               EUROPEAN COMMISSION
            Brussels, 25.9.2020
            COM(2020) 582 final
            Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations on behalf of the European Union for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement with the Government of  the Republic of Liberia
            {SWD(2020) 196 final} - {SWD(2020) 197 final}

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE PROPOSAL

               •Reasons for and objectives of the proposal

                  The Commission proposes to negotiate a new protocol that meets the actual possibilities and needs of the Member States fleet and is in line with Regulation (EU) No 1380/2013 on the Common Fisheries Policy and the 19 March 2012 Council Conclusions on a Communication from the Commission on the External dimension of the Common Fisheries Policy.

               •Consistency with existing policy provisions in the policy area

                  The European Union and the Government of the Republic of Liberia have concluded a Sustainable Fisheries Partnership Agreement
                     1
                    effective from 9 December 2015
                     2
                   . Its implementing protocol will expire on 8 December 2020. This Protocol fixes the fishing opportunities provided to the Union fleet and the corresponding financial contribution paid by the Union and the ship-owners.

                  The Protocol provides for EUR 357 500 for the first year, EUR 325 000 for the second, third and fourth year, and of EUR 292 500 for the fifth year, from the EU budget as financial compensation for access for a reference tonnage of 6 500 t/year. In addition, EU ship-owners pay authorisation fees based on prices set in the Protocol for the quota allocated. On top of that, EUR 1 625 000 are also provided from the EU budget to support the Republic of Liberia sectoral fisheries policy for the five-year duration of the Protocol.

               The SFPA with the Republic of Liberia provides fishing opportunities targeting tuna and highly migratory species for EU vessels from two Member States (Spain and France). The SFPA with the Republic of Liberia  is part of a well developed network of bilateral SFPAs in western and central Africa, namely with Morocco, Mauritania, Senegal, Cabo Verde, The Gambia, Côte d’Ivoire and São Tomé and Principe.

               SFPAs contribute to promote the objectives of the CFP internationally, ensuring that Union fishing activities outside Union waters are based on the same principles and standards as those applicable under Union law. In addition, SFPAs foster scientific cooperation between the EU and its partners, promote transparency and sustainability for a better management of fishing resources. SFPAs encourage governance by supporting monitoring, control and surveillance of national and foreign fleets' activities and providing funding to fight against illegal, unreported and unregulated (IUU) fishing, and contribute to the sustainable development of local fishing sector.

               SFPAs strengthen the European Union’s position as a member of the International Commission for the Conservation of Atlantic Tunas (ICCAT), the body set up under international law for conserving and managing highly migratory species in the region.

                  •
                        Consistency with other Union policies

                  The negotiation of a new protocol  with the Republic of Liberia is in line with the EU’s external action towards African, Caribbean and Pacific (ACP) countries, and in particular with the Union objectives regarding the respect of democratic principles, human rights.

               2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

               •Legal basis

                  The legal basis for the decision is provided by Article 218(3) and (4) of the Treaty on the Functioning of the European Union (TFEU), in Part Five on the Union’s external action, Title V on international agreements, which sets out the procedure for negotiating and concluding agreements between the EU and third countries.

               •Subsidiarity (for non-exclusive competence)

                  Not applicable, exclusive competence.

               •Proportionality

                  The decision is proportional to the objective.

               •Choice of the instrument

                  The instrument is provided for under Article 218(3) and Article 218(4) of the TFEU.

               3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

               •Ex-post evaluations/fitness checks of existing legislation

                  The Commission carried out in 2019-2020 an ex-post evaluation of the current protocol to the SFPA EU/Liberia as well as an ex-ante evaluation of a possible renewal of the protocol. The conclusions of the evaluation are set out in a separate Staff Working Document
                     3
                   .

                  The evaluation concluded that the EU fishing industry (tuna species) is firmly interested in operating in Liberia’s fishing zone and that the renewal of the Protocol clearly appears as the preferred option. A non-renewal would deprive the EU of an instrument capable of responding to the needs of the various stakeholders, and to its own needs in terms of strengthening the global governance of the oceans in the Eastern Atlantic Ocean through the ICCAT multilateral framework.

                  For Liberia, the EU intervention adds value in terms of a multiannual certainty of budget income, an official platform for sectoral dialogue and direct exchanges with the EU, in terms of cooperation and a framework for joint monitoring and control of EU activities. The SFPA contribute to the promotion of responsible fishing practices, and gives access to a dedicated budget line (sectoral support) for financial support to implementation of national fisheries policy by Liberia.

               •Stakeholder consultations

                  Member States, industry representatives, international civil society organisations, as well as Liberia’s fisheries administration and civil society, have been consulted as part of the evaluation. Consultations have also taken place in the framework of the Long Distance Advisory Council.

               •Collection and use of expertise

                  Not applicable.

               •Impact assessment

                  Not applicable.

               •Regulatory fitness and simplification

                  Not applicable.

               •Fundamental rights

                  A clause on the consequences of violations of human rights and democratic principles is included in the Sustainable Fisheries Partnership Agreement.

               4.BUDGETARY IMPLICATIONS

                  The budgetary implications connected with the new Protocol include the payment of a financial contribution to Liberia, which is compatible with the current Multiannual Financial Framework (MFF), in particular as regards allocations to the budget line
                     4
                   for Sustainable Fisheries Partnership Agreements. The annual amounts for commitments and payments are established in the yearly budgetary procedure, including the reserve line for proposals not entered into force at the beginning of the year.

               5.OTHER ELEMENTS

               •Implementation plans and monitoring, evaluation and reporting arrangements

               On 23 May 2017, the Republic of Liberia was notified of the possibility of being identified as a non-cooperating third country in fighting illegal, unreported and unregulated fishing by Commission Decision 2017/C 169/12
                  5
                under Council Regulation (EC) No 1005/2008 of 29 September 2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing. Negotiations for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement between the European Union and the Government of the Republic of Liberia will only start once Commission Decision 2017/C 169/12 is reversed.

