The slight increase in the debt ratio over the programme period, to 15.0% of GDP in 2007, mainly results from persisting deficits, substantially offset by nominal GDP growth.The budgetary strategy outlined in the programme puts Latvia in a relatively favourable position with regard to long-term sustainability of the public finances, despite the projected budgetary costs of an ageing population. The relatively low debt ratio, the pension reform measures enacted, including the introduction of the funded pillar, and the accumulation of assets in the funded pension scheme will contribute to limit the budgetary impact of ageing. The strategy outlined in the programme is based on a contained budgetary deficit over the medium term and on the budgetary impact of the pension reform. Reforms in the field of health and long-term care could, however, involve higher expenditures. A risk to sustainability may emerge in the long run. Latvia’s relatively low tax ratio should, however, ease the accommodation of any such sustainability gap that may arise.The economic policies outlined in the programme are broadly consistent with the country-specific broad economic policy guidelines (BEPGs) in the area of public finances. Under the challenge to address the sizable current account deficit, Latvia was recommended to reduce the general government deficit in a credible and sustainable way within a multi-annual framework. In the light of the narrowing current account deficit foreseen in the programme, the lower-than-projected budget deficit in 2004 and the consolidation path foreseen in the update are in line with the recommendation of the BEPGs. However, this assessment is conditional on the favourable development of the external balance and is thus subject to further monitoring. Furthermore, as was pointed out in the Council Opinion on the programme of last May, assessment of the appropriate fiscal position is also dependent on demand pressures in the economy, even if it is difficult to determine the country’s position in the business cycle; the assessment is also therefore conditional on macroeconomic policy being appropriate to consolidating the moderation in inflation from its recent peak.Comparison of key macroeconomic and budgetary projections2004 | 2005 | 2006 | 2007 |Real GDP (% change) | CP Dec 2004 | 8.1 | 6.7 | 6.5 | 6.5 |COM Oct 2004 | 7.5 | 6.7 | 6.7 | n.a. |CP May 2004 | 6.7 | 6.7 | 6.5 | 6.5 |CPI inflation1 (%) | CP Dec 2004 | 6.2 | 4.3 | 3.0 | 3.0 |COM Oct 2004 | 6.8 | 4.7 | 3.5 | n.a. |CP May 2004 | 4.5 | 3.7 | 3.0 | 3.0 |General government balance (% of GDP) | CP Dec 2004 | -1.7 | -1.6 | -1.5 | -1.4 |COM Oct 2004 | -2.0 | -2.8 | -2.9 | n.a. |CP May 2004 | -2.1 | -2.2 | -2.0 | -2.0 |Primary balance (% of GDP) | CP Dec 2004 | -0.9 | -0.9 | -0.8 | -0.7 |COM Oct 2004 | -1.2 | -2.0 | -2.0 | n.a. |CP May 2004 | -1.2 | -1.3 | -1.2 | -1.2 |Government gross debt (% of GDP) | CP Dec 2004 | 14.2 | 14.5 | 14.8 | 15.0 |COM Oct 2004 | 14.6 | 15.4 | 16.6 | n.a. |CP May 2004 | 16.2 | 16.8 | 17.3 | 17.7 |Note: 1 The programme presents only CPI inflation projections and not HICP. 2 Commission services calculations on the basis of the information in the programme. Sources: Convergence programme (CP); Commission services autumn 2004 economic forecasts (COM); Commission services calculations. |[1] OJ L 209, 2.8.1997. All the documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm.[2] Revised Opinion of the Economic and Financial Committee on the content and format of stability and convergence programmes, endorsed by the ECOFIN Council on 10.7.2001.[3] COM(2002) 668, 27.11.2002.[4] More recent information for central government cash accounts suggests a lower estimate of the general government budget deficit.[5] OJ L 209, 2.8.1997, p. 1. The documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm.


