title: Council Recommendation of 8 July 2014 on the National Reform Programme 2014 of Luxembourg and delivering a Council opinion on the Stability Programme of Luxembourg, 2014

text:
               29.7.2014

               EN

               Official Journal of the European Union

               C 247/72

         COUNCIL RECOMMENDATION
   of 8 July 2014
   on the National Reform Programme 2014 of Luxembourg and delivering a Council opinion on the Stability Programme of Luxembourg, 2014
   2014/C 247/14
   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, which focuses on the key areas where action is needed to boost Europe's potential for sustainable growth and competitiveness.

               (2)

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

               (3)

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

               (4)

               On 9 July 2013, the Council adopted a Recommendation (3) on Luxembourg's National Reform Programme for 2013 and delivered its opinion on Luxembourg's updated Stability Programme for 2012‐2016. On 15 November 2013, in line with Regulation (EU) No 473/2013 of the European Parliament and of the Council (4), the Commission presented its opinion on Luxembourg's draft budgetary plan for 2014.

               (5)

               On 13 November 2013, the Commission adopted the Annual Growth Survey, marking the start of the 2014 European Semester for economic policy coordination. Also, on 13 November 2013, the Commission, on the basis of Regulation (EU) No 1176/2011, adopted the Alert Mechanism Report, in which it identified Luxembourg as one of the Member States for which an in‐depth review would be carried out.

               (6)

               On 20 December 2013, 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.

               (7)

               On 5 March 2014, the Commission published the results of its in‐depth review for Luxembourg, under Article 5 of Regulation (EU) No 1176/2011. The Commission's analysis leads it to conclude that Luxembourg is not experiencing macroeconomic imbalances in the sense of the Macroeconomic Imbalance Procedure. In particular, the analysis of the current account surplus shows that it does not stem from anaemic domestic demand, but is rather the result of Luxembourg's particular growth model, which is strongly based on financial services. Risks to the domestic financial stability stemming from the presence of a large financial sector exist but they are relatively contained as the sector is diversified and specialised at the same time. The high level of indebtedness in the private sector, in particular among the non‐financial corporations mainly reflects the presence of a large number of multinational firms that use their branches or subsidiaries in Luxembourg for intra‐group financing operations. Finally, the current favourable position of public finances is highly dependent on the sustainability of a growth model based on a buoyant financial sector and presents a high sustainability risk in the long term.

               (8)

               On 28 April 2014, Luxembourg submitted its 2014 National Reform Programme and, on 25 April 2014, its 2014 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (9)

               The objective of the medium‐term budgetary strategy outlined in the 2014 Stability Programme is to return to the medium‐term objective in 2016, after significantly deviating from it in 2015. The Stability Programme confirms the previous medium‐term objective of a surplus of 0,5 % of GDP, which reflects the requirements of the Stability and Growth Pact. The (recalculated) structural general government surplus is foreseen to decline from 1,4 % of GDP in 2013 to 1,1 % in 2014, before turning into a deficit of 0,1 % of GDP in 2015. Thereafter, gradually increasing structural surpluses are planned to be achieved. Therefore, Luxembourg is expected to remain at its medium‐term objective in 2014, but to significantly deviate from it in 2015. According to the Stability Programme, the growth rate of government expenditure, net of discretionary revenue measures, would be above the reference medium‐term rate of potential GDP growth in 2015. Overall, the programme objectives are partly in line with the requirements of the preventive arm of the Stability and Growth Pact, with a deviation in particular in 2015. The debt ratio, which stood at 23,1 % of GDP in 2013, well below the 60 %‐of‐GDP reference value, is projected to further decline over the programme period. The macroeconomic scenario underpinning the budgetary projections in the Stability Programme, which has been prepared by an independent body (STATEC) is slightly optimistic for 2014 and 2015. The Government projects a GDP growth rate of 3,2 % in both 2014 and 2015, whereas the Commission services 2014 spring forecast foresees 2,6 % and 2,7 %, respectively. Furthermore, the measures underpinning the fiscal trajectory for the period 2015‐18 have not yet been fully specified by the authorities. According to the Commission forecast, which does not take into account the most recently announced measures, the structural surplus is estimated to decline to 0,6 % of GDP in 2014 and turn to a deficit of 1,3 % of GDP in 2015. The growth rate of government expenditure, net of discretionary revenue measures, is estimated to be above the reference medium‐term rate of potential GDP in 2015, when a significant deviation is expected. Based on its assessment of the Stability Programme and the Commission forecast, pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that there are risks to the achievement of the targets of the Stability Programme, which are only partly in line with the requirements preventive arm of the Stability and Growth Pact, in particular as of 2015.

               (10)

               The Government submitted to Parliament in July 2013 a draft bill on the transposition of the provisions of Council Directive 2011/85/EU (5) and the Treaty on Stability, Coordination and Governance. While the draft law was expected to enter into force on 1 January 2014, its adoption was delayed by the resignation of the Government in July. According to the draft bill, a new Multiannual Finance Programme Law is introduced covering the same time horizon as the forthcoming update of the Stability Programme. The Multiannual Finance Programme Law would be updated annually on a rolling basis, together with the annual budget. It would detail plans to achieve the medium‐term budgetary objective at the level of the general government. The draft bill introduces multi‐annual ceilings in the Multiannual Finance Programme Law that would cover the central government sector only, but there is no specification on the consequences in case ceilings are exceeded. The draft bill does not foresee a national expenditure rule that would guide the setting of multi‐annual expenditure targets. However, it contains provisions for the adjustment path to the medium‐term objective to be respected. A revised draft of the law was submitted to the Parliament in March 2014, and inter alia provides for the allocation of the task for the independent monitoring of fiscal rules to a newly created institution, the ‘Conseil National des Finances Publiques’.

               (11)

               In addition, tax revenues from VAT will be hit by the new rules on VAT revenues generated from e‐commerce activities. As from 2015, such revenues will be transferred from the country where the supplier is located to that of the residence of the customer. The Government has announced that the VAT rates will be increased by 2 percentage points, which should partially compensate for the revenue loss. However, given the widespread use of reduced and super reduced rates, additional revenue can be raised by extending the application of the standard rate and thereby compensate more largely for the above‐mentioned losses.

               (12)

               Gross public pension expenditure as a proportion of GDP in Luxembourg is to increase, according to figures of the Commission's 2012 Ageing Report, from 9,2 % of GDP to 18,6 % in 2060. This is mostly due to age‐related spending and in particular to pensions. The 2012 pension reform was limited in scope and did not substantially address the threat posed to the long‐term sustainability of the public finances. Short‐term financing of the pension system is currently guaranteed by a low old‐age dependency ratio and relies on the contributions paid by the relatively young population of cross‐border workers. In the future, this trend is expected to reverse and pension costs, as well as long‐term care costs, will probably increase substantially. In order to guarantee the viability of the pension system, a substantial increase in the contribution rate would be necessary after 2020, in addition to the built‐in moderation of the adaptation of pensions to the standard of living. This would entail a significant increase in the burden on labour supported by the future active population and, consequently, a loss of cost competitiveness. Given the currently high level of the replacement rate, some different measures could have been taken so as to ensure a fairer distribution of the burden across generations. The introduction of a cap on pension adjustments based on real wage increases would increase pension reserves. In addition, increasing the effective retirement age, currently situated at the age of 59, by aligning it to change in life expectancy would help to ensure the long‐term sustainability of the pension system. Also, the possibilities for early retirement should be reduced. Financial incentives to prolong working careers, as provided for in the pension reform, may contribute to the sustainability of the pension system, but the employability of older workers should be further improved by reinforcing vocational education and lifelong learning. Luxembourg needs to curb the future need for, and related costs of, long‐term care to ensure its sustainability. Long‐term care services could also be made more cost‐effective by strengthening coordination between healthcare and social care, improving service delivery and better supporting family carers.