               •Detailed explanation of the specific provisions of the proposal

                  The Commission recommends that:

                  - The Council should authorise the Commission to open and conduct negotiations for the conclusion of a new protocol to the Sustainable Fisheries Partnership Agreement with the Government of the Republic of Liberia;

                  - The Commission should be nominated as the EU negotiator on this subject;

                  - The Commission should conduct the negotiations in consultation with the special committee, as set out in the Treaty on the Functioning of the European Union;

                  - The Council should approve the negotiating directives annexed to this recommendation.

               Recommendation for a

               COUNCIL DECISION

               authorising the opening of negotiations on behalf of the European Union  for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement with the Government of  the Republic of Liberia

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 218(3) and (4) thereof,

               Having regard to the recommendation from the European Commission,

               Whereas:

               (1)Negotiations should be opened with a view to concluding a new protocol to the Sustainable Fisheries Partnership Agreement between the European Union and the Government of the Republic of Liberia
                  6
               .

               (2)On 23 May 2017, the Republic of Liberia was notified of the possibility of being identified as a non-cooperating third country in fighting illegal, unreported and unregulated fishing by Commission Decision 2017/C 169/12 under Council Regulation (EC) No 1005/2008 of 29 September 2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing. Negotiations for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement between the European Union and the Government of the Republic of Liberia will only start once Commission Decision 2017/C 169/12
                  7
               , is reversed,

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to negotiate on behalf of the Union a new protocol to the Sustainable Fisheries Partnership Agreement with the Government of the Republic of Liberia.

               These negotiations shall be opened by the Commission after reversal of Decision 2017/C 169/12.

               Article 2

               The negotiating directives are set out in the Annex.

               Article 3

               The negotiations shall be conducted in consultation with the Council Working Party on External Fisheries Policy.

               Article 4

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 177 of 1.7.2016

                     (2)

                        OJ L 328, 12.12.2015, p. 3–43

                     (3)

                        SWD(2020)196

                     (4)

                        Cf. Chapter 40 (reserve line 40 02 41) in line with the MFF inter-institutional agreement (2013/C 373/01).

                     (5)

                        (2017/C 169/12), OJ 169/11, 30.5.2017, p. 11–16

                     (6)

                        Sustainable Fisheries Partnership Agreement between the European Union and the Republic of Liberia(OJ L 328, 12.12.2015, p. 3)

                     (7)

                        Commission Decision 2017/C  169/12 of 23 May 2017 notifying the Republic of Liberia of the possibility of being identified as a non-cooperating third country in fighting illegal, unreported and unregulated fishing  ( OJ C 169, 30.5.2017,p.11)

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 25.9.2020
            COM(2020) 582 final
            ANNEX
            to the Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations on behalf of the European Union for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement with the Government of the Republic of Liberia
            {SWD(2020) 196 final} - {SWD(2020) 197 final}

               ANNEX

               Directives for the negotiation of new protocol to the Sustainable Fisheries Partnership Agreement between the European Union and the Government of Liberia

               The objective of the negotiations is the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement between the European Union and the Government of the Republic of Liberia, in line with Regulation (EU) No 1380/2013 of the European Parliament and of the Council
                  1
                and with the Council Conclusions of 19 March 2012
                  2
                on the Commission Communication of 13 July 2011 on the external dimension of the Common Fisheries Policy
                  3
               .

               With a view to ensuring, through this new Protocol, the promotion of sustainable and responsible fishing, the Commission's negotiation objectives shall be based on the following:

               ·Ensure access to the fishing zone of the Republic of Liberia and the necessary authorisations for vessels of the Union fleet to carry out fishing activities in that zone;

               ·Duly take into account the best available scientific advice and relevant management plans adopted by Regional Fisheries Management Organisations (RFMO), in order to ensure and enhance the environmental sustainability of fishing activities, directed exclusively at available surplus resources, taking into account the local fleet's fishing capacity, while paying special attention to the shared nature of the stocks concerned;

               ·Seek an appropriate share of the fisheries resources, commensurate with the Union fleets' interests, when they also interest other foreign fleets;

               ·Ensure that access to fisheries is based on the historical and the expected future activity of the Union fleet in the region, in the light of the most updated and best available scientific assessments;

               ·Continue dialogue in order to reinforce sectoral policy with a view to encouraging the implementation of a responsible fisheries policy that is environmentally and socially responsible, in connection with the country's development objectives - in particular as regards the governance, follow-up, control and monitoring of fishing activities and scientific advice - and taking into account the livelihood and interests of local fishing communities;

               ·Include a clause on the consequences of violations of human rights,  fundamental labour rights and democratic principles;

               In particular, the Protocol should define:

               –the fishing opportunities, by category, to be granted to Union vessels,

               –the financial compensation and the conditions for its payment, and

               –the mechanisms for implementing sectoral support.

               On 23 May 2017, the Republic of Liberia was notified of the possibility of being identified as a non-cooperating third country in fighting illegal, unreported and unregulated fishing by Commission Decision 2017/C 169/12
                  4
                under Council Regulation (EC) No 1005/2008 of 29 September 2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing. Negotiations for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement between the European Union and the Government of the Republic of Liberia, in line with Regulation (EU) No 1380/2013 will only start once Commission Decision 2017/C 169/12 is reversed.

                     (1)

                        Regulation (EU) No 1380/2013 of the European Parliament and of the Council of 11 December 2013 on the Common Fisheries Policy, amending Council Regulations (EC) No 1954/2003 and (EC) No 1224/2009 and repealing Council Regulations (EC) No 2371/2002 and (EC) No 639/2004 and Council Decision 2004/585/EC (OJ L 354, 28.12.2013, p. 22).

