Important legal notice

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52007SC1154

Recommendation for a Council Recommendation to the Czech Republic with a view to bringing an end to the situation of an excessive government deficit Application of Article 104(7) of the Treaty  /* SEC/2007/1154 final */

	[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |Brussels, 12.9.2007SEC(2007) 1154Recommendation for a COUNCIL RECOMMENDATION TO THE CZECH REPUBLICwith a view to bringing an end to the situation of an excessive government deficitApplication of Article 104(7) of the Treaty(presented by the Commission)  EXPLANATORY MEMORANDUM1. BACKGROUNDOn the basis of the Commission services’ spring 2004 economic forecasts[1], which revealed a deficit of 12.9% of GDP for 2003 (5.9% of GDP excluding a major one-off operation related to imputed state guarantees)[2], the Commission initiated the excessive deficit procedure for the Czech Republic with a report in accordance with Article 104(3)[3]. In May 2004, the Czech Republic submitted its first convergence programme, covering the period 2004-2007, and, based on a Commission recommendation, the Council adopted an opinion on it on 5 July 2004[4]. At the same time, the Council decided, on the basis of a Commission recommendation in conformity with Article 104(6) that the Czech Republic had an excessive deficit[5] and consequently, pursuant to Article 104(7), issued a recommendation to the Czech authorities for its correction, also on the basis of a Commission recommendation[6]. In this recommendation, the Council recommended the Czech authorities “ to put an end to the present excessive deficit situation as rapidly as possible ” and “ to take action in a medium-term framework in order to achieve their objective of bringing the deficit below 3% of GDP by 2008 in a credible and sustainable manner, in accordance with the path for deficit reduction specified in the Council Opinion of 5 July 2004 on the convergence programme submitted in May 2004 ” with the following intermediate annual targets: 5.3% of GDP in 2004, 4.7% of GDP in 2005, 3.8% of GDP in 2006 and 3.3% of GDP in 2007.The Czech authorities were also recommended to “ implement with vigour the measures envisaged in the May 2004 convergence programme, in particular a cut in the wage bill of central government and a reduction in spending of individual ministries ”. Further, they were invited to “ allocate higher-than-budgeted revenues to deficit reduction; introduce fiscal targeting based on medium-term expenditure ceilings and to design effective rules to reduce the risk of increasing indebtedness of regions and municipalities; undertake the reform of the pension and healthcare systems to improve the long-term sustainability of the public finances; minimise the negative budgetary impact of the operations of the Czech Consolidation Agency. ”The Council also established the deadline of 5 November 2004 to take effective action regarding the measures envisaged to achieve the 2005 deficit target. After the expiry of this deadline, the Commission concluded, in its Communication to the Council of 14 December 2004, that the Czech Republic had taken effective action regarding the measures envisaged to achieve the 2005 deficit target and hence no further steps under the EDP were required[7]. In its meeting of 18 January 2005, the Council concurred with this assessment.The Council recommendation under Article 104(7) specified that the deficit had to be brought below 3% of GDP by 2008 but did not contain a quantified target for 2008. This is because the May 2004 convergence programme, to which the Council made reference in its recommendation, covered the period until 2007. The November 2005 update of the convergence programme, which extended the programme period to 2008, set a deficit target for 2008 of 2.7% of GDP. In its opinion on this programme, the Council noted that the programme followed the deficit adjustment path set by the Council recommendations under Article 104(7)[8]. It invited the Czech Republic to “ (i) strengthen, in the context of possible better budgetary outcome in 2005 as well as strong growth outcome and prospects, the effort in the structural budgetary adjustment, in view of the small margin below the reference value targeted for 2008 (which is the deadline for the correction of the excessive deficit) and in order to speed up the attainment of the MTO [i.e. the medium-term objective for the budgetary position, defined as a structural deficit of 1% of GDP for the Czech Republic] ; (ii) enhance the quality of budgetary planning, in particular by analysing causes of significant expenditure carryovers and reinforcing the medium-term expenditure ceilings; (iii) improve the long-term sustainability of the public finances, in particular by accelerating the pension reform and undertaking the reform of the healthcare system” .On 15 March 2007, the Czech Republic submitted the most recent update of the convergence programme, for the period 2006-2009. The March 2007 update of the convergence programme contained the following annual deficit projections: 4.0% of GDP for 2007, 3.5% of GDP for 2008 and 3.2% of GDP for 2009. The deficit targets for 2007-2008 were the same as those contained in the budget for 2007, which was approved by parliament on 13 December 2006. The programme also included an additional “declaration of the new government” aiming at implementing a wide range of revenue and expenditure measures (“stabilisation package”) with an estimated deficit-reducing effect of 0.3% of GDP in 2008, thereby reducing the general government deficit to 3.2% of GDP in 2008 (and 2.8% of GDP in 2009). The estimate of the deficit-reducing effect in 2008 seems to be plausible, although considerable uncertainties remain, in particular given the scale of tax reforms. Corresponding measures were approved by the lower house of parliament on 21 August 2007. Their deficit-reducing effect is projected to be expenditure-based and expenditure measures consist mainly of cuts in the social area and reductions in the wage bill. The package also contains corporate and personal income tax cuts (including the introduction of a flat personal income tax rate of 15%). These tax cuts are projected to be fully compensated by VAT increases only in 2008 but deficit-increasing thereafter. Even after the adoption of the stabilisation package, a delay in achieving the medium-term objective (MTO) for the budgetary position, originally targeted for 2012 is implied.The Commission services’ spring 2007 forecast projected that the deficit will reach 3.9% of GDP in 2007 and, on a no-policy change basis, 3.6% of GDP in 2008, indicating that the targets set in the Council recommendation under Article 104(7) for 2007 (3.3% of GDP) and 2008 (below 3% of GDP) will be missed. In structural terms (i.e. in cyclically-adjusted terms net of one-off and other temporary measures), the deficit is likely to widen by 1¼ percentage points of GDP in 2007, after deteriorations in both 2005 and 2006.The debt to GDP ratio has remained at about 30% of GDP on average since 2000 and is anticipated to increase somewhat through the period covered by the March 2007 convergence programme, reaching 32.2% of GDP by 2009, which is broadly in line with the Commission services’ spring 2007 forecasts. In the absence of measures to address the budgetary impact of ageing, the debt ratio is likely to increase significantly over the next decades.The Commission services’ forecast thus essentially concurs with the convergence programme projections, which are inconsistent with a correction of the excessive deficit by the 2008 deadline. In its opinion on the update, adopted on 10 July 2007, the Council concluded its assessment of the programme as follows: “In spite of better growth prospects, and a lower deficit outcome in 2006 than anticipated, the programme postponed the correction of the excessive deficit until 2010, compared with the 2008 deadline set in the July 2004 Council recommendation under Article 104(7). Given the sustained growth, the postponement, which reflects the higher deficit due primarily to planned increases in social expenditure in 2007, would also result in a pro-cyclical expansionary stance of fiscal policy.”The increased expenditure in the 2007 budget has resulted in the previously established medium-term expenditure framework being overshot. The higher 2007 deficit comes against much stronger predicted growth than forecast at the time of the July 2004 Council recommendation under Article 104(7) and is mainly due to increases in social spending decided by the previous parliament and confirmed by the new one in the adopted budget, without countervailing revenue or expenditure measures in other areas. The impact of this additional expenditure is estimated at over 1% of GDP in 2007. It also has to be noted that the higher 2007 deficit is projected to occur against the background of much lower deficits in the preceding years than foreseen in the Council recommendation under Article 104(7): deficit outcomes in 2004-2006 were on average more than 1 percentage point of GDP better than foreseen in the Council recommendation (for 2004: deficit outcome of 2.9% of GDP against Council target of 5.3%; for 2005: 3.6% of GDP compared to 4.7%; and for 2006: 2.9% of GDP compared to 3.8%). This was due mainly to better-than-expected growth rather than durable cuts in expenditure.By consequence, the Council adopted a decision under Article 104(8) on 10 July 2007 stating that “ the action taken by the Czech Republic in response to the Council Recommendation of 5 July 2004 under Article 104(7) of the Treaty is proving to be inadequate to correct the excessive deficit within the deadline [2008] fixed by the Recommendation ”. No unexpected adverse economic events with major unfavourable consequences for government finances as meant in Article 3(5) of Council Regulation (EC) No 1467/97 have occurred since the adoption of the recommendation. On the contrary, developments in the economy relevant for public finances have been significantly more favourable than expected.2. RECOMMENDATION FOR A NEW COUNCIL RECOMMENDATION FOR THE CORRECTION OF THE EXCESSIVE DEFICIT UNDER ARTICLE 104(7)According to the Treaty and the Stability and Growth Pact, a Council decision under Article 104(8) on inadequate action has to be followed by another Council recommendation under Article 104(7) given that the Czech Republic is not participating in the single currency and is therefore not subject to the next steps of the excessive deficit procedure (Article 104(9) and Article 104(11)).According to Article 3(4) of Regulation (EC) No 1467/97, a recommendation made in accordance with Article 104(7) has to specify that effective action is to be taken by the Member State concerned within six months at most and that the correction of the excessive deficit should be completed in the year following its identification unless there are special circumstances. Special circumstances – namely, the size of the deficit and the ongoing structural shift in the economy – were considered to exist when the Council issued its July 2004 recommendation to the Czech Republic under Article 104(7), which allowed for a correction in a medium-term framework, namely by 2008. There is no reason to extend the deadline for the correction of the excessive deficit beyond 2008 given the following considerations:1.  