               (13)

               Luxembourg's large current account surplus is driven by financial services and masks a persistent and gradually increasing deficit in the trade balance for goods, which stems from slow export growth. While this trend reflects the increasing importance of the service sector in the economy, it is also due to a more structural loss of cost‐competitiveness. The recent steady increase in the unit labour cost has undermined the competitiveness of Luxembourg's industrial fabric. The modulation of the wage indexation mechanism adopted by the Government in 2012 will be terminated by the end of 2014. While different avenues could be explored, it is important that wages are more closely tied to productivity by means of a reform of the wage indexation system, allowing for sectoral differentiation. The heavy dependence on the financial sector represents a structural risk for the economy. Therefore, Luxembourg needs to focus on the development of highly specialised firms as a springboard for innovation‐driven growth. While the quadrupling of public sector R&D intensity since 2000 reflects the resolve to build up public research capacities, Luxembourg is not on track to reach its 2020 R&D intensity target of 2,3‐2,6 % of GDP, due to the sharp decrease in business R&D intensity (from 1,53 % of GDP in 2000 to 1 % in 2012). Its performance on the indicators on cooperation between public research institutions and firms should be further improved. The reform launched in 2013 on the reinforcement of innovative clusters should be pursued.

               (14)

               Although various measures have been adopted, youth unemployment is persistently high, at 17,4 % of the active population in 2013, albeit decreasing from 18 % in 2012. It depends heavily on the educational level and is lower among those with a higher educational attainment. Luxembourg's education system faces a number of specific challenges, such as multilingualism and the specific skills required by a highly specialised labour market with a big financial sector. The results of the OECD's 2012 students' skills survey confirmed that further measures are needed to counteract young people's relatively weak performance in basic skills, as observed since 2006. In this respect, the primary and secondary school reforms should be pursued. In addition, the quality and attractiveness of vocational and educational training should be further improved in order to provide the labour market with a qualified workforce, including in particular people with a migrant background. The design of the tax and benefit system is at the origin of very high labour‐market traps, among the highest in the Union, for all wage levels and family compositions. Also, despite recent reform efforts, activation policies have remained weak; and participation in active labour market policies has not been compulsory at any point during the period of unemployment.

               (15)

               Luxembourg is committed to reducing its greenhouse gas emissions in the non‐ETS sectors by 20 % in 2020, but is expected to miss this target by 23 percentage points. In addition, 2013 emissions are expected to be 1 % higher than the target set for 2013 in the Effort Sharing Decision. Around 70 % of transport‐related emissions are connected to fuel exports, inter alia as a result of very low excise duties on fuels. The recognition of fuel export as a key challenge in the second National Climate Action Plan adopted in May 2013 is a step forward. However, more specific and long‐term measures are needed to address this issue. Environmental taxation accounted for 2,4 % of GDP in 2012, whereas in 2004 it accounted for 3,1 %. This drop is driven in particular by lower energy tax revenues influenced by the absence of indexation on energy taxes. Transport taxes, excluding fuels, represented 0,2 % of GDP in 2012. Taxes on fuel used for transport are high at 2,2 % of GDP, in spite of the preferential tax treatment of diesel, mostly owing to cross‐border purchase of fuel. With environmental taxation accounting for a below‐average proportion of total tax revenue, the design of its environmental taxes can be improved, in particular by increasing taxation on energy products for transport.

               (16)

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

               (17)

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

               (18)

               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 this basis, 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, Luxembourg should also ensure the full and timely implementation of those recommendations,

         HEREBY RECOMMENDS that Luxembourg take action within the period 2014‐2015 to:

               1.

               Preserve a sound fiscal position in 2014; significantly strengthen the budgetary strategy in 2015 to ensure that the medium‐term objective is achieved and remain at the medium‐term objective thereafter, in order to protect the long‐term sustainability of public finances, in particular by taking into account implicit liabilities related to ageing. Strengthen fiscal governance by speeding up the adoption of a medium‐term budgetary framework covering the general government and including multi‐annual expenditure ceilings, and by putting into place the independent monitoring of fiscal rules. Further broaden the tax base, in particular on consumption.

               2.

               In view of ensuring fiscal sustainability, curb age‐related expenditure by making long‐term care more cost‐effective, pursue the pension reform so as to increase the effective retirement age, including by limiting early retirement, by aligning retirement age or pension benefits to change in life expectancy. Reinforce efforts to increase the participation rate of older workers, including by improving their employability through lifelong learning.

               3.

               Speed up the adoption of structural measures, in consultation with the social partners and in accordance with national practices, to reform the wage setting system including wage indexation with a view to improving the responsiveness of wages to productivity developments, in particular at sectoral level. Pursue the diversification of the structure of the economy, including by fostering private investment in research and further developing cooperation between public research and firms.

               4.

               Pursue efforts to reduce youth unemployment for low‐skilled jobs seekers, including those with a migrant background, through a coherent strategy, including by further improving the design and monitoring of active labour market policies, addressing skills mismatches, and reducing financial disincentives to work. To that effect, accelerate the implementation of the reform of general and vocational education and training to better match young people's skills with labour demand.

               5.

               Develop a comprehensive framework and take concrete measures to meet the 2020 target for reducing greenhouse gas emissions from non‐ETS activities, especially through the taxation of energy products for transports.

      Done at Brussels, 8 July 2014.

            For the Council

            The President

         P. C. PADOAN

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Maintained for 2014 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)  OJ C 217, 30.7.2013, p. 55.

      (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)  Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States (OJ L 306, 23.11.2011, p. 41).

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

      (7)  See page 141 of the current Official Journal.


title: 2014/710/EU: Commission Recommendation of 9 October 2014 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 communications networks and services  Text with EEA relevance

text:
               11.10.2014

               EN

               Official Journal of the European Union

               L 295/79

         COMMISSION RECOMMENDATION
   of 9 October 2014
   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 communications networks and services
   (Text with EEA relevance)

      (2014/710/EU)

   THE EUROPEAN COMMISSION,
   Having regard to the Treaty on the Functioning of the European Union,
   Having regard to Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (1), and in particular Article 15(1) thereof,
   Having regard to the opinions of the Body of European Regulators for Electronic Communications (BEREC) and of the Communications Committee,
   Whereas:

               (1)

               Directive 2002/21/EC establishes a legislative framework for the electronic communications sector that seeks, inter alia, to respond to convergence trends by covering all electronic communications networks and services within its scope. In accordance with Directive 2009/140/EC of the European Parliament and of the Council (2), the aim of the regulatory framework is, inter alia, to reduce ex ante sector-specific regulation progressively as competition in markets develops and, ultimately, for electronic communications to be governed by competition law only.

               (2)

               In line with this aim the purpose of this Recommendation is to identify those product and service markets in which ex ante regulation may be warranted in accordance with Article 15(1) of Directive 2002/21/EC. The objective of any ex ante regulatory intervention is ultimately to produce benefits for end-users by making retail markets effectively competitive on a sustainable basis. It is likely that national regulatory authorities will gradually be able to find retail markets to be competitive even in the absence of wholesale regulation, especially taking into account expected improvements in innovation and competition.

               (3)

               The definition of relevant markets may change over time as the characteristics of products and services may evolve and the possibilities for demand and supply substitution may change. With Commission Recommendation 2007/879/EC (3) having been in force for more than six years, it is now appropriate to revise it on the basis of market developments that occurred since its adoption.Hence, this Recommendation replaces Recommendation 2007/879/EC, and provides guidance to national regulatory authorities over forthcoming market reviews.

               (4)

               Article 15(1) of Directive 2002/21/EC requires the Commission to identify markets within the electronic communications sector the characteristics of which may be such as to justify the imposition of regulatory obligations in accordance with the principles of competition law. Competition law principles are therefore used in this Recommendation to define product markets in the electronic communications sector.

               (5)

               In accordance with Article 15(3) of Directive 2002/21/EC, it is for national regulatory authorities to define, in accordance with competition law and taking the utmost account of this Recommendation, relevant markets appropriate to national circumstances, in particular relevant geographic markets within their territory.