                     (2)

                        https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/agricult/129052.pdf

                     (3)

                        Communication from the commission to the European parliament, the council, the European economic and social committee and the committee of the regions Reform of the Common Fisheries Policy /* COM/2011/0417 final */

                     (4)

                        (2017/C 169/12), OJ 169/11, 30.5.2017, p. 11–16


               EUROPEAN COMMISSION
            Brussels, 25.1.2021
            COM(2020) 697 final/2
            COM(2020) 697 final of 12.11.2020 downgraded on 25.1.2021
            Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations on an agreement between the European Union and Mongolia on geographical indications

               EXPLANATORY MEMORANDUM

               The Commission proposes to negotiate a bilateral agreement on geographical indications between the European Union (EU) and Mongolia.

               1.CONTEXT OF THE RECOMMENDATION

               •Reasons for and objectives of the proposal

               The protection of EU geographical indications at international level is a key element of the EU trade policy. The EU negotiates to protect EU geographical indications through either trade agreements or specific ‘standalone’ agreements.

               The EU, its Member States and Mongolia are signatories to the Framework Agreement on Partnership and Cooperation (PCA), which entered into force on 1 November 2017. Article 27(1) of the PCA dealing with Intellectual property protection states that Parties agree to conclude as soon as possible a bilateral Agreement on Geographical Indications.

               Geographical indications are known and well-established in Mongolia, where 20 geographical indications are currently registered at national level through a specific law. The country’s reputation for traditional products is an opportunity to derive substantial economic benefits from the use of geographical indications.

               This initiative implements the obligation to conclude a bilateral agreement on geographical indications set out in the EU-Mongolia Partnership and Cooperation Agreement.

               •Consistency with existing policy provisions in the policy area

               The conclusion of the Agreement on Geographical Indications (GIs) with Mongolia fits into the overall EU strategy of promoting the EU GI policy. The initiative aims to provide a high level of direct protection to short lists of EU geographical indications in Mongolia and Mongolian geographical indications in the EU. The initiative will give producers of products bearing geographical indications a competitive advantage. In particular, small producers in Mongolia will gain better access to the very large EU market. The EU has exclusive competence related to geographical indications in protecting at EU-wide level agricultural products, such as foodstuffs, aromatised wines, wines and spirits, however there is currently no EU-wide system of protection for non-agricultural geographical indications.

               •Consistency with other Union policies

                  The negotiation of a bilateral agreement on geographical indications with Mongolia is in line with the EU’s external actions and in particular with the Union objectives regarding the EU strategy of promoting the GI policy.

               2.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

               •
                     Ex-post evaluations/fitness checks of existing legislation

                  Not applicable.

               •
                     Stakeholder consultations

                  Not applicable.

               •
                     Collection and use of expertise

                  Not applicable.

               •
                     Impact assessment

                  No impact assessment has been carried out for the initiative, as there are no alternative policy options. Notwithstanding the possibility that Mongolia could join in the future the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications, to which the EU is member, currently the most suitable policy option to reach the objective and implement the PCA is an agreement between the EU and Mongolia on Geographical Indications. The Roadmap on the “EU-Mongolia agreement on geographical indications” was published on 11 June 2019
                     1
                  .

               •
                     Regulatory fitness and simplification

                  Not applicable.

               •
                     Fundamental rights

                  Not applicable.

               3.LEGAL ELEMENTS OF THE RECOMMENDATION

               •Legal basis

                  This initiative falls under the exclusive competence of the EU under Article 207(1) of the Treaty on the Functioning of the European Union (TFEU), as it is part of the common commercial policy, which relates inter alia to ‘the commercial aspects of intellectual property’, which include geographical indications.

               •Subsidiarity (for non-exclusive competence)

                  Not applicable, exclusive competence.

               •Proportionality

                  The decision is proportional to the objective.

               •Choice of the instrument

                  The instrument is provided for under Article 218 of the TFEU.

               4.BUDGETARY IMPLICATIONS

                  The Agreement will have no direct impact on the EU budget.

               5.OTHER ELEMENTS

               •Implementation plans and monitoring, evaluation and reporting arrangements

                  Negotiations are expected to open in the second quarter of 2021.

               •Explanatory documents (for directives)

                  Not applicable.

               •Detailed explanation of the specific provisions of the proposal

                  The Commission recommends that:

                  - The Council should authorise the Commission to open and conduct negotiations for a bilateral agreement on geographical indications between the European Union (EU) and Mongolia;

                  - The Commission should be nominated as the EU negotiator on this subject;

                  - The Council should approve the negotiating directives annexed to this recommendation.

               Recommendation for a

               COUNCIL DECISION

               authorising the opening of negotiations on an agreement between the European Union and Mongolia on geographical indications

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 218(3) and (4) thereof,

               Having regard to the recommendation from the European Commission,

               Whereas:

               (1)The European Union, its Member States and Mongolia are signatories to the Framework Agreement on Partnership and Cooperation
                  2
                (PCA), which entered into force on 1 November 2017.

               (2)Article 27(1) of the PCA provides that the Parties agree to conclude as soon as possible a bilateral Agreement on Geographical Indications, thus the conclusion of a bilateral agreement on geographical indications set out in the PCA is the implementation of that obligation,

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to negotiate, with Mongolia, on behalf of the Union, an international agreement on geographical indications.

               Article 2

               The negotiating directives are set out in the Annex.

               Article 3

               The negotiations shall be conducted in consultation with the [name of the special committee to be inserted by the Council].

               Article 4

               This Decision is addressed to the Commission.

               Done at Brussels, 25.1.2021

                     For the Council

                     The President

                     (1)

                  https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2019-3719410_en

                     (2)

                        Framework Agreement on Partnership and Cooperation between the European Union and its Member States, of the one part, and Mongolia, of the other part (OJ L 326, 9.12.2017, p. 7).