The deficit outturns in the period 2004-2006 were well below the targets underlying the July 2004 Council recommendation under Article 104(7), due mainly to better-than-expected growth. The March 2007 convergence programme was based on an outturn for 2006 substantially worse than the most recent indications (deficit of 3.5% of GDP compared to 2.9%).2.  The principal reason for the postponement of the correction of the excessive deficit indicated in the March 2007 convergence programme is the expansionary budget of 2007, notably substantial increases in social expenditure without countervailing revenue or expenditure measures in other areas. These increases were approved on 13 December 2006 before the new government was confirmed on 19 January 2007. Without the expansionary budget for 2007, the deficit, which reached 2.9% of GDP in 2006, would remain below the 3% of GDP reference value.3.  There is ample opportunity to correct the excessive deficit by the original 2008 deadline. In particular, there continues to be buoyant growth in the Czech economy, higher than anticipated at the time of the July 2004 Council recommendation, and the output gap is in positive territory, so that the country is enjoying 'good times'. Fiscal consolidation would thus be not only conducive to the correction of the excessive deficit but also be appropriate in the current cyclical situation. Also, given that the Czech Republic has a record of achieving lower-than-planned expenditure targets (as e.g. in 2006) and the expansionary 2007 budget has not yet been fully executed, better results could still be attained in 2007. Finally, the March 2007 update of the convergence programme contains a “declaration by the new government” stating the intention to implement a stabilisation package with an estimated fiscal impact of 0.3% of GDP, thus reaching an annual deficit target only slightly above the 3% of GDP threshold in 2008, namely 3.2% of GDP. Corresponding measures have in the meantime been approved by the lower house of parliament. This implies that only a slightly greater effort would be necessary to ensure a deficit below the threshold.Article 3(4) of Regulation (EC) No 1467/97 also specifies that in a recommendation to a Member State to correct an excessive deficit, the Council should request the achievement of a minimum annual improvement in the structural balance of at least 0.5% of GDP as a benchmark. In view of the advanced state of implementation of the expansionary budget for 2007, the structural balance will deteriorate significantly in 2007 rather than improve. The size of this deterioration should be contained as much as still possible. Furthermore, on the basis of the Commission services' spring 2007 forecast, bringing the deficit in 2008 below the 3% of GDP threshold value would require an improvement in the structural balance of at least 1% of GDP compared to 2007.Table 1: Deficit projections and growth forecastsAnnual deficit projections (% of GDP) | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |Commission services' spring 2007 forecast | 2.9 | 3.6 | 2.9 | 3.9 | 3.6 | - |March 2007 Convergence Programme | - | 3.6 | 3.5 | 4.0 | 3.5 | 3.2 |March 2007 Convergence Programme (alternative deficit targets in the declaration by the new government) | - | 3.6 | 3.5 | 4.0 | 3.2 | 2.8 |November 2005 Convergence Programme | 3.0 | 3.6 | 3.5 | 3.3 | 2.7 | - |July 2004 Council Recommendation | 5.3 | 4.7 | 3.8 | 3.3 | < 3 | - |GDP growth forecasts (% y-o-y) | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |Commission services' spring 2007 forecast | 4.2 | 6.1 | 6.1 | 4.9 | 4.9 | - |March 2007 Convergence Programme | - | 6.0 | 6.0 | 4.9 | 4.8 | 4.8 |November 2005 Convergence Programme | 4.4 | 4.8 | 4.4 | 4.2 | 4.3 | - |July 2004 Council Recommendation | 2.8 | 3.1 | 3.3 | 3.5 | - | - |Table 2: Comparison of key macroeconomic and budgetary projections2006 | 2007 | 2008 | 2009 |Real GDP (% change) | CP Mar 2007 | 6.0 | 4.9 | 4.8 | 4.8 |COM May 2007 | 6.1 | 4.9 | 4.9 | n.a. |CP Nov 2005 | 4.4 | 4.2 | 4.3 | n.a. |HICP inflation (%) | CP Mar 2007 | 2.4 | 2.6 | 2.5 | 2.5 |COM May 2007 | 2.1 | 2.4 | 2.9 | n.a. |CP Nov 2005 | 2.2 | 2.0 | 2.1 | n.a. |Output gap (% of potential GDP) | CP Mar 20071 | 0.9 | 1.1 | 1.0 | 1.0 |COM May 20073 | 0.4 | 0.5 | 0.5 | n.a. |CP Nov 20051 | -0.1 | 0.3 | 0.8 | n.a. |General government balance (% of GDP) | CP Mar 20076 | -3.5 | -4.0 | -3.5 | -3.2 |COM May 2007 | -2.9 | -3.9 | -3.6 | n.a. |CP Nov 2005 | -3.8 | -3.3 | -2.7 | n.a. |Primary balance (% of GDP) | CP Mar 2007 | -2.4 | -2.6 | -2.0 | -1.6 |COM May 2007 | -1.8 | -2.8 | -2.6 | n.a. |CP Nov 2005 | -3.0 | -2.4 | -1.7 | n.a. |Cyclically-adjusted balance (% of GDP) | CP Mar 20071 | -3.9 | -4.4 | -3.9 | -3.5 |COM May 2007 | -3.1 | -4.1 | -3.8 | n.a. |CP Nov 20051 | -3.8 | -3.4 | -3.0 | n.a. |Structural balance2 (% of GDP) | CP Mar 20075 | -3.9 | -4.4 | -3.9 | -3.5 |COM May 20074 | -2.8 | -4.1 | -3.8 | n.a. |CP Nov 2005 | -3.8 | -3.4 | -3.0 | n.a. |Government gross debt (% of GDP) | CP Mar 