European Parliament recommendation of 19 June 2007 based on the report of the Committee of Inquiry into the crisis of the Equitable Life Assurance Society


title: Council Recommendation of 14 July 2015 on the 2015 National Reform Programme of Estonia and delivering a Council opinion on the 2015 Stability Programme of Estonia

text:
               18.8.2015

               EN

               Official Journal of the European Union

               C 272/39

         COUNCIL RECOMMENDATION
   of 14 July 2015
   on the 2015 National Reform Programme of Estonia and delivering a Council opinion on the 2015 Stability Programme of Estonia
   (2015/C 272/11)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

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

               (2)

               On 14 July 2015, the Council, on the basis of the Commission's proposals, adopted a Recommendation on the broad guidelines for the economic policies of the Member States and the Union and, on 21 October 2010, it adopted a decision on guidelines for the employment policies of the Member States (2). Together these form the ‘integrated guidelines’ which Member States were invited to take into account in their national economic and employment policies.

               (3)

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

               (4)

               On 28 November 2014, the Commission adopted the Annual Growth Survey, marking the start of the 2015 European Semester for economic policy coordination. On the same day, on the basis of Regulation (EU) No 1176/2011 of the European Parliament and of the Council (5), the Commission adopted the Alert Mechanism Report, in which Estonia was not identified as one of the Member States for which an in-depth review would be carried out.

               (5)

               On 18 December 2014, the European Council endorsed the priorities for fostering investment, intensifying structural reforms and pursuing responsible growth-friendly fiscal consolidation.

               (6)

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

               (7)

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

               (8)

               Estonia is currently in the preventive arm of the Stability and Growth Pact. The incoming Government did not submit a Stability Programme by the deadline. Based on the Commission's 2015 spring forecast, the headline surplus recorded in 2014 is projected to turn into a deficit of 0,2 % of GDP in 2015 and 0,1 % of GDP in 2016. The government debt ratio is forecast to gradually decline from 10,6 % of GDP in 2014 to below 10 % of GDP in 2016. Based on the Commission's 2015 spring forecast, there is a risk of some deviation from the medium-term objective in 2015 since the structural balance is projected to deviate from the medium-term objective by 0,4 % of GDP. The deviation is set to become significant in 2016 when an improvement by 0,4 % of GDP is required but the structural balance is projected to worsen by 0,3 % of GDP. Therefore, further measures will be needed in 2015 and 2016. Based on its assessment and taking into account the Commission's 2015 spring forecast, the Council is of the opinion that there is a risk that Estonia will not comply with the provisions of the Stability and Growth Pact.

               (9)

               Estonia's employment rate reached 74,5 % of the working-age population in the third quarter of 2014 and the unemployment rate dropped to 7,6 %, the lowest level since 2009. The proportion of long-term unemployed is well below the EU average. However, the shrinking labour force, combined with low labour productivity, is becoming a medium-to-long-term challenge. Implementation of the ambitious Work Capacity Reform has started only recently. While a number of tax-related measures have been adopted to increase labour market participation, they do not specifically target low-income earners. The gender pay gap is one of the widest in the Union. A lack of childcare facilities makes it more difficult for young parents, in particular mothers, to return to the labour market. The proportion of students in work-based apprenticeships is also low. There is a shortage of graduates in technology and science subjects. The quality of local authority social services is uneven.

               (10)

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

               (11)

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

               (12)

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

               (13)

               In the context of the European Semester the Commission has also carried out an analysis of the economic policy of the euro area as a whole. On the basis of this analysis, the Council has issued specific recommendations addressed to the Member States whose currency is the euro (7). As a country whose currency is the euro, Estonia should also ensure the full and timely implementation of those recommendations,

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

               1.

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

               2.

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

               3.

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

      Done at Brussels, 14 July 2015.

            For the Council

            The President

         P. GRAMEGNA

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Maintained by Council Decision 2014/322/EU of 6 May 2014 on guidelines for the employment policies of the Member States for 2014 (OJ L 165, 4.6.2014, p. 49).

      (3)  Council Recommendation of 8 July 2014 on the National Reform Programme 2014 of Estonia and delivering a Council opinion on the Stability Programme of Estonia, 2014 (OJ C 247, 29.7.2014, p. 25).

      (4)  Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area (OJ L 140, 27.5.2013, p. 11).

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

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

      (7)  OJ C 272, 18.8.2015, p. 98.