               (6)

               In accordance with Article 16(3) of Directive 2002/21/EC, ex ante regulatory obligations are only imposed in markets that are not effectively competitive. As explained in recital 27 of the Directive, these are markets where there are one or more undertakings with significant market power and where national and EU competition law remedies alone are not sufficient to address the competition problem identified. Furthermore, an analysis of effective competition should include an analysis as to whether the market is prospectively competitive, and thus whether any lack of effective competition is durable.

               (7)

               For both the Commission and national regulatory authorities the starting point for the identification of wholesale markets susceptible to ex ante regulation is the analysis of corresponding retail markets. This retail analysis is done by taking into account demand-side and, where appropriate, supply-side substitutability from a forward-looking perspective over a given time horizon. When defining relevant markets in accordance with Article 15(3) of Directive 2002/21/EC, national regulatory authorities should identify a geographic area where the conditions of competition are similar or sufficiently homogeneous and which can be distinguished from neighbouring areas in which the prevailing conditions of competition are appreciably different, having particular regard to the question whether the potential SMP operator acts uniformly across its network area or whether it faces appreciably different conditions of competition to a degree that its activities are constrained in some areas but not in others.

               (8)

               It should be assessed whether retail markets are effectively competitive from a forward-looking perspective in the absence of regulation based on a finding of significant market power. On the other hand, the analysis should take into account the effects of other types of regulation applicable to the relevant retail and related wholesale market(s) throughout the relevant period.

               (9)

               When carrying out a market analysis under Article 16 of Directive 2002/21/EC, the assessment of a market should be done from a forward-looking perspective, starting from existing market conditions. The analysis should assess whether the market is prospectively competitive and whether any lack of competition is durable, by taking into account expected or foreseeable market developments (4).

               (10)

               If the retail market concerned is not effectively competitive from a forward-looking perspective in the absence of ex ante regulation, the corresponding wholesale market(s) susceptible to ex ante regulation in line with Article 16 of Directive 2002/21/EC should be assessed. When analysing the boundaries and market power within (a) corresponding relevant wholesale market(s) to determine whether it is/they are effectively competitive, direct and indirect competitive constraints should be taken into account, irrespective of whether these constraints result from electronic communications networks, electronic communications services or other types of services or applications that are comparable from the end-users' perspective (5). On the other hand, if the retail market concerned is effectively competitive from a forward-looking perspective in the absence of ex ante wholesale regulation on the corresponding relevant market(s), this should lead the national regulatory authority to conclude that regulation is no longer needed at wholesale level. In such a case, the corresponding relevant wholesale market(s) should be assessed with a view to withdrawing ex ante regulation. Where wholesale markets are vertically linked in the supply chain, the wholesale market to be analysed first is the one that is most upstream from the retail market in question.

               (11)

               The wholesale markets listed in the Annex may have such characteristics as to justify ex ante regulation because overall they meet the following three cumulative criteria, which have also been used to identify markets susceptible to ex ante regulations in the previous versions of the Recommendation. The first criterion is the presence of high and non-transitory barriers to entry. However, given the dynamic character and functioning of electronic communications markets, possibilities to overcome barriers to entry within the relevant time horizon should also be taken into consideration when carrying out a prospective analysis to identify the relevant markets for possible ex ante regulation. The second criterion addresses whether a market structure tends towards effective competition within a relevant time horizon. The application of this criterion involves examining the state of infrastructure-based and other competition behind the barriers to entry. The third criterion is that the application of competition law alone would not adequately address the market failure(s) concerned. The main indicators to be considered when assessing the first and second criteria are similar to those examined as part of a forward-looking market analysis to determine the presence of significant market power. In particular, indicators of barriers to entry in the absence of regulation (including the extent of sunk costs), market structure, market performance and market dynamics, including indicators such as market shares and trends, market prices and trends, and the extent and coverage of competing networks or infrastructures.

               (12)

               As far as the first criterion is concerned, two types of barriers to entry are relevant for the purpose of this Recommendation: structural barriers and legal or regulatory barriers. 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 absolute cost advantages, substantial economies of scale and/or economies of scope, capacity constraints and high sunk costs. 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.

               (13)

               Legal or regulatory barriers are not based on economic conditions, but result from legislative, administrative or other measures that have a direct effect on the conditions of entry and/or the positioning of operators in the relevant market. An example of a legal or regulatory barrier impeding or preventing entry into a market 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. Legal or regulatory barriers that are likely to be removed within the relevant time horizon should not normally be deemed to constitute a barrier to entry such as to fulfil the first criterion.

               (14)

               Barriers to entry 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 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 identifies markets where barriers to entry are expected to persist over a foreseeable period. In assessing whether barriers to entry are likely to persist in the absence of regulation, it is necessary to examine whether the industry has experienced frequent and successful entry and whether entry has been or is likely in the future to be sufficiently immediate and persistent to limit market power. The relevance of barriers to entry will depend, inter alia, on the minimum efficient scale of output and the costs which are sunk.

               (15)

               Even when a market is characterised by high barriers to entry, other structural factors in that market may entail that the market still tends towards becoming effectively competitive within a relevant time horizon. A tendency towards effective competition implies that the market will either reach the status of effective competition absent ex ante regulation within the period of review, or will do so after that period provided clear evidence of positive dynamics in the market is available within the period of review. Market dynamics may for instance be caused by technological developments, or by the convergence of products and markets which may give rise to competitive constraints being exercised between operators active in distinct product markets. This may also 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 normally 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 decreasing prices may be observed.

               (16)

               The third criterion serves to assess the adequacy of corrective measures that can be imposed under competition law to tackle identified persistent market failure(s), in particular given that ex ante regulatory obligations may effectively prevent competition law infringements. Competition law interventions are likely to be insufficient where for instance the compliance requirements of an intervention to redress persistent market failure(s) are extensive or where frequent and/or timely intervention is indispensable. Thus, ex ante regulation should be considered an appropriate complement to competition law when competition law alone would not adequately address persistent market failure(s) identified.

               (17)

               The application of these three cumulative criteria should limit the number of markets within the electronic communications sector where ex ante regulatory obligations are imposed and thereby contribute to one of the aims of the regulatory framework, namely to reduce ex ante sector-specific rules progressively as competition in the markets develops. Failure to meet any one of the three criteria would indicate that a market should not be identified as susceptible to ex ante regulation.

               (18)

                  Ex ante regulation imposed at the wholesale level should be considered sufficient to tackle potential competition problems on the related downstream market(s). A downstream market should only be subject to ex ante regulation if competition on that market still exhibits significant market power despite the presence of ex ante regulation on the related wholesale upstream market(s). Given the advances in competition that have been achieved thanks to regulation, this Recommendation identifies only relevant markets at the wholesale level. It is believed that their regulation can address a lack of effective competition at the wholesale level, which in turn is the cause of identified market failures in the related retail markets. Should a national regulatory authority nonetheless demonstrate that wholesale interventions have been unsuccessful, the relevant retail market may be susceptible to ex ante regulation provided that the national regulatory authority has found that the three-criteria test prescribed in this Recommendation is met.

               (19)

               The markets listed in the Annex have been identified on the basis of the above-mentioned three cumulative criteria. The national regulatory authorities should start from a presumption that, in these markets, the three criteria are met. If, however, a national regulatory authority concludes that, absent regulation at the wholesale level, the retail market(s) as defined display(s) sustainable competition, it should also conclude that ex ante regulation is no longer needed at the wholesale level.

               (20)

               For the markets listed in the Annex, a national regulatory authority may still consider it appropriate, on the basis of specific national circumstances, to conduct its own three-criteria test. A national regulatory authority may conclude that the three-criteria test is or is not met in the national circumstances. If the three-criteria test is not met for a specific market listed in the Recommendation, the NRA should not impose regulatory obligations on that market.