2007 | 30.6 | 30.5 | 31.3 | 32.2 |COM May 2007 | 30.4 | 30.6 | 30.9 | n.a. |CP Nov 2005 | 37.1 | 37.9 | 37.8 | n.a. |Notes: |1Commission services calculations on the basis of the information in the programme. |2Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures. |3Based on estimated potential growth of 4.2%, 4.6%, 4.8% and 4.9% respectively in the period 2005-2008. |4 One-off and other temporary measures taken from the Commission services' spring 2007 forecast (0.3% of GDP in 2006 - deficit-increasing) |5 One-off and other temporary measures taken from the CP 2007 programme. |6Alternative deficit targets based on the stabilisation package of the Czech government: 3.2% of GDP in 2008, 2.8% of GDP in 2009. |Source: |Convergence programme (CP); Commission services’ spring 2007 forecasts (COM); Commission services’ calculations |Recommendation for a COUNCIL RECOMMENDATION TO THE CZECH REPUBLICwith a view to bringing an end to the situation of an excessive government deficitApplication of Article 104(7) of the TreatyTHE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community, and in particular Article 104(7) thereof,Having regard to the recommendation from the Commission,Whereas:4.  According to Article 104 of the Treaty, Member States are to avoid excessive government deficits.5.  The Stability and Growth Pact is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth conducive to employment creation. The Stability and Growth Pact includes Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure (EDP)[9] which was adopted to further the prompt correction of excessive general government deficits.6.  By Council Decision 2005/185/EC[10] of 5 July 2004, it was decided, following a recommendation from the Commission in accordance with Article 104(6) of the Treaty, that an excessive deficit existed in the Czech Republic.7.  On 5 July 2004, in accordance with Article 104(7) of the Treaty and Article 3(4) of Regulation (EC) No 1467/97, the Council, based on a recommendation from the Commission, adopted a recommendation to the Czech authorities with a view to bringing the excessive deficit situation to an end as rapidly as possible and to taking action in a medium-term framework to achieve the objective of bringing the deficit below 3% of GDP by 2008 in a credible and sustainable manner, in accordance with the path for deficit reduction specified in the convergence programme submitted by the authorities in May 2004 and endorsed in the Council Opinion of 5 July 2004[11], with the following intermediate annual targets: 5.3% of GDP in 2004, 4.7% of GDP in 2005, 3.8% of GDP in 2006, 3.3% of GDP in 2007. The Council established the deadline of 5 November 2004 to take effective action "regarding the measures envisaged to achieve the 2005 deficit target". The Czech Republic agreed to make the recommendation public[12].8.  On 10 July 2007, the Council adopted a decision in accordance with Article 104(8) stating that the action taken by the Czech Republic in response to the Council recommendation of 5 July 2004 under Article 104(7) was proving to be inadequate to correct the excessive deficit by 2008[13]. The decision was based on the deficit for 2007 being projected in the Commission services' spring 2007 forecast to be well above the target set in the Council recommendation of 5 July 2004 and the 2008 deficit clearly exceeding on current policies the 3% of GDP reference value, with developments in the economy relevant for public finances having been significantly more favourable than expected since the adoption of the recommendation (in particular, much better-than-expected budgetary outturns for the period 2004-2006 and an upward revision of growth prospects). In its opinion on the March 2007 convergence programme, the Council concluded that the planned postponement of the correction of the excessive deficit reflected the planned expansionary fiscal stance in 2007, primarily due to discretionary increases in social expenditure without countervailing revenue or expenditure measures in other areas[14].9.  The Czech Republic is currently a Member State with a derogation within the meaning of Article 122(1) of the Treaty, which means that it shall avoid excessive deficits but that Articles 104(9) and Article 104(11) of the Treaty do not apply to it; further recommendations can be addressed to the Czech Republic only on the basis of Article 104(7).10.  According to Article 3(4) of Regulation (EC) No 1467/97, a recommendation made in accordance with Article 104(7) has to specify that effective action is to be taken by the Member State concerned within six months at most and that the correction of the excessive deficit should be completed in the year following its identification unless there are special circumstances.11.  Special circumstances – namely, the size of the deficit and the ongoing structural shift in the economy – were considered to exist when the Council issued its July 2004 recommendation to the Czech Republic under Article 104(7), which allowed for a correction in a medium-term framework, namely by 2008. Given that the deficit outturns in the period 2004-2006 were well below the targets underlying the July 2004 Council recommendation under Article 104(7) and the Czech economy continues to enjoy very high growth (higher than anticipated at the time of the recommendation), there is no reason to extend the deadline for the correction of the excessive deficit.12.  