Avis juridique important

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31977H0355

77/355/EEC: Commission Recommendation of 6 May 1977 addressed to the Government of the Federal Republic of Germany concerning a law and an order implementing certain provisions of Council Directive 74/561/EEC of 12 November 1974 on admission to the occupation of road haulage operator in national and international transport operations

Official Journal L 123 , 17/05/1977 P. 0022 - 0023

COMMISSION RECOMMENDATION of 6 May 1977 addressed to the Government of the Federal Republic of Germany concerning a law and an order implementing certain provisions of Council Directive 74/561/EEC of 12 November 1974 on admission to the occupation of road haulage operator in national and international transport operations (77/355/EEC) By letter of 25 November 1976, the Office of the Permanent Representative of the Federal Republic of Germany to the European Communities sent to the Commission, for consultation, copies of certain provisions of the law on road haulage (GüKG) of 6 August 1975 and of the second order of 24 April 1973 on the recognition of professional competence and of the knowledge required to manage a road haulage undertaking. These provisions include certain measures relating to the application of the Council Directive of 12 November 1974 on admission to the occupation of road haulage operator in national and international transport operations (1).  The provisions were submitted in pursuance of Article 7 (1) of the Directive, under which "Member States shall, after consulting the Commission and before 1 January 1977, adopt the measures necessary for the implementation of this Directive, in particular Article 3 (4) thereof".  The Commission notes with regret that, owing to the delay in submitting details of its implementing measures, the German Government was unable to fulfil by the due date its obligation under the said Article 7 and has made it impossible for the Commission to adopt this recommendation within the proper time.  The Commission makes the following recommendations regarding the provisions of the above law and implementing order:    1. As regards the field of application of these provisions, the Commission would remind the German Government that the Directive of 12 November 1974 is designed to introduce common rules on admission to the occupation of road haulage operator in both national and international transport operations.  In view of the fact that the provisions submitted to the Commission apply only to national transport, the German Government is asked to make good this deficiency.       2. The Commission notes that Article 10 of the law, which relates to long-distance haulage and Article 81, which deals with short-distance haulage, lay down the principle, in accordance with Article 3 (1) of the Directive, that admission to the occupation is to be subject to requirements as to good repute, financial standing and professional competence.  However, as regards financial standing, the Commission recommends that the German Government clarify the wording of the first sentence of Article 3 (3), which at present reads as follows:  "Financial standing means the possession of the financial resources necessary for the commencement and proper operation of the business ...".  Similarly, the Commission would draw the German Government's attention to certain rules regarding the implementation of the condition as to professional competence, as set out in Article 3 (4) of the Directive.  First, that Article provides that the necessary knowledge for the recognition of professional competence shall be acquired by attendance at courses, by practical experience in a transport undertaking or by a combination of both. This is an exhaustive list and therefore excludes the adoption of any other method. Consequently, the German Government is asked to amend Article 10 (2) of the law and Article I (1) of the implementing order accordingly and to delete the reference to practical experience acquired in a transport agency or a warehousing undertaking.  Secondly, the second subparagraph of Article 3 (4) of the Directive provides that a certificate issued by the responsible authority or body must be produced as proof of professional competence. However, the implementing order, in its Article 3, expressly provides for the issue of a certificate only in the case of recognition of professional competence by examination and not when it is recognized on the basis of practical experience. The German Government is accordingly asked to amend the order on this point.  (1) OJ No L 308, 19.11.1974, p. 18.       3. In the same connection, it is noted that the German Government intends to send to the responsible examining boards the list of subjects mentioned in Article 3 (4) of the Directive.  The Commission feels that it should be made clear that the recognition of professional competence should be based on the subjects included on this list.       4. The Commission would also draw the attention of the German Government to the actual terms of Article 4 (1) of the Directive regarding the operation of an undertaking on a temporary basis in certain cases:  "Member States shall determine the circumstances in which a road haulage undertaking may, by way of derogation from Article 3 (1), be operated on a temporary basis for a maximum period of one year, with extension for a maximum period of six months, in duly justified special cases in the event of the death or physical or legal incapacity of the natural person engaged in the occupation of transport operator or of the natural person who satisfies the provision of Article 3 (1) (a) and (c)."  First, this Article refers to three cases : death, physical incapacity and legal incapacity. As Article 19 of the law refers only to the case of death, the German Government is asked to amend it so as to include physical or legal incapacity as provided for in Article 4 (1) of the Directive.  Secondly, Article 19 of the Law refers only to the death of the operator. Article 10 (1) of the law, however - in accordance with the second and third subparagraphs of Article 3 (1) of the Directive - states that the operator does not necessarily have to be the natural person engaged in the activity of road haulage operator or the natural person who satisfies the provisions of Article 3 (1) (a) and (c) of the Directive. The German Government is therefore asked to amend Article 19 of the law so as to include the two cases referred to in these two subparagraphs.       5. The Commission notes that Article 78 of the law (long distance haulage) and Article 88 (short distance haulage) lay down different conditions regarding the withdrawal of authorization, which is contrary to Article 6 (2) of the Directive.  Within the field covered by the Directive, Article 78, relating to long distance haulage, provides for mandatory withdrawal of an authorization only when bankruptcy proceedings are opened on the assets of the head of the firm, any failure to meet the conditions of professional competence and good repute being a matter for discretionary withdrawal.  On the other hand, under Article 88 (5) (short distance haulage) the only grounds for mandatory withdrawal of an authorization is a breach of the condition as to good repute.  Accordingly, the Commission recommends to the German Government that it amend Article 78 and 88 of the law on road haulage so as to make any breach of the conditions as to good repute, financial standing or professional competence a ground for the mandatory withdrawal of authorization, both for long distance and for short distance haulage.       6. Lastly, the Commission notes that the requirements under Article 6 (1) and (3) of the Directive, whereby (i) any decision refusing an application for admission to the occupation of road haulage operator must state the grounds on which it is based and (ii) persons affected by a decision refusing or withdrawing authorization must have appropriate means to defend their interests, are already covered under the provisions of law generally applicable in Germany.  Done in Brussels, 6 May 1977.  For the Commission  Richard BURKE  Member of the Commission