               (21)

               National regulatory authorities may identify other markets than those listed in this Recommendation and apply the three-criteria test. In particular, if national regulatory authorities, having concluded that a retail market is not effectively competitive absent ex ante regulation, intend to regulate the corresponding wholesale market(s), and this/these market(s) is/are not listed in the Recommendation, they should always conduct the three criteria test. In such a case, the wholesale market to be analysed first is the one that is most upstream from the retail market in question in the vertical supply chain. A national regulatory authority should conduct a gradual analysis of the markets that are situated downstream from a regulated upstream input, to determine whether they would be effectively competitive in the presence of regulation upstream, until it reaches the retail market(s).

               (22)

               National regulatory authorities should also apply the three-criteria test to those markets listed in the Annexes to Commission Recommendation 2003/311/EC (6) and to Recommendation 2007/879/EC which are no longer listed in the Annex to this Recommendation if they are currently regulated in the light of national circumstances, in order to assess whether, on the basis of such national circumstances, such markets are still susceptible to ex ante regulation.

               (23)

               Newly emerging markets should not be subject to inappropriate ex ante regulatory obligations, even if there is a first-mover advantage, in accordance with Directive 2002/21/EC. Newly emerging markets are considered to comprise products or services where, due to their novelty, it is very difficult to predict demand conditions or market entry and supply conditions, and consequently difficult to apply the three-criteria test. The purpose of not subjecting newly emerging markets to inappropriate ex ante regulatory obligations is to promote innovation as required by Article 8 of Directive 2002/21/EC; at the same time, foreclosure of such markets by the leading undertaking should be prevented, as also indicated in the Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications networks and services (7). Incremental upgrades to existing network infrastructure rarely lead to a new or emerging market. The lack of substitutability of a product has to be established from both demand- and supply-side perspectives before it can be concluded that it is not part of an already existing market. The emergence of new retail services may give rise to a new derived wholesale market to the extent that such retail services cannot be provided using existing wholesale products.

               (24)

               National regulatory authorities shall make accessible the results of the application of the three-criteria test carried out in accordance with this Recommendation and falling within the scope of Article 7(3) of the Directive 2002/21/EC to the Commission, BEREC and other national regulatory authorities. Failure to notify a draft measure which affects trade between Member States as described in recital 38 of Directive 2002/21/EC may result in infringement proceedings being taken against the Member State concerned.

               (25)

               The markets listed in the Annex to the Recommendation no longer include two markets that were listed in Recommendation 2007/879/EC (markets 1 and 2) as they no longer fulfil the three-criteria test. As there may be a degree of variation across Member States in the pace of the expected or foreseeable market developments which underlie this finding at Union level, specific national circumstances may justify that a national regulatory authority could find that market 1 of Recommendation 2007/879/EC or other retail markets related to market 2 of Recommendation 2007/879/EC are not yet effectively competitive from a forward-looking perspective absent appropriate and proportionate wholesale remedies. National regulatory authorities could thus justify continuing ex ante regulatory intervention at wholesale level provided that the three-criteria test is satisfied in the national circumstances for the subsequent review period. The remaining markets of Recommendation 2007/879/EC still warrant ex ante regulation, although the boundaries of markets 4, 5 and 6 of Recommendation 2007/879/EC are redefined. National regulatory authorities take into account their national circumstances when delineating these markets.

         HAS ADOPTED THIS RECOMMENDATION:

               1.

               In defining relevant markets appropriate to national circumstances in accordance with Article 15(3) of Directive 2002/21/EC, national regulatory authorities should analyse the product and service markets identified in the Annex.

               2.

               When identifying markets other than those set out in the Annex, national regulatory authorities should demonstrate, and the Commission will verify, that the following three criteria are cumulatively met:

                           (a)

                           the presence of high and non-transitory structural, legal or regulatory barriers to entry;

                           (b)

                           a market structure which does not tend towards effective competition within the relevant time horizon, having regard to the state of infrastructure-based and other competition behind the barriers to entry;

                           (c)

                           competition law alone is insufficient to adequately address the identified market failure(s).

               3.

               When considering that any of the markets set out in the Annex is not susceptible to ex ante regulation in the specific national circumstances, national regulatory authorities should demonstrate, and the Commission will verify, that at least one of the three criteria set out in point 2 is not met.

               4.

               National regulatory authorities should consider all relevant competitive constraints, irrespective of whether the sources of such constraints are deemed to be electronic communications networks, electronic communications services, or other types of services or applications which are comparable from the perspective of the end-user.

               5.

               This Recommendation is without prejudice to market definitions, results of market analyses and regulatory obligations adopted by national regulatory authorities in accordance with Articles 15(3) and 16 of Directive 2002/21/EC prior to the date of adoption of this Recommendation.

               6.

               This Recommendation is addressed to the Member States.

      Done at Brussels, 9 October 2014.

            For the Commission

         Neelie KROES

            Vice President

      (1)  OJ L 108, 24.4.2002, p. 33.

      (2)  Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services (OJ L 337, 18.12.2009, p. 37).

      (3)  Commission Recommendation 2007/879/EC of 17 December 2007 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 communications networks and services (OJ L 344, 28.12.2007, p. 65).

      (4)  Point 20 of the Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications networks and services (2002/C 165/03).

      (5)  Such as for instance, over-the-top (OTT) services which although today may not be considered as direct substitutes to services provided by electronic communication service providers, technological developments are likely to result in their a continuous expansion in the coming years.

      (6)  Commission Recommendation 2003/311/EC 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 (OJ L 114, 8.5.2003, p. 45).

      (7)  Commission Guidelines (OJ C 165, 11.7.2002, p. 6).

      ANNEX

                  Market 1

                  :

                  Wholesale call termination on individual public telephone networks provided at a fixed location

                  Market 2

                  :

                  Wholesale voice call termination on individual mobile networks

                  Market 3

                  :

                              (a)

                              Wholesale local access provided at a fixed location

                              (b)

                              Wholesale central access provided at a fixed location for mass-market products

                  Market 4

                  :

                  Wholesale high-quality access provided at a fixed location


Avis juridique important

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32003H0523(01)

Council recommendation of 8 May 2003 on a model agreement for setting up a joint investigation team (JIT)

Official Journal C 121 , 23/05/2003 P. 0001 - 0006

Council recommendationof 8 May 2003on a model agreement for setting up a joint investigation team (JIT)(2003/C 121/01)THE COUNCIL OF THE EUROPEAN UNION,HAVING REGARD to Article 13 of the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union of 29 May 2000(1) (hereinafter referred to as the Convention) and to the Council Framework Decision of 13 June 2002 on joint investigation teams(2) (hereinafter referred to as the Framework Decision),RECALLING the outcome of the conference on "A Strategic European Initiative on the development of policy and legislation covering joint investigation teams" (7 to 9 October 2002 Dublin) organised by the Irish Police (An Garda Síochána) with the support of the European Community under the Grotius programme,CONVINCED of the need for a model agreement to facilitate the setting up of joint investigation teams in order to implement swiftly the Framework Decision, which has brought forward the implementation of Article 13 of the Convention,BEARING in mind that such a model agreement should be comprehensive but also flexible so as to ensure that the competent authorities may adapt it to the particular circumstances of each case,MINDFUL of the fact that Eurojust and Europol will conclude an agreement on cooperation, which will be of importance to the participation of both bodies in joint investigative teams,HEREBY RECOMMENDS Member State Governments:to encourage those of their competent authorities that wish to set up a Joint Investigation Team in accordance with the terms of the Framework Decision and the Convention with competent authorities from other Member States, to use the model agreement where appropriate set out in the Annex to this Recommendation in order to agree upon the modalities for the joint investigation team.Done at Brussels, 8 May 2003.For the CouncilThe PresidentM. Chrisochoïdis(1) OJ C 197, 12.7.2000, p. 3.(2) OJ L 162, 20.6.2002, p. 1.ANNEXMODEL AGREEMENT ON THE ESTABLISHMENT OF A JOINT INVESTIGATION TEAM>PIC FILE= "C_2003121EN.000202.TIF">>PIC FILE= "C_2003121EN.000301.TIF">>PIC FILE= "C_2003121EN.000401.TIF">>PIC FILE= "C_2003121EN.000501.TIF">APPENDIX TO THE MODEL AGREEMENT ON THE ESTABLISHMENT OF A JOINT INVESTIGATION TEAM>PIC FILE= "C_2003121EN.000602.TIF">