According to the March 2007 update of the convergence programme, covering the period 2006-2009, the deficit is targeted to widen to 4.0% in 2007 owing to discretionary increases in social spending decided by the previous parliament and confirmed by the new one with the 2007 budget. The deficit targets for 2008 and 2009 in the update were 3.5% and 3.2% of GDP. The Commission services’ spring 2007 forecast indicated that the deficit would widen to 3.9% of GDP in 2007 and narrow in 2008, on a no-policy change basis, to 3.6% of GDP. In structural terms, the deficit would deteriorate by 1¼ percentage points of GDP in 2007 (after deteriorations in both 2005 and 2006) and improve, on a no-policy change basis, by ¼ percentage point in 2008. In the meantime, a "stabilisation package" has been adopted, which was already indicated in the update of the convergence programme, and is estimated by the Czech authorities to have a deficit-reducing effect of approximately 0.3% of GDP in 2008, thereby narrowing the deficit to 3.2% of GDP in 2008 (and 2.8% in 2009). The estimated deficit-reducing effect in 2008 seems to be plausible, although considerable uncertainties remain, in particular given the scale of tax reforms. The deficit-reducing effect is projected to be expenditure-based and expenditure measures consist mainly of cuts in the social area and reductions in the wage bill. The package also contains corporate and personal income tax cuts that are projected to be compensated by VAT increases only in 2008 but are deficit-increasing thereafter. Even after the adoption of the "stabilisation package" a delay in achieving the medium-term objective (MTO) for the budgetary position, a structural deficit of 1% of GDP, originally targeted for 2012, is implied.13.  Article 3(4) of Regulation (EC) No. 1467/97 also specifies that in a recommendation to a Member State to correct an excessive deficit the Council should request the achievement of a minimum annual improvement in the structural balance (i.e. the cyclically-adjusted deficit net of one-off and other temporary measures) of at least 0.5% of GDP as a benchmark. In view of the advanced state of implementation of the expansionary budget for 2007, the structural balance will deteriorate significantly in 2007 rather than improve. The size of this deterioration should be contained as much as still possible. Furthermore, on the basis of the Commission services' spring 2007 forecast, bringing the deficit in 2008 below the 3% of GDP threshold value would require an improvement in the structural balance of at least 1% of GDP compared to 2007.14.  The debt to GDP ratio has remained at about 30% of GDP on average since 2000 and is anticipated to increase somewhat through the period covered by the March 2007 convergence programme, reaching 32.2% of GDP by 2009, which is broadly in line with the Commission services’ spring 2007 forecasts. In the absence of measures to address the budgetary impact of ageing, the debt ratio is likely to increase significantly over the next decades.15.  In general, budgetary consolidation measures should secure a lasting improvement in the general government balance, while being geared towards enhancing the quality and the long-term sustainability of public finances and reinforcing the growth potential of the economy.HEREBY RECOMMENDS:1. The Czech authorities should limit the budgetary deterioration in 2007 and put an end to the excessive deficit situation as rapidly as possible and by 2008 at the latest. The Council establishes the deadline of [9 April 2008] for the Czech authorities to take effective action to this end.2. The Czech authorities should bring the general government deficit below the 3% of GDP reference value in a credible and sustainable manner. To this end, on the basis of current projections they should ensure an improvement in the structural balance (i.e. the cyclically-adjusted balance net of one-off and other temporary measures) of at least 1% of GDP in 2008 compared to 2007.In addition, the Council invites the Czech Republic to ensure that budgetary consolidation towards its medium-term objective (MTO) for the budgetary position of a structural deficit of 1% of GDP is sustained after the excessive deficit has been corrected and to achieve the MTO by the original deadline of 2012 at the latest.This recommendation is addressed to the Czech Republic.Done at Brussels,For the CouncilThe President[1] The Commission services’ spring 2004 economic forecast took into consideration data reported by the Czech Republic in March 2004.[2] In the meantime, the deficit figure for 2003 has been revised, according to the usual procedures. It now stands at 6.6% of GDP.[3] SEC(2004) 575.[4] OJ C 320, 24.12.2004, p. 1.[5] OJ L 62, 9.3.2005, p. 20.[6] See http://register.consilium.eu.int/pdf/en/04/st11/st11215.en04.pdf.[7] Communication from the Commission to the Council: The action taken by the Czech Republic, Cyprus, Malta, Poland and Slovakia in response to the Council recommendations under the excessive deficit procedure, SEC(2004) 1630, 22.12.2004.[8] OJ C 55, 7.3.2006, p. 5.[9] OJ L 209, 2.8.1997, p. 6. Regulation as amended by Regulation (EC) No 1056/2005 (OJ L 174, 7.7.2005, p. 5).[10] OJ L 62, 9.3.2005, p. 20.[11] OJ C 320, 24.12.2004, p. 1.[12] See http://register.consilium.eu.int/pdf/en/04/st11/st11215.en04.pdf.[13] Council decision Art. 104.8 adopted on 10.7.2007.[14] Council opinion adopted on 10.7.2007.


Avis juridique important

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52001SC1181