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 25.1.2021
            COM(2020) 697 final/2
            COM(2020) 697 final of 12.11.2020 downgraded on 25.1.2021
            ANNEX
            to the
            Recommendation for a COUNCIL DECISION
            authorising the opening of negotiations on an agreement between the European Union and Mongolia on geographical indications

               ANNEX

               DIRECTIVES FOR THE NEGOTIATION OF AN AGREEMENT BETWEEN the European Union and Mongolia on geographical indications

               A. NATURE AND SCOPE OF THE AGREEMENT

               The Agreement should exclusively contain provisions on geographical indications for agricultural products and foodstuffs, wines, spirits and aromatized wines.

               B. PROPOSED CONTENT OF THE AGREEMENT

               The Agreement should complement and build upon the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), going beyond current rules of the TRIPS aiming at ensuring a higher as well as adequate and effective level of protection and enforcement of geographical indications (GI) rights. The Agreement should seek to improve the effectiveness of enforcement of GI rights, including in the digital environment and at the border (including on exports).

               The Agreement should set up appropriate cooperation mechanisms between the Parties to support its implementation, as well as a regular dialogue on GIs to promote exchange of information on respective legislative progress, exchange of experience on enforcement and consultation in relation to third countries.

               The Agreement should provide direct protection and effective recognition through the agreement of a list of GIs (wines, spirits, agricultural products and foodstuffs), at a high level of protection building upon Article 23 of TRIPS, including against evocation, enhanced enforcement (including administrative measures), co-existence with bona fide prior trade marks, protection against subsequent genericness, and provisions on adding new GIs. Issues concerning individual prior rights, for example related to plant varieties, trade marks, generic or other legitimate prior uses, should be addressed with the aim of solving existing conflicts in a fair and satisfactory manner.

               All GIs listed in the Agreement should be effectively protected as of the date of entry into force of the Agreement.

               Institutional provision

               The Agreement should set up a Joint Committee to monitor the implementation of the Agreement.

               Authentic languages

               The Agreement, which should be equally authentic in all official EU languages, should include a language clause to that effect.


               EUROPEAN COMMISSION
            Brussels, 5.6.2019
            COM(2019) 518 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2019 National Reform Programme of Malta and delivering a Council opinion on the 2019 Stability Programme of Malta

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the 2019 National Reform Programme of Malta and delivering a Council opinion on the 2019 Stability Programme of Malta

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,

               Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies
                  1
               , and in particular Article 5(2) thereof,

               Having regard to the recommendation of the European Commission,

               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 21 November 2018, the Commission adopted the Annual Growth Survey, marking the start of the 2019 European Semester for economic policy coordination. It took due account of the European Pillar of Social Rights, proclaimed by the European Parliament, the Council and the Commission on 17 November 2017. The priorities of the Annual Growth Survey were endorsed by the European Council on 21 March 2019. On 21 November 2018, on the basis of Regulation (EU) No 1176/2011, the Commission also adopted the Alert Mechanism Report, in which it did not identify Malta as one of the Member States for which an in-depth review would be carried out. On the same date, the Commission also adopted a recommendation for a Council recommendation on the economic policy of the euro area, which was endorsed by the European Council on 21 March 2019. On 9 April 2019, the Council adopted the recommendation on the economic policy of the euro area (‘Recommendation for the euro area’).

               (2)As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Malta should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) and (2) below.

               (3)The 2019 country report for Malta
                  2
                was published on 27 February 2019. It assessed Malta’s progress in addressing the country-specific recommendations adopted by the Council on 13 July 2018, the follow-up given to the recommendations adopted in previous years and Malta's progress towards its national Europe 2020 targets.

               (4)On 16 April 2019, Malta submitted its 2019 National Reform Programme and, on 30 April 2019, its 2019 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (5)Relevant country-specific recommendations have been addressed in the programming of the European Structural and Investment Funds ('ESI Funds') for the 2014-2020 period. As provided for in Article 23 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council
                  3
               , where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking the effectiveness of the ESI Funds to sound economic governance
                  4
               .

               (6)Malta is currently in the preventive arm of the Stability and Growth Pact. In its 2019 Stability Programme, the government plans a decrease in the headline surplus from 2% of GDP in 2018 to 0.9% of GDP in 2019, followed by a marginal increase to 1.0% of GDP in 2020 and further to 1.1% of GDP in 2021 and 2022. Based on the recalculated structural balance
                  5
               , the medium-term budgetary objective — a balanced budget in structural terms — continues to be overachieved throughout the programme period. According to the Stability Programme, the general government debt-to-GDP ratio is expected to remain below the 60%-of-GDP Treaty reference value and to gradually decline from 46% of GDP in 2018 to around 33% in 2022. The macroeconomic scenario underpinning those budgetary projections is plausible. Based on the Commission 2019 spring forecast, the structural balance is forecast to register a surplus of 0.6% of GDP in 2019 and 0.8% of GDP in 2020, above the medium-term budgetary objective. Overall, the Council is of the opinion that Malta is projected to comply with the provisions of the Stability and Growth Pact in 2019 and 2020. At the same time, expenditure developments should be monitored carefully in the short and the medium term, especially in light of possible future risks to the robustness of revenues.