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52004SC0089

Recommendation for a Council opinion in accordance with the third paragraph of Article 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 on the updated stability programme of Greece, 2003-2006  /* SEC/2004/0089 final */

Recommendation for a COUNCIL OPINION in accordance with the third paragraph of Article 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Greece, 2003-2006(presented by the Commission)EXPLANATORY MEMORANDUMCouncil Regulation (EC) No. 1466/97, on the strengthening of the surveillance of budgetary positions and the surveillance and co-ordination of economic policies [1], stipulated that countries participating in the single currency were to submit stability programmes to the Council and the Commission by 1 March 1999. In accordance with Article 5 of this Regulation, the Council had to examine each stability programme based on the assessments prepared by the Commission and the Committee set up by Article 114 of the Treaty (the Economic and Financial Committee). The Commission adopted a recommendation on each programme. On the basis of this recommendation and after having consulted the Committee set up by Article 114, the Council delivered an opinion, following its examination of the programme.[1]  OJ L 209, 2.8.1997. The documents referred to in this text can be found at the following web siteThe first stability programme of Greece covering the period 2000-2004 was submitted in December 2000 and assessed by the Council on 12 February 2001 [2]. Greece submitted the 2003 update to its stability programme, covering the period 2003-2006, on 1 December 2003. The Commission services have carried out a technical evaluation of this updated stability programme taking into account the information provided in accordance with the Code of Conduct [3], the Autumn 2003 forecasts as well as subsequent evaluations, the commonly agreed methodology for the estimation of cyclically-adjusted balances, the recommendations in the Broad Economic Policy Guidelines and the principles laid down in the Communication from the Commission to the Council of 27 November 2002 on strengthening the co-ordination of budgetary policies [4]. This evaluation warrants the following assessment:[2]  OJ C 77, 9.3.2001[3]  Revised Opinion of the Economic and Financial Committee on the content and format of stability and convergence programmes, document EFC/ECFIN/404/01 - REV 1 of 27.6.2001 endorsed by the Ecofin Council on 10.7.2001.[4]  COM(2002) 668 final, 27.11.2002.The updated programme largely complies with the data requirements of the revised "code of conduct" on the content and format of stability and convergence programmes. This update does not provide the breakdown of the budget balances of the sub-sectors of the general government, as it was the case in the previous programmes. There is also no analysis of the long-term sustainability of public finances.In 2003, the Greek economy has continued to be buoyant despite the less supportive international context. Real GDP growth reached 4.0% after 3.8% in 2002, mainly sustained by a very robust internal demand. Public investment supported by the 3rd Community Support Framework and investment related with the preparation of the 2004 Olympic Games boosted activity, while private investment and consumption continued to increase at a robust rate supported notably by favourable credit conditions. Consequently, employment is estimated to have accelerated in 2003, but the unemployment rate, although declining, still hovers at around 9.5%. Consumer prices have been slowly decelerating, but due to demand pressure, their average increase should still reach 3.5%. Despite buoyant and better than expected real output growth, the government deficit is estimated at 1.4% of GDP in 2003, up from 1.2% of GDP in 2002 and against 0.9% of GDP projected in the previous programme. In cyclically-adjusted terms based on Commission calculations according to the commonly agreed methodology, the government deficit deteriorated by 0.4 percentage points, at 1.7% of GDP in 2003.According to the 2003 update of the stability programme, the economic activity should accelerate further in 2004, real GDP reaching 4.2% and mildly slow down as from 2005 due to faltering boost from the Olympic Games-related investment. Real GDP growth is thus projected to reach 4% in 2005 and 3.8% in 2006. The 2003 update considers that the deceleration in investments, in the period 2005 and 2006, should be relatively limited, as financial flows, in particular those stemming from the 3rd Community Support Framework until 2006, should be directed towards sectors and geographical areas other than those related with the Olympic Games and support investment.These assumptions seem to hinge on the optimistic side. The Commission Autumn 2003 forecasts project a sharper deceleration in gross capital formation in 2005, to a still rather high pace, as a result of the ending of the Olympic Games-related activities. Private consumption, however, is expected to continue increasing at robust rates. Commission calculations on the basis of real GDP projections provided by the update show that the positive output gap increases throughout the period to 2006. However, projecting such a steady and buoyant real growth in the medium term seems somewhat optimistic and risks are skewed to the downside. Moreover, in a context of such robust demand, pressures on costs and prices can be stronger than expected in the update, putting even more at risk the control of some government expenditure items, such as the wage bill, and endangering the external competitiveness of the economy.Against such a background of strong economic dynamics, the budgetary adjustment efforts projected in the programme are modest and back-loaded to 2005 and 2006. The update targets a general government deficit of 1.2% of GDP in 2004 as against an expected deficit of 1.4% of GDP in 2003. For 2005 and 2006, the projections are for headline deficits of 0.5% of GDP and balance in 2006. Commission calculations based on the programme growth assumptions and budgetary targets show that the cyclically-adjusted government balance would not improve at all in 2004. It would improve by 0.5% of GDP in 2005 and 0.3% of GDP in 2006. At the end of the programme horizon, the cyclically-adjusted deficit would reach 0.9% of GDP, still far from a close-to-balance position. All in all, in the light of the current and projected growth conditions and the implied inflationary risks, the fiscal stance in the update is inappropriate.There are several risks associated with the budgetary projections of the update. According to the 2003 update, the slippage in 2003 would proceed mainly from overruns in State expenditure related to the acceleration of the preparation of the Olympic Games and compensation for weather damages. However, the deviation also results from less-than-expected fiscal revenues and more importantly, from higher-than-projected social transfers and public wages. The general government deficit in 2003 is likely to be higher than 1.4% of GDP. Such a worse fiscal situation is likely to affect the outcome for 2004. The overall budgetary cost of the 2002 tax reform and of the 2003 social package was estimated by the Greek authorities at 2.2-2.4% of GDP (of which 0.8%-1.0% of GDP split over 2003 and 2004 for the tax package and 1.4% of GDP for the social measures almost fully in 2004). Such costs can hardly be consistent with a decline of only one percentage point of GDP in the primary surplus of the State budget in the two years, as assumed by the update. Moreover, the impact of these measures may have been underestimated in the budgetary projections of the programme.. Finally, expenditures related to the Olympic Games will accelerate in the first half of 2004. According to the Commission Autumn 2003 forecasts, the government deficit for 2004 will be clearly above the programme's target.The budgetary strategy of the 2003 update is based on maintaining high primary surpluses consistent with a reduction in the expenditure ratio and an accelerating decline in the debt ratio. The budgetary adjustment is expected to gain momentum in 2005 and 2006 with the primary surplus increasing by 0.6 percentage points to 5.3% of GDP in 2006. This would be mostly the result of lower current primary spending, in particular government consumption. However, for these years no concrete budgetary policy actions are spelled out. It must be noted in this respect that the Code of Fiscal Stability, which was announced in the 2002 update and was welcomed by the Council in its opinion of January 2003, has not been adopted as yet. Such a code was supposed to outline a regulatory framework for improving control over primary expenditure.The medium-term budgetary adjustment projected by the updated programme, needs to be assessed taking particular account of the still very high level of the government debt. The government debt ratio is projected to decline by over 14 percentage points of GDP over the entire period 2003-2006 to 90.5% of GDP in 2006. As a comparison, the 2002 update projected a reduction of more than 17 percentage points of GDP for the same period. The largest part of the reduction is expected to occur after 2004. The debt ratio reduction is expected to result from increasing contribution from the primary surplus and diminishing stock-flow adjustments. The projections for the primary surplus (4.7% in 2003 and 2004, increasing to 5.3% by 2006) seem ambitious in the light of the risks to the proposed budgetary adjustment highlighted above. Moreover, past experience shows that financial transactions (which are not recorded in the deficit), tend to weigh heavily on debt accumulation. In its Opinion on the 2002 update stability programme and the previous programmes, the Council had already urged the Greek authorities to implement stronger and more robust medium-term budgetary adjustment taking into consideration the still very high level of the government debt, as well as its insufficient decline in recent years. Such an effort was also necessitated by the future budgetary costs of ageing population.Greece has not presented an analysis of long-term sustainability of public finances in its updated stability programme despite previous assessment clearly pointed out the risk of long-term unbalances. The Commission considers that, on the basis of the current policies, there are risks of severe budgetary imbalances emerging in Greece. Pension expenditure is projected to increase to a level that would be well above other EU countries. The Greek budgetary strategy outlined in the programme - which is mainly based on the reduction of the deficit towards close to balance - is not sufficient to improve the sustainability of public finances and more ambitious targets for the budget balance should be pursued. Moreover, the budgetary challenges posed by the ageing population should be tackled through a comprehensive strategy that includes further reform of the pension system.The economic policies as reflected in the 2003 update are not fully consistent with the recommendations in the broad economic policy guidelines, especially those with budgetary implications. In particular, the projected decline in the debt ratio is subject to risk and there is no clear evidence of effective control of government current primary expenditure, in particular of its inelastic components, like the wage bill and social transfers.Based on this assessment, the Commission has adopted the attached recommendation for a Council Opinion on the updated stability programme of Greece and is forwarding it to the Council.Recommendation for a COUNCIL OPINION in accordance with the third paragraph of Article 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Greece, 2003-2006THE 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 co-ordination of economic policies [5], and in particular Article 5(3) thereof,[5]  OJ L 209, 2.8.1997.Having regard to the recommendation of the Commission, after consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:On [10 February 2004], the Council examined the 2003 update of the stability programme of Greece which covers the period 2003 to 2006. The updated programme complies largely with the data requirements of the revised "code of conduct" on the content and format of stability and convergence programmes.The budgetary stance underlying the update is based on maintaining high primary surpluses over the programme period, consistent with a reduction in the expenditure ratio and an accelerating decline in the debt ratio. At the same time, a significant programme of public investment is expected to be implemented.The 2003 update projects real GDP growth to accelerate from an estimated 4.0% in 2003 to 4.2% in 2004 and decelerate somewhat afterwards, averaging 4% in the period 2004-2006 from an expected average rate of growth of 3.8% in the 2002 update of the stability programme. Employment growth is projected to decelerate from 1.7% in 2004 to 1.2% on average in 2005-2006. Inflation is expected to decline gradually, the private consumption deflator decelerating to 2.6% by 2006 from 3.5% in 2004. On the basis of currently available information, the macroeconomic scenario in the update seems optimistic and risks are skewed to the downside. In particular, the evolution of potential growth over the medium term reflects favourable assumptions about the contribution of capital formation. Moreover, in a context of such robust demand, pressures on costs and prices can be stronger than expected in the update, putting even more at risk the control of some government expenditure items, such as the wage bill, and endangering the external competitiveness of the economy.The update targets a general government deficit of 1.2% of GDP in 2004 as against an expected deficit of 1.4% of GDP in 2003. In cyclically-adjusted terms, based on Commission calculations according to the commonly agreed methodology, there is no improvement in 2004 as the cyclically-adjusted deficit remains at 1.7% of GDP. For 2005 and 2006, the projections are for headline deficits of 0.5% of GDP and balance in 2006. In cyclically-adjusted terms, the corresponding deficits amount to 1.2% and 0.9% of GDP respectively. In the light of the high debt ratio, the overall proposed adjustment is quite limited while a more balanced "policy mix" would call for a stricter stance of fiscal policy and an effective use of the opportunity provided by favourable growth prospects.Although the budgetary targets in the programme seem to provide a sufficient margin against breaching the 3% deficit threshold with normal macroeconomic fluctuations throughout the programme period, there are risks linked to the macroeconomic scenario, the likely underestimated deficit in 2003 and the lack of information on envisaged measures to contain primary expenditures. Anyhow, the Stability and Growth Pact medium-term objective of a budgetary position of close-to-balance or in surplus will not be achieved over the programme period.The government debt ratio is projected to gradually decline from 101.7% of GDP in 2003 to 90.5% of GDP in 2006. Developments in the debt ratio are likely to be less favourable than projected, given the risks to the deficit outcome mentioned above and possible negative developments in below-the-line operations, the latter having been a persistent source of debt accumulation in recent years.On the basis of current policies, there is a serious risk of severe budgetary imbalances emerging in Greece in the future due to an ageing population, taking also into account the high debt ratio. Thus, the budgetary challenges posed by ageing population should be tackled through a comprehensive strategy that includes further reform of the pension system.The economic policies as reflected in the 2003 update are not fully consistent with the recommendations in the Broad Economic Policy Guidelines, specifically those with budgetary implications. In particular, the projected decline in the debt ratio is subject to risk and there is no clear evidence of effective control of government current primary expenditure, in particular of its inelastic components, like the wage bill and social transfers.