Recommendation for a Council Decision authorising the Commission to negotiate on behalf of the European Community, within the competent bodies of the Council of Europe, on a draft Convention on information and legal cooperation on information society services  /* COM/2001/1181 final */

Recommendation for a COUNCIL DECISION authorising the Commission to negotiate on behalf of the European Community, within the competent bodies of the Council of Europe, on a draft Convention on information and legal cooperation on information society services(presented by the Commission)EXPLANATORY MEMORANDUM1. In the course of 2001, the Committee of Ministers of the Council of Europe will be called upon to examine and adopt a draft Convention on information and legal cooperation on "information society services", along the lines of Directive 98/48 [1].[1]  Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998 amending Directive 98/34/EC laying down a procedure for the provision of information in the field of technical standards and regulations. Subsequent to this amendment, Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 is now entitled "Directive of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services".2. By extending the scope of Directive 98/34/EC (relating to products), this Directive set up a system of prior notification and administrative cooperation between the Member States of the European Union on draft national legislation targeted specifically at information society services (i.e. services provided remotely, by electronic means and upon request). Operational since August 1999, this Directive has up till now been an effective mechanism for prior information and administrative dialogue in a regulatory context (that of on-line services) which is in constant flux and concerns activities which are eminently cross-border in nature.3. The objective of the Council of Europe Convention is to set up for information society services, on the basis of the model of regulatory transparency provided by Directive 98/34, as amended by Directive 98/48, a system of prior information and cooperation open to a large number of participating countries, but at the same time adapted to the context of the Council of Europe. In particular, the system proposed by the Convention would be more flexible than that established by the EC Directive, in so far as, while referring to the same field, the mandatory prior notification would not be accompanied by a standstill period (blockage).4. The interest of the EC and its Member States in participating in such a Convention derives from the fact that the proposed system would allow them to be regularly informed about regulatory initiatives being prepared in other countries and then, if appropriate, to express their observations on drafts which would have grave legal and economic implications in the on-line context, with particular reference to the exercise of fundamental freedoms and rights (inter alia for Community citizens or undertakings operating in third countries).5. In practice, this participation would be based on the operational mechanism set up in 1983 by Directive 83/189 (amended on several occasions and then codified by Directive 98/34). In particular, in order to achieve maximum simplification of the internal procedures of the EC, the Commission would send the Council of Europe the notifications on services which it already receives from each Member State and forwards to the 14 other Member States under Directive 98/34. The Community will therefore have to ensure that the scope of the future Convention remains in parallel with that of Directive 98/34 as regards draft national regulations targeted specifically at information society services, in particular in order to avoid any additional notification burden on Member States over and above that incumbent on them by virtue of Directive 98/34, as amended by Directive 98/48. The Community will, moreover, endeavour to ensure that each state party to the convention notifies draft regulations at all relevant national levels - whether this be federal or regional - in order to guarantee that the objective of the convention is effectively achieved."RECOMMENDATION6. It is therefore recommended that the Council decide- to authorise the Commission to negotiate with the Council of Europe on a draft European Convention on information and legal cooperation on information society services. The Commission will conduct these negotiations in consultation with the special committee appointed by the Council to assist it in this task and in accordance with the attached negotiating guidelines;- to entrust the Commission with ensuring on-site coordination with the Member States, so as to guarantee the effectiveness of the Community's negotiating position.ANNEX: NEGOTIATING GUIDELINES1. The objective of the negotiations is to ensure that the Council of Europe's Convention on information and legal cooperation on information society services makes it possible to set up, in the field concerned, a mandatory system of prior regulatory information (without a standstill period) and a mechanism for regular administrative cooperation with third countries, along the lines of Directive 98/34, as amended by Directive 98/48.2. In the discussions with the Council of Europe, the Commission must ensure, in particular- that the scope of the future Convention remains in parallel with that of Directive 98/34 as regards draft national regulations targeted