               (7)The increase in age-related spending represents a risk to the long-term sustainability of public finances. Age-related public spending in the pension and healthcare systems is expected to increase significantly compared to other EU countries, indicating a risk of rising debt in the long term. Several measures aim to increase the adequacy of pensions also through strengthening incentives for private pension savings and voluntary occupational retirement pensions. Ongoing efforts have helped to increase the supply of labour and prolong working lives, with a positive impact on employment rates for women and older workers. In 2018, the government made adjustments to include contributions made after pensionable age and allowed self-employed and part-time working pensioners under 65 years to pay contributions proportionate to their earnings, thereby promoting longer working lives. However, the statutory retirement age, gradually increasing from its current level at 62 years, is set to remain unchanged after 2027 at 65 years despite a projected further growth in life expectancy. The Pension Strategy Group established in 2018 is expected to publish a report by December 2020, outlining recommendations for improving the adequacy and sustainability of the pension system. Regarding healthcare, measures to decentralise services from hospitals to primary care and to improve the provision of long-term care services are ongoing. Current plans to expand the capacity of public hospital outpatient care can help in tackling long waiting times for certain specialties. Nevertheless, other measures to reduce unnecessary referrals to specialists and redirect inappropriate use of emergency care to outpatient have so far not been fully used thus preventing improvements in efficiency of the system. A new concept for primary care centres and investments to gradually expand the use of eHealth are carried out with a view to decentralise services from hospitals to primary care level. Reflecting increasing demand for long-term care, new types of community-based and home care services were introduced in 2017-2018. Despite their potential, the impact of the measures in the area of pensions and healthcare on fiscal sustainability has yet to materialise.

               (8)In the last decade, Malta experienced a pronounced shift towards the services sector, with a strong focus on internationally oriented areas such as financial services, tourism and remote gaming. The expansion of the services sector contributed to fuel economic growth and to develop a large surplus in the current account. At the same time, the increasing reliance on sectors that are considered vulnerable to financial integrity risks creates challenges to the governance framework, putting pressure on the supervisory and enforcement capacity. In particular, the size of the financial and the gaming sector, the efforts to attract crypto-currency operators require an effective anti-money laundering enforcement. The recent increase in the human and budgetary resources of the Financial Intelligence Analysis Unit as well as the enhancement of its procedures and processes are positive steps. Governance shortcomings, particularly in the fight against corruption, may also adversely affect the business environment and weigh negatively on investment. In particular, there is a risk of conflict of interest at various levels of government. Furthermore, the police’s Economic Crimes Unit is currently understaffed. In this context, it is important to couple a strengthened legislative framework with timely and thorough implementation. Improving the governance framework and ensuring an effective implementation is a key element to preserve Malta’s attractiveness and protect the economy from reputational risks.

               (9)The insurance sector is exposed to risks of passive supervision, where cooperation between domestic and external supervisors is essential. In contrast to the banking sector, the supervision of subsidiaries in the insurance sector are subject to home supervision, i.e. insurance companies registered in Malta and writing business in other countries are under direct supervision of the Maltese regulator. However, the supervisory capacity has not been sufficiently strengthened yet. In addition, the complexity of insurance business models and products with increased appetite for establishing and expanding specialised insurance vehicles, calls for stringent supervision.

               (10)Reforms aimed at continuing to improve independence of the judiciary and the justice system are ongoing. This includes, in particular, the establishment of a new prosecution service, independent from the Attorney General and the police as also recommended by the Council of Europe’s Commission for Democracy through Law (the Venice Commission) in an opinion on Malta, adopted in December 2018. Moreover, a strengthened governance framework, including effective judicial and anti-corruption enforcement, is a prerequisite to obtaining the full benefits of investment.

               (11)The proportion of innovative enterprises is still lagging behind. Research and innovation performance need to be strengthened by smart specialisation so that this may contribute to growth in productivity. Malta has not yet set up the formulation of a coherent, comprehensive and long-term competitiveness strategy for moving the domestic economy up the value chain. Given Malta's specialisation in fast-growing services and its aspirations for block chain technology, it is critical to invest even more in administrative and supervisory capacity. In addition, increasing Malta’s innovation performance will require further investments in intangible assets including research and development, addressing skills deficits and gaps and facilitating science-business links, all within more effective governance of the research and innovation system.

               (12)Malta needs to promote the shift towards a more sustainable and resource-efficient economy, for example by investing in the untapped potential for energy efficiency and renewables, water-management cycle, waste management, tackling the growing emissions from air conditioning, climate action and sustainable mobility that will contain emissions from road transport. Due to limited transport and commuting alternatives to driving as well as high car penetration, road congestion is one of the weakest aspects of Malta’s business environment and remains a major challenge. Moreover, greenhouse gas emissions from road transport have increased over the last 5 years. The share of renewables in the energy mix has increased to 7.2% in 2017, slightly above the 2017/2018 indicative trajectory level of 6.5%. However, Malta’s final energy consumption is continuously increasing. Further investments across sectors are needed in the short term in order to meet the 2020 national renewable energy and energy efficiency targets. Research and development funding or support measures should be implemented to develop new/improved technologies addressing environment and climate change. The environmental and social costs of the housing boom require closer monitoring. Circular economy principles should be applied to the disposal of construction waste to limit its environmental impact. The economic and social consequences of the increase in the cost of housing require attention.

               (13)The employment rate in Malta, now above EU average, is still increasing. A special emphasis in this regard could benefit people with disabilities. The gender employment gap remains the largest in the EU and women's participation in the labour market declines strongly from their mid-thirties, largely due to caring responsibilities. More labour market support for unemployed informal carers could address this gap. The increasing reliance on foreign labour to address the labour and skills shortages creates social and sustainability challenges. Policy initiatives in the areas of labour market, skills and social inclusion could benefit from better monitoring and evaluation.

               (14)Malta invests relatively high amounts in education and training but this is not yet reflected in better outcomes for all. The investment strategy would benefit from further focus on correcting social disadvantage, to be in line with the Social Pillar principle on quality and inclusive education. Despite measures to tackle early school leaving, the rate is still one of the highest in the EU. Recent measures also seek to improve the inclusiveness of tertiary education, but attainment at this level remains below the EU average and results in skills challenges. Participation in adult learning is increasing but is still low for the low-skilled and the inactive.