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

text:
               30.7.2013

               EN

               Official Journal of the European Union

               C 217/18

      COUNCIL RECOMMENDATION

   of 9 July 2013
   on the National Reform Programme 2013 of Denmark and delivering a Council opinion on the Convergence Programme of Denmark, 2013-2016
   2013/C 217/05
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

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

               (2)

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

               (3)

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

               (4)

               On 10 July 2012, the Council adopted a recommendation (4) on Denmark’s National Reform Programme for 2012 and delivered its opinion on Denmark’s Convergence Programme for 2012-2015.

               (5)

               On 28 November 2012, the Commission adopted the Annual Growth Survey, marking the start of the 2013 European Semester for economic policy coordination. Also on 28 November 2012, the Commission, on the basis of Regulation (EU) No 1176/2011, adopted the Alert Mechanism Report, in which it identified Denmark as one of the Member States for which an in-depth review would be carried out.

               (6)

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

               (7)

               On 14 March 2013, the European Council endorsed the priorities for ensuring financial stability, fiscal consolidation and action to foster growth. It underscored the need to pursue differentiated, growth-friendly fiscal consolidation, to restore normal lending conditions to the economy, to promote growth and competitiveness, to tackle unemployment and the social consequences of the crisis, and to modernise public administration.

               (8)

               On 10 April 2013, the Commission published the results of its in-depth review for Denmark, under Article 5 of Regulation (EU) No 1176/2011. The Commission’s analysis leads it to conclude that Denmark is experiencing macroeconomic imbalances, although these are not excessive.

               (9)

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

               (10)

               Based on the assessment of the Convergence Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that the macroeconomic scenario underpinning the budgetary projections in the Programme is plausible. The scenario projecting GDP growth at 0,7 % and 1,6 % in 2013 and 2014 is broadly in line with the Commission services 2013 spring forecast of 0,7 % and 1,7 %. The Convergence Programme outlines a budgetary strategy aimed at correcting the excessive deficit and fulfilling its medium-term objective (MTO) of a structural deficit of no more than 0,5 % of GDP by 2013, reflecting the objectives of the Pact. The Convergence Programme targets a general government deficit of 1,7 % of GDP in 2013 and 1,8 % in 2014, which is in line with the excessive deficit procedure (EDP) deadline proposed by the Commission. The average annual fiscal effort over the period 2011-2013, based on the structural budget balance calculations, is in line with the Council recommendation under the excessive deficit procedure. In the Convergence Programme, net discretionary measures are estimated to yield a consolidation broadly in line with the recommendation issued under the EDP. The real government expenditure (including discretionary income measures) is estimated to show zero growth in 2013 and to be at 0,4 % in 2014, thus meeting the expenditure benchmark of the Stability and Growth Pact in both years. Public finances are generally sound and the country has already reached its MTO. However, also because the country has an ageing population and ambitious welfare policies, it is crucial for Denmark to maintain a sound and sustainable framework for fiscal policies and to keep the deficit below the 3 % of GDP Treaty reference value.