specifically at information society services, in particular in order to avoid any additional notification burden on Member States over and above that already incumbent on them by virtue of Directive 98/34, as amended by Directive 98/48;- that the Convention takes full account of the specific situation of the European Community, so as to allow the full participation of the Community, as a contracting party, in the decision-making process set up by the Convention.Financial statement1. Title of the operationRecommendation for a Council Decision authorising the Commission to negotiate a draft Convention of the Council of Europe on information and legal cooperation on information society services2. Budget headings involvedA-110 "Officials and temporary staff holding a post provided for in the establishment plan"A-50 Information technology3. Legal basisArticle 133 EC4. Description of operation4.1. General objectiveThe purpose of the future Convention concerned is to set up within the Council of Europe a mechanism for regulatory transparency on national drafts relating to information society services, broadly based on Directive 98/48/EC.By extending the scope of Directive 98/34/EC (relating to products), this Directive provides for the prior notification of draft regulations in each of the 15 EC Member States targeted specifically at information society services (i.e. activities carried out remotely, by electronic means and at the request of the recipient: in other words, on-line interactive activities). Under the Directive, subsequent to this notification, there is a standstill period (of at least three months) during which the draft notified may not be adopted at national level.The mechanism envisaged by the draft Convention of the Council of Europe should reproduce, on a wider geographical scale but in a less restrictive fashion (prior notification but without the application of standstill periods), the system already set up at EC level by Directive 98/48/EC on information society services.The Commission recommends that the Council decide to authorise the Commission to negotiate on the aforementioned Convention, since Community participation in such an international system of administrative cooperation would have the significant advantage for the Commission and the 15 EC Member States of receiving systematic prior information on regulatory initiatives in preparation in third countries (with, moreover, the possibility of being able to draw up their observations on the drafts received) in a field - that of information society services - which is in constant regulatory flux and has wide-ranging cross-border implications.4.2. Period covered and arrangements for renewalThe Convention does not lay down a time-limit for its application. However, it does provide for the possibility of subsequent amendment of its scope.5. Classification of expenditure5.1. NCE (non-compulsory expenditure)5.2. NDA (non-differentiated appropriations)6. Type of expenditure100 %7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE7.1. Impact on human resources>TABLE POSITION>The transmission and reception of regulatory drafts between the Commission and the Secretariat of the Council of Europe will be carried out under the framework of the administrative mechanism of Directive 98/34, which has already been operational at EC level since 1983.The number of drafts from third countries can reasonably be expected to be some 60 per year.The Enterprise DG will be responsible for:- coordination of the analysis of the drafts by the other Commission departments concerned (essentially the Information Society DG and the Internal Market DG);- coordination of the comments of the texts from third countries and the comments made by Member States on the texts from Member States of the Community;- management of the database and transmission of the messages.The staff required for this activity will be provided by redeployment within DG Enterprise.7.2. Overall financial impact of human resources>TABLE POSITION>The amounts are total expenditure for 12 months.7.3. Other administrative expenditure deriving from the action>TABLE POSITION>The amounts are total expenditure for 12 months.I. Annual total (7.2 + 7.3)II. Duration of actionIII. Total cost of action (I x II)  //  EUR171 000UnlimitedThere will be an increase in two kinds of operating expenditure:Translation costsThe Commission can expect a fair number of texts to be notified because of the field involved, which is in constant flux. One can envisage an average of 60 notifications per year. In about 10% of cases, a translation will have to be requested.Assuming that the texts are some ten pages long on average, one can expect between 60 and 100 pages of translation per year, at an annual cost of EUR4 000 (100 pages at EUR40/page). This amount is to be funded from the existing budget of DG Enterprise.Computer costsAn application will have to be developed for the automatic transmission of the Member States' texts to the Council of Europe.Setting up such an application by adapting the existing application administering the current Community system, and running it, will require about 10 days work per year, or an annual amount of EUR5 000 (10 days at EUR500/day). This amount will funded from the existing computer budget of DG Enterprise.8. Fraud prevention measuresNone (in the absence of follow-up actions and studies)9. Elements of cost-effectiveness analysis9.1. Specific and quantified objectives and target populationThe