               (15)The fight against aggressive tax planning is essential to make tax systems more efficient and fair as acknowledged in the 2019 euro area recommendation. Spillover effects of taxpayers' aggressive tax planning strategies between Member States call for a coordinated action of national policies to complement EU legislation. Malta has taken measures against aggressive tax planning, but the high level of royalty and dividend payments as a percentage of GDP suggests that Malta’s tax rules are used by companies that engage in aggressive tax planning. The absence of withholding taxes on outbound (i.e. from EU residents to third country residents) dividends, interest and royalty payments made by Malta based companies may lead to those payments avoiding tax altogether, if they are also not subject to tax in the recipient country. While Malta’s Notional Interest Deduction regime will help to reduce the debt equity bias, the scheme’s anti-abuse rules, combined with a generous rate and a stock-based regime, warrant close monitoring to prevent any misuse for aggressive tax planning. Although Malta Individual Investor Programme and Malta Residence and Visa Programme do not automatically grant residence for tax purposes, if requirement are met, income may be exempt under the ‘non-dom’ regime, if income is not remitted to Malta, without substantial physical presence requirements. They may facilitate aggressive tax planning practices and have been listed by the OECD as having a potentially high risk for being misused to circumvent the automatic exchange of financial accounts

               (16)The programming of EU funds for the period 2021-2027 could help address some of the gaps identified in the recommendations, in particular in the areas covered by Annex D to the country report
                  6
               . This would allow Malta to make the best use of those funds in respect of the identified sectors.

               (17)In the context of the 2019 European Semester, the Commission has carried out a comprehensive analysis of Malta’s economic policy and published it in the 2019 country report. It has also assessed the 2019 Stability Programme and the 2019 National Reform Programme and the follow-up given to the recommendations addressed to Malta in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Malta, but also their compliance with Union rules and guidance, given the need to strengthen the Union’s overall economic governance by providing Union-level input into future national decisions.

               (18)In the light of this assessment, the Council has examined the 2019 Stability Programme and is of the opinion that Malta is expected to comply with the Stability and Growth Pact.

               HEREBY RECOMMENDS that Malta take action in 2019 and 2020 to:

               1.Ensure the fiscal sustainability of the healthcare and the pension systems, including by restricting early retirement and adjusting the statutory retirement age in view of expected gains in life expectancy.

               2.Address features of the tax system that may facilitate aggressive tax planning by individuals and multinationals, in particular by means of outbound payments. Strengthen the overall governance framework, including by continuing efforts to detect and prosecute corruption. Continue the ongoing progress made on strengthening the anti-money laundering framework, notably regarding enforcements. Strengthen the independence of the judiciary, in particular the safeguards for judicial appointments and dismissals, and establish a separate prosecution service.

               3.Focus investment-related economic policy on research and innovation, natural resources management, resource and energy efficiency, sustainable transport, reducing traffic congestion and inclusive education and training.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 209, 2.8.1997, p. 1.

                     (2)

                        SWD(2019) 1017 final.

                     (3)

                        Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320).

                     (4)

                        COM(2014) 494 final.

                     (5)

                        Cyclically-adjusted balance net of one-off and temporary measures, recalculated by the Commission using the commonly agreed methodology.

                     (6)

                        SWD(2019) 1017 final.


               EUROPEAN COMMISSION
            Brussels, 5.6.2019
            COM(2019) 519 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2019 National Reform Programme of the Netherlands and delivering a Council opinion on the 2019 Stability Programme of the Netherlands

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the 2019 National Reform Programme of the Netherlands and delivering a Council opinion on the 2019 Stability Programme of the Netherlands

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,

               Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies
                  1
               , and in particular Article 5(2) thereof,

               Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances
                  2
               , and in particular Article 6(1) thereof,

               Having regard to the recommendation of the European Commission,

               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 21 November 2018, the Commission adopted the Annual Growth Survey, marking the start of the 2019 European Semester for economic policy coordination. It took due account of the European Pillar of Social Rights, proclaimed by the European Parliament, the Council and the Commission on 17 November 2017. The priorities of the Annual Growth Survey were endorsed by the European Council on 21 March 2019. On 21 November 2018, on the basis of Regulation (EU) No 1176/2011, the Commission also adopted the Alert Mechanism Report, in which it identified the Netherlands as one of the Member States for which an in-depth review would be carried out. On the same date, the Commission also adopted a recommendation for a Council recommendation on the economic policy of the euro area, which was endorsed by the European Council on 21 March 2019. On 9 April 2019, the Council adopted the recommendation on the economic policy of the euro area (‘Recommendation for the euro area’).

               (2)As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, The Netherlands should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) and (3) below. In particular, investment measures and measures supporting wage growth will help address the first euro area recommendation as regards euro area rebalancing, tax measures will help address the second euro area recommendation as regards fight against aggressive tax planning, and reducing the debt bias for households will help address the fourth euro area recommendation as regards reducing the debt bias in taxation.

               (3)The 2019 country report for the Netherlands
                  3
                was published on 27 February 2019. It assessed the Netherlands’s progress in addressing the country-specific recommendations adopted by the Council on 13 July 2018, the follow-up given to the recommendations adopted in previous years and the Netherlands's progress towards its national Europe 2020 targets. It also included an in-depth review under Article 5 of Regulation (EU) No 1176/2011, the results of which were also published on 27 February 2019
                  4
               . The Commission’s analysis led it to conclude that the Netherlands is experiencing macroeconomic imbalances. In particular, the high stock of private debt and the large current account surplus constitute sources of imbalances, with cross-border relevance. Supported by economic growth, the private debt-to-GDP ratio has continued its downward trend both for corporate and households debts, although it is still elevated. Nevertheless, nominal household debt is slowly increasing on the back of rising house prices.

               (4)On 29 April 2019, the Netherlands submitted its 2019 National Reform Programme and its 2019 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (5)Relevant country-specific recommendations have been addressed in the programming of the European Structural and Investment Funds ('ESI Funds') for the 2014-2020 period. As provided for in Article 23 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council
                  5
               , where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking the effectiveness of the ESI Funds to sound economic governance
                  6
               .