               (11)

               In 2012, Denmark concluded the reform of the disability pension and subsidised employment schemes (the ‘flex-job’ system), which came into effect on 1 January 2013. These reforms constitute important measures to enhance the Danish labour supply. However, improving the employability of those furthest away from employment, including people with a migrant background, the long-term unemployed and low-skilled workers, remains a challenge. While acknowledging the ambitious reform agenda of the Government, it is important to ensure that the renowned Danish ‘flexicurity’ model continues to facilitate a smooth transition between unemployment and work, while also limiting marginalisation and social exclusion. The role of education, training and skills upgrading is important in this respect.

               (12)

               For Denmark, education is rightly a clear priority. Continued efforts are nonetheless needed to improve the quality and cost-effectiveness of its education and training systems, including by carrying through initiated reforms. The proposed reform of the primary and lower secondary education system points in the right direction and can be expected to have a positive impact on the cost-effectiveness of the school system and the quality of education, including pupils’ attainment levels. As regards vocational training, in 2012 the Government took steps to strengthen the quality of youth vocational training and secure the necessary private apprenticeships. A committee has been set up between the Government, municipalities, regions and social partners to find a permanent solution to securing the necessary provision of apprenticeships and increasing the quality of the vocational education and training system. Finding lasting and ambitious solutions to both the lack of apprenticeships and the high drop-out rates in the vocational youth educational system would indeed prepare Denmark better for future skill demands on the labour market and improve productivity performance.

               (13)

               Denmark could generate more economic growth by removing obstacles to competition in local and retail services, given the importance of this sector in the Danish economy. In 2012, the Danish Government presented a new competition act, which constitutes an important step in the right direction. The revision of its competition legislation introduced more effective mechanisms to enforce competition regulation, which fully responds to the corresponding part of the 2012 Recommendation. However, more can be done to ensure the effectiveness of measures taken in sectoral and public services areas to enhance competition and market functioning. Various policy initiatives in this field are still at an early stage and continued efforts are needed to ensure effective implementation.

               (14)

               There has been significant analysis in the past year of household indebtedness at national and EU levels to assess the threats to financial and economic stability. For the moment, risks to financial stability seem contained, but require continuous monitoring. The Danish authorities have taken a number of measures to improve the robustness of the mortgage credit system. These include a risk labelling scheme for housing mortgage loans and restrictions on variable-interest and/or deferred-amortisation loans. The mortgage credit institutes have taken, on their own initiative, measures to reduce the need for additional collateral. All these measures go in the right direction, but close monitoring will be required in order to ascertain whether they are having the desired impact. The Commission will examine Denmark’s regular reports on the impact of the measures taken in this context. Over time, property taxation in Denmark should be reviewed to reduce distortions and strengthen its countercyclical features.

               (15)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Denmark’s economic policy. It has assessed the National Reform Programme and the Convergence Programme, and presented an in-depth review. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy but also their compliance with EU rules and guidance, given the need to reinforce the overall economic governance of the Union by providing EU-level input into future national decisions. Its recommendations under the European Semester are reflected in recommendations (1) to (3) below.

               (16)

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

               (17)

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

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

               1.

               Implement the budgetary strategy in 2013 as envisaged, so as to ensure the correction of the excessive deficit by 2013. Furthermore, implement the budgetary strategy for 2014 and beyond to ensure an adequate fiscal effort to remain at the MTO.

               2.

               Take further steps to improve the employability of people at the margins of the labour market, including people with a migrant background, the long-term unemployed and low-skilled workers. Improve the quality of vocational training to reduce drop-out rates and increase the number of apprenticeships. Implement the reform of primary and lower secondary education in order to raise attainment levels and improve the cost-effectiveness of the education system.

               3.

               Continue efforts to remove obstacles to competition in the services sector, including in the retail and construction sectors, and enhance effectiveness in the provision of public services.

      Done at Brussels, 9 July 2013.

            For the Council

            The President

         R. ŠADŽIUS

      (1)  OJ L 209, 2.8.1997, p. 1.

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

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

      (4)  OJ C 219, 24.7.2012, p. 21.

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


title: Commission Recommendation of 19 March 2010 on the authorisation of systems for mobile communication services on board vessels (MCV services) (Text with EEA relevance)

text:
               20.3.2010

               EN

               Official Journal of the European Union

               L 72/42

         COMMISSION RECOMMENDATION
   of 19 March 2010
   on the authorisation of systems for mobile communication services on board vessels (MCV services)
   (Text with EEA relevance)
   (2010/167/EU)
   THE EUROPEAN COMMISSION,
   Having regard to the Treaty on the Functioning of the European Union,
   Having regard to Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (1), and in particular Article 19(1) thereof,
   Whereas:

               (1)

               The i2010 policy, as the strategic framework for a European Information Society, promotes an open and competitive digital economy in the European Union, emphasises ICT as a driver of inclusion and quality of life, and stresses the benefits of ready access to information and communication resources in all areas of daily life.

               (2)

               Mobile communication services on board vessels (MCV services) are used on board freight and passenger vessels sailing within the territorial seas in the European Union and in international waters and are often pan-European or inter-State in nature. Systems providing MCV services (‘MCV systems’) aim to complement existing mobile connectivity when operating in those areas of the territorial seas of the EU Member States, as defined in the United Nations Convention on the Law of the Sea, that are not covered by land-based mobile networks.

               (3)

               An MCV system (‘dedicated MCV system’) generally consists of one or more pico-cell base stations on board a vessel (vessel-BS), providing access to a GSM core network via a backhaul link, for example via satellite. The vessel-BS of such a system serve roaming GSM mobile terminals carried by ship passengers or crew.

               (4)

               MCV services are currently operated commercially using only the GSM standard and only in bands 880-915 MHz and 1 710-1 785 MHz for uplink (terminal transmit and base station receive) and 925-960 MHz and 1 805-1 880 MHz for downlink (base station transmit and terminal receive). In future, however, they may be extended to other terrestrial public mobile communication systems, operating in accordance with other standards and in other frequency bands.

               (5)

               The operation of dedicated MCV systems should be distinguished from the extended coverage provided by land-based mobile electronic communications networks in territorial seas to the extent that this is based on operators’ rights to establish and operate land-based mobile networks.

               (6)

               A coordinated approach to the regulation of MCV services would help to facilitate the provision of these services across the European Union, thereby contributing to achievement of the objectives of the EU single market. It would also help to ensure seamless mobile connectivity for consumers and business users and would enhance the potential of innovative maritime communication services.

               (7)

               When authorising use of spectrum for the provision of MCV services, Member States must comply with Directive 2002/21/EC and with Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive) (2). In particular, under Article 9(1) and (2) of Directive 2002/21/EC, Member States should ensure the effective management of radio frequencies for electronic communication services in their territory and promote harmonisation of the use of radio frequencies across the European Union, consistent with the need to ensure effective and efficient use thereof.

               (8)

               Under Directive 2002/21/EC, national regulatory authorities in the Member States should contribute to the development of the single market, inter alia, by removing remaining obstacles to the provision of electronic communications networks, associated facilities and services, and electronic communication services at European level and by encouraging the establishment and development of trans-European networks, the interoperability of pan-European services, and end-to-end connectivity. They should also promote competition in the provision of electronic communications networks, electronic communication services and associated facilities and services by, inter alia, encouraging efficient use and ensuring the effective management of radio frequencies and numbering resources.

               (9)

               Pursuant to Directive 2002/20/EC, the least onerous authorisation system possible should be used to allow the provision of electronic communications networks and services in order to stimulate the development of new electronic communication services and pan-European communications networks and services and to allow service providers and consumers to benefit from the economies of scale of the single market.

               (10)

               In accordance with Article 3(2) of Directive 2002/20/EC, the provision of electronic communications networks or the provision of electronic communication services may, without prejudice to the specific obligations referred to in Article 6(2) or rights of use referred to in Article 5, only be subject to a general authorisation.