Avis juridique important

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31993H0165

93/165/EEC: Council recommendation of 15 March 1993 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (1989) (Seventh EDF) for the financial year 1991

Official Journal L 069 , 20/03/1993 P. 0041 - 0041

COUNCIL RECOMMENDATION of 15 March 1993  concerning the discharge to be given to the Commission in respect of the implementation of the  operations of the European Development Fund (1989) (Seventh EDF) for the financial year 1991(93/165/EEC)THE COUNCIL OF THE EUROPEAN COMMUNITIES. Having regard to the Treaty establishing the European Economic Community, and in particular Article  206b thereof, Having regard to the Fourth ACP-EEC Convention, signed at Lomé on 15 December 1989, Having regard to Council Decision 91/482/EEC of 25 July 1991 on the association of the overseas  countries and territories with the European Economic Community  (1), Having regard to the Internal Agreement on the financing and administration of Community aid  (2),  signed in Brussels on 16 July 1990, and in particular Article 33 (3) thereof, Having regard to the Financial Regulation of 29 July 1991 applicable to the Seventh European  Development Fund  (3), and in particular Articles 69 to 77 thereof, Having examined the revenue and expenditure account and the balance sheet relating to the  operations of the European Development Fund (1989) (Seventh EDF) as at 31 December 1991 and the  Court of Auditors' report relating to the financial year 1991 together with the Commission's  replies  (4), Whereas, pursuant to Article 33 (3) of the Internal Agreement, the discharge for the management of  the European Development Fund (1989) (Seventh EDF) must be given to the Commission by the European  Parliament on a recommendation from the Council; Whereas the overall implementation by the Commission of the operations of the European Development  Fund (1989) (Seventh EDF) during the financial year 1991 has been satisfactory, HEREBY RECOMMENDS that the European Parliament give the Commission a discharge in respect of the  implementation of the operations of the European Development Fund (1989) (Seventh EDF) for the  financial year 1991. Done at Brussels, 15 March 1993. For the Council The President M. JELVED