               (6)The Netherlands is currently in the preventive arm of the Stability and Growth Pact. In its 2019 Stability Programme, the government plans a decrease in the general government surplus from 1.5% of GDP in 2018 to 0.0% of GDP in 2022. Based on the recalculated structural balance
                  7
               , the medium-term budgetary objective — a structural deficit of 0.5% of GDP — continues to be overachieved throughout the programme period. According to the 2019 Stability Programme, the government debt-to-GDP ratio is projected to fall from 52.4% of GDP in 2018 to 44.6% of GDP in 2022. The macroeconomic scenario underpinning those budgetary projections is plausible. Based on the Commission 2019 spring forecast, the structural balance is projected to decline from a surplus of 0.8% of GDP in 2018 to 0.7% of GDP in 2019 and 0.2% of GDP in 2020, above the medium-term budgetary objective. General government debt is forecast to remain on a firm downward path. Overall, the Council is of the opinion that the Netherlands is projected to comply with the provisions of the Stability and Growth Pact in 2019 and 2020. At the same time, while respecting the medium-term budgetary objective, it would be important to use fiscal and structural policies to support an upward trend in investment.

               (7)With respect to fiscal sustainability, the projected increase in public expenditure on long term care points to medium risks in long-term sustainability. In 2015 the government moved a large part of the long-term care system to the municipal domain to improve its efficiency and lower public expenditures. The impact of this reform on fiscal sustainability needs to be monitored.

               (8)As of November 2018, the funds of the Deposit Guarantee Fund, an independent legal entity, have been moved from a segregated account in the Dutch central bank to an account with the Treasury. The Dutch Deposit Guarantee Fund was being built up gradually and had so far accumulated around EUR 1 billion, with an additional EUR 4 billion to be paid by banks by 2024, which should have been invested in a diversified portfolio of low-risk assets in line with the Deposit Guarantee Scheme Directive. The transfer of the account of the fund reduces the gross debt level, but has no effect on the public deficit. Following this transfer, the Treasury will be able to use the funds for the financing of government expenditures, but will have to make the funds available in case there is a need to make pay-outs to depositors or finance interventions in accordance with its legal mandate, which may have an impact on financial stability.

               (9)Dutch households combine large illiquid assets in housing and pensions with high household debt. Long balance sheets make households vulnerable to financial and economic shocks. High household debt is explained by generous tax relief on mortgage interest payments, but also by a lack of a well-functioning middle segment on the rental market and high compulsory pension savings. A key challenge in addressing high household indebtedness lies in the housing market, where the rigidities and distortive incentives that have built up over decades shape the patterns of housing financing and sectoral savings. Since 2012, a series of measures has been implemented that partly addresses this. The announced acceleration of the reduction in mortgage interest tax deductibility has been put into law and will start in 2020. Despite this, the tax relief on mortgage payments remains generous and continues to result in a substantial debt bias for households. At the same time, the private rental market, as the only non-subsidised segment, remains underdeveloped accounting for 13% of total dwellings. The lack of a well-functioning middle segment on the rental market encourages households to buy rather than rent, leading to high debt-to-income ratios and financial vulnerability

               (10)While the pension system performs well on pension adequacy and fiscal sustainability, it has drawbacks in terms of intergenerational fairness, transparency of pension rights and flexibility. Moreover, occupational pension contributions are high and fluctuate depending on how pension funds perform. As such it may affect household spending in a pro-cyclical way. A reform of the pension system could, over the life cycle, lead to lower compulsory pension contributions and more stable consumption (or ‘consumption smoothing’). The government has the intention to substantially reform the second pension pillar in order to improve coverage and create a more transparent, more flexible and actuarially fairer system. A simultaneous reform of housing market institutions and the pension system has the potential to shorten household balance sheets, and make the household sector less vulnerable to financial and economic shocks with beneficial effects for macro-economic resilience and economic growth.

               (11)Despite low unemployment, high job vacancy rates and growing shortage of workers, nominal wage growth has remained moderate so far (1.1% in 2017and 2.4% in 2018). Wages in collective agreements increased on average by 2.1% in 2018, while public wages increased at a faster rate (by 3% in the second half of 2018). Furthermore, wage agreements were reached leading to a nominal increase of 7% in 2 years for all civil servants in central government. Additional funding has been provided to increase the salaries of primary school teachers. In addition, the government adopted several fiscal measures which reduce the tax burden on labour and aim to increase the net disposable household income of those who work. Further boosting disposable household income by strengthening the conditions that support wage growth and reforming the second pillar of the pension system to make it more transparent, inter-generationally fairer and more resilient to shocks would support domestic demand and help to rebalance the euro area.

               (12)The fight against aggressive tax planning is essential to make tax systems more efficient and fair as acknowledged in the 2019 euro area recommendation. Spillover effects of taxpayers' aggressive tax planning strategies between Member States call for a coordinated action of national policies to complement EU legislation. The Netherlands has taken measures against aggressive tax planning, but the high level of dividend, royalty and interest payments made via the Netherlands suggests that the country’s tax rules are used by companies that engage in aggressive tax planning. A large proportion of the foreign direct investment stock is held by ‘special purpose entities’. The absence of withholding taxes on outbound (i.e. from EU residents to third country residents) royalties and interest payments may lead to those payments escaping tax altogether, if they are also not subject to tax in the recipient jurisdiction. The announcement of the reform agenda on taxation, including withholding taxes on royalty, and interest payments in case of abuse or payments to low-tax jurisdictions, is a positive step to decrease aggressive tax planning and should be monitored closely.