               (11)

               Following Article 5(1) of Directive 2002/20/EC, Member States should, where possible, in particular where the risk of harmful interference is negligible, not make the use of radio frequencies subject to individual rights of use but to general authorisations that include the conditions of their usage.

               (12)

               Provided the technical conditions set out in Commission Decision 2010/166/EU (3) are fulfilled, the risk of harmful interference caused by MCV operation will be negligible, so, in principle, general authorisations should be granted by Member States for the use of the radio spectrum for the provision of MCV services.

               (13)

               Some Member States currently make the use of spectrum for the provision of MCV services subject to individual rights. This authorisation approach should be reassessed, including on the basis of any experience as regards the provision of MCV services in the territorial seas of Member States.

               (14)

               According to Article 1 of Directive 2009/114/EC of the European Parliament and of the Council of 16 September 2009 amending Council Directive 87/372/EEC on the frequency bands to be reserved for the coordinated introduction of public pan-European cellular digital land-based mobile communications in the Community (4) Member States should examine whether the existing assignment of the 900 MHz band to the competing mobile operators in their territory is likely to distort competition in the mobile markets concerned and should address such distortions in accordance with Article 14 of Directive 2002/20/EC. Member States should, where appropriate, consider using this occasion to change any existing exclusive rights of use granted to operators of land-based mobile networks so that they do not exclude the provision of MCV services in the relevant frequencies.

               (15)

               Member States should share information amongst each other and with the Commission in order to resolve any harmful interference issues caused by MCV services. In as much as involvement of the Communications Committee and the Radio Spectrum Committee could facilitate the resolution of such issues, these Committees should be informed by the Commission.

               (16)

               Pursuant to Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive) (5) Member States should ensure that transparent and up-to-date information on applicable prices and tariffs, and on standard terms and conditions, in respect of access to and use of publicly available telephone services is available to end-users and consumers. The Directive also calls upon Member States to ensure that, where subscribing to services providing connection and/or access to the public telephone network, consumers have a right to a contract with an undertaking or undertakings providing such services, specifying, among other things particulars of prices and tariffs and the means by which up-to-date information on all applicable tariffs and maintenance charges may be obtained.

               (17)

               International agreements in the area of maritime safety and/or public security should not be prejudiced by the operation of MCV services.

               (18)

               The regulatory and technical elements of the common approach to authorisation of the use of spectrum for the provision of MCV services in the European Union should be kept under scrutiny to ensure that they remain satisfactory for the overall purpose of avoiding harmful interference, failing which appropriate remedial measures will be considered.

               (19)

               The measures provided for in this Recommendation are in accordance with the opinion of the Communications Committee,

         HAS ADOPTED THIS RECOMMENDATION:

               1.

               This Recommendation aims to coordinate national authorisation conditions and procedures relating to the use of the radio spectrum for mobile communication services on board vessels (MCV services) in the territorial seas of Member States in order to facilitate the deployment of such services across the European Union while avoiding harmful interference caused by MCV services to land-based mobile electronic communication services.
               The national authorisation conditions and procedures referred to in this Recommendation will apply without prejudice to legal obligations concerning maritime safety and public security and regulations and/or administrative provisions concerning equipment for MCV services put in place by Member States, in compliance with European Union law, in particular Directive 1999/5/EC of the European Parliament and of the Council of 9 March 1999 on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity (6) and any applicable EU and international instruments concerning maritime equipment.

               2.

               ‘Mobile communication services on board vessels (MCV services)’ means electronic communication services, as defined in Article 2(c) of Directive 2002/21/EC, provided by an undertaking to enable persons on board a vessel to communicate via public communication networks using a GSM system without establishing direct connections with land-based mobile networks.

               3.

               This Recommendation applies to authorisation of the use of radio spectrum in the frequency bands defined in Decision 2010/166/EU for the provision of MCV services in the territorial seas of Member States, as defined in the United Nations Convention on the Law of the Sea. The provision of MCV services in the high seas, satellite communications between vessels and space stations, and the provision of mobile satellite services (MSS) to end-users on board vessels are outside the scope of this Recommendation.

               4.

               No later than 12 months after adoption of this Recommendation, Member States should take all steps necessary to be able to authorise, in the frequency bands or sub-bands made available in accordance with Decision 2010/166/EU, the use of spectrum for the provision of MCV services in their territorial seas on board vessels of their nationality and the use of spectrum for the provision of MCV services in their territorial seas, as applicable.

               5.

               Member States should not authorise use of spectrum for the provision of MCV services, unless such use satisfies the technical conditions set out in Decision 2010/166/EU.

               6.

               Member States may require that MCV systems only use the specific frequency bands or sub-bands made available, in accordance with Decision 2010/166/EU, for the operation of MCV systems in their territorial seas.

               7.

               Member States should make use of spectrum for the provision of MCV services subject to general authorisation. Without prejudice to Article 5(1) of Directive 2002/20/EC, where the use of spectrum for the provision of MCV services is subject to individual rights, Member States should reassess the need for such individual rights with the objective of incorporating the conditions attached to such rights into a general authorisation as soon as possible and at the latest within three years after adoption of this Recommendation.

               8.

               No later than 12 months after adoption of this Recommendation, Member States should not require any additional authorisation for the use of spectrum made available for the provision of MCV services in their territorial seas if the use of spectrum by the relevant MCV system is already authorised by another Member State, in accordance with its authorisation regime and in compliance with this Recommendation.

               9.

               Member States should consider not requiring an additional authorisation for the use of spectrum in their territorial seas for the provision of MCV services on board vessels of third country nationality, provided that the use of spectrum for the provision of MCV services on such vessels is already authorised by the relevant countries under the same conditions as those set out in Decision 2010/166/EU.

               10.

               Member States that, prior to the adoption of this Recommendation, have granted in the frequency bands or sub-bands made available for operation of MCV systems, exclusive individual rights of use for the provision of land-based mobile electronic communications networks and/or services extending to their territorial seas should, on the occasion of the first review, modification, extension or renewal of such exclusive rights of use, based on either EU or national law, where appropriate, change such rights of use in order to allow for the operation of MCV systems in their territorial seas. Pending such first review, modification, extension or renewal, the Member States concerned should promote the provision of MCV services in their territorial seas on the basis of spectrum trading, spectrum sharing or any other comparable arrangements with the land-based mobile operators enjoying the relevant exclusive rights.

               11.

               Member States should cooperate actively, constructively and in a spirit of solidarity, using existing procedures where appropriate, to manage any issues concerning harmful interference allegedly caused by the operation of MCV systems.

               12.

               Member States should promptly bring issues concerning harmful interference allegedly caused by the operation of an MCV system falling under the jurisdiction of another Member State to the attention of the latter Member State and should inform the Commission. Where appropriate, the Commission should inform the Communications Committee and the Radio Spectrum Committee of the abovementioned issues in order to seek solutions to any difficulties.

               13.

               Member States that have jurisdiction over the MCV systems suspected of interfering harmfully with services in the territory of another Member State should respond and promptly resolve any such interference.

               14.

               Member States should take any appropriate measures in order to ensure that consumers and other end-users are adequately informed about the terms and conditions for the use of MCV services.

               15.

               Member States should keep the use of spectrum for the provision of MCV services under scrutiny, in particular concerning actual or potential harmful interference, and should report their findings to the Commission in order to allow a timely review of this Recommendation if necessary.

      Done at Brussels, 19 March 2010.

            For the Commission

         Neelie KROES

            Vice-President

      (1)  OJ L 108, 24.4.2002, p. 33.

      (2)  OJ L 108, 24.4.2002, p. 21.

      (3)  See page 38 of this Official Journal.

      (4)  OJ L 274, 20.10.2009, p. 25.

      (5)  OJ L 108, 24.4.2002, p. 51.

      (6)  OJ L 91, 7.4.1999, p. 10.