               (13)Growth in employment in recent years has mainly been due to temporary employment and self-employment, although job growth for employees with permanent contracts has recently outpaced job growth for temporary employment. Nevertheless, the share of flexible employment remains high and represents a substantial share of the labour market. The high percentage of temporary contracts and the rapid increase in self-employment without employees is observed in great differences in applicable labour regulations, labour protection, and in the differences in tax and social security legislation. A package of measures was adopted by the government (draft bill labour market in balance, 'Wet Arbeidsmarkt in Balans') to make it easier to hire permanent employees and make flexible contracts less flexible. Once adopted by Parliament, the implementation of these measures (which should enter into force in 2020) should be closely monitored. Moreover, measures have been announced to ease the obligation of employers to continue to pay salaries for two years in case of illness. However, no other concrete measures have been adopted so far. Therefore, some of these institutional factors still create financial incentives for employees to start working as self-employed or favour the use the status of self-employed without employees. The self-employed are more often under-insured against disability, unemployment and old age, which could affect the sustainability of the social security system in the long run. In addition, the enforcement of measures to tackle bogus self-employment has been suspended until 2020.

               (14)Despite a labour market that is performing well overall, fostering equal opportunities regarding employment and active inclusion remains an important challenge, in particular for people with a migrant background, for those operating at the margins of the labour market and for those who are economically inactive. In addition, there is still untapped labour potential, in particular among the high number of part-time working women.

               (15)Technical and digital skills and qualified professionals are crucial for the Dutch economy’s capacity to innovate and for productivity growth. This points to the need to invest more in training, including training in digital skills, and to promote flexible upskilling and reskilling opportunities. Improving society’s capacity to innovate also requires investments to support education in science, technology, engineering and mathematics. Moreover, increased investment in skills, education and training is crucial to improving access to the labour market and the employability of those at the margins of the labour market, while fostering equal opportunities and active inclusion.

               (16)While the research and development investment intensity for the Netherlands rose to over 2%, it is still well below the 2.5% national target and the level of top performers. In terms of productivity, the Netherlands is one of the best performing countries in many sectors. Continued productivity growth is therefore highly dependent on innovation. Additional investment in research and development, and innovation, especially in the private sector, would support this.

               (17)The energy transition and the reduction of greenhouse gas emissions requires substantial investments to ensure a more sustainable and resource efficient economic development. The Netherlands is likely to overachieve its 2020 targets in the field of greenhouse gas reductions, while reaching the 2030 targets will require additional measures. The 2020 primary energy efficiency and renewable energy targets will not be reached without additional measures. The Dutch target for renewable energy by 2023 as defined by their Energy Agreement target should be within reach thanks to investments in off-shore wind farms. By the end of 2019, the Dutch government aims at adopting a National Energy and Climate Plan which will provide an overview of its investment needs until 2030 for the different dimensions of the Energy Union, including renewable energy, energy efficiency, security of supply, and climate mitigation and adaptation.

               (18)Congestion remains a challenge in the Netherlands, which is a dense and well equipped country and a key player in EU logistics with the biggest EU port in Rotterdam and one of the biggest airports in Schiphol. The issue has been alleviated with additional infrastructure works but it still remains an issue with high social costs and hours wasted stuck in traffic.

               (19)The programming of EU funds for the period 2021-2027 could help address some of the needs identified in the recommendations, in particular in the areas covered by Annex D to the country report
                  8
               . This would allow the Netherlands to make the best use of those funds in respect of the identified sectors.

               (20)In the context of the 2019 European Semester, the Commission has carried out a comprehensive analysis of the Netherlands’s economic policy and published it in the 2019 country report. It has also assessed the 2019 Stability Programme and the 2019 National Reform Programme and the follow-up given to the recommendations addressed to the Netherlands in previous years. It has taken into account not only their relevance for sustainable fiscal and socio-economic policy in the Netherlands, but also their compliance with Union rules and guidance. This reflects the need to strengthen the Union’s overall economic governance by providing Union-level input into future national decisions.

               (21)In the light of this assessment, the Council has examined the 2019 Stability Programme and is of the opinion
                  9
                that the Netherlands is expected to comply with the Stability and Growth Pact.

               (22)In the light of the Commission’s in-depth review and this assessment, the Council has examined the 2019 National Reform Programme and the 2019 Stability Programme. Its recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendation (1) and (3) below. Those recommendations also contribute to the implementation of the Recommendation for the euro area, in particular the first and fourth euro area recommendation. Fiscal policies referred to in recommendation (3) contribute inter-alia to addressing imbalances linked to the current account surplus.

               HEREBY RECOMMENDS that the Netherlands take action in 2019 and 2020 to:

               1.Reduce the debt bias for households and the distortions in the housing market, including by supporting the development of the private rental sector. Ensure that the second pillar of the pension system is more transparent, inter-generationally fairer and more resilient to shocks. Implement policies to increase household disposable income, including by strengthening the conditions that support wage growth, while respecting the role of social partners. Address features of the tax system that may facilitate aggressive tax planning, in particular by means of outbound payments, notably by implementing the announced measures.

               2.Reduce the incentives for the self-employed without employees, while promoting adequate social protection for the self-employed, and tackle bogus self-employment. Strengthen comprehensive life-long learning and upgrade skills notably of those at the margins of the labour market and the inactive.

               3.While respecting the medium-term budgetary objective, use fiscal and structural policies to support an upward trend in investment. Focus investment-related economic policy on research and development in particular in the private sector, on renewable energy, energy efficiency and greenhouse gas emissions reduction strategies and on addressing transport bottlenecks.

               Done at Brussels,

                      For the Council

                     The President

                     (1)

                        OJ L 209, 2.8.1997, p. 1.

                     (2)

                        OJ L 306, 23.11.2011, p. 25.

                     (3)

                        SWD(2019) 1018 final.

                     (4)

                        COM(2019) 150 final.

                     (5)

                        Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320).

                     (6)

                        COM(2014) 494 final.

                     (7)

                        Cyclically-adjusted balance net of one-off and temporary measures, recalculated by the Commission using the commonly agreed methodology.

                     (8)

                        SWD(2019) 1018 final.

                     (9)

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