objective of the Council of Europe Convention is to establish at international level a system of prior information and cooperation, complementary to that set up at Community level by Directive 98/48, with regard to information society services.The potential geographical coverage of this Convention would be fairly vast because of its extension to a large number of countries: the 41 member countries of the Council of Europe, but also the European Community, the non-member countries which participated in drawing it up, and any non-member country which might subsequently be invited to accede to it.9.2. Grounds for the operationThe interest of the EC and its Member States in participating in such a Convention derives from the fact that the proposed system would allow them to be regularly informed about regulatory initiatives being prepared in other countries and then, if appropriate, to express their observations on drafts which would have grave legal and economic implications in the on-line context, with particular reference to the exercise of fundamental freedoms and rights (inter alia for Community citizens or undertakings operating in third countries).As things stand, there is a need for such a mechanism for regular information in this increasingly important field.9.3. Monitoring and evaluation of the operationIn practice, this participation would be based on the operational mechanism set up in 1983 by Directive 83/189 (amended on several occasions and then codified by Directive 98/34).In particular, in order to achieve maximum simplification of the internal procedures of the EC, the Commission would send the Council of Europe the notifications on services which it already receives from each Member State and forwards to the 14 other Member States under Directive 98/34.Overall, the Convention will be a simple but valuable tool for assessing trends in the regulatory panorama and an instrument for administrative cooperation in the field of on-line activities, which is constantly expanding.


Avis juridique important

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32003H0054

Council Recommendation of 2 December 2002 on the prevention of smoking and on initiatives to improve tobacco control

Official Journal L 022 , 25/01/2003 P. 0031 - 0034

Council Recommendationof 2 December 2002on the prevention of smoking and on initiatives to improve tobacco control(2003/54/EC)THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community, and in particular Article 152(4), second subparagraph thereof,Having regard to the proposal from the Commission(1),Whereas:(1) Article 152 of the Treaty stipulates that Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health.(2) The resolution of the Council and the Ministers for Health of the Member States, meeting within the Council of 18 July 1989 on banning smoking in places open to the public(2), provided guidelines to the Member States for the protection of non-smokers from environmental tobacco smoke. Following a Report from the Commission on the response from the Member States to this initiative(3), the present recommendation reinforces such protection and identifies particularly vulnerable groups.(3) The Council Resolution of 26 November 1996 on the reduction of smoking in the European Community(4) recognised the need for the development of an effective strategy on combating tobacco consumption, which includes certain of the elements contained in this recommendation.(4) The Council Conclusions of 18 November 1999 on combating tobacco consumption(5) underlined the necessity for developing an overall strategy, which includes some of the measures outlined in the present recommendation for the protection of minors (rules for selling conditions, sales through electronic means and vending machines).(5) The Council Resolution of 29 June 2000 on action on health determinants(6) took note of the results of the debates held at the European Conference on health determinants in the European Union held at Evora on 15 and 16 March 2000, which placed particular emphasis, inter alia, on tobacco and which recommended a series of practical and targeted steps to address the challenges in these areas.(6) The recommended actions are necessary against a background of 500000 smoking related deaths annually in the European Community and a worrying increase in the number of children and adolescents who take up smoking. Smoking is damaging human health, as smokers become addicted to nicotine and suffer fatal and disabling diseases such as cancers of the lung and other organs, ischaemic heart disease and other circulatory diseases, and respiratory diseases such as emphysema.(7) Smoking prevention and tobacco control are already priority objectives in the public health policies of Member States and the European Community. Nevertheless, smoking remains the biggest form of preventable death in the European Union, and progress in reducing tobacco consumption and smoking incidence is still disappointing. Moreover, the advertising, marketing, and promotion strategies used by the tobacco industry foster tobacco consumption, thereby increasing the already high mortality and morbidity caused by the use of tobacco products. Some of these strategies appear to be targeting young people in their educational years, in order to replace the large number of smokers who die annually. It is in fact established that 60 % of smokers start the habit before 13 years of age, and 90 % before 18.(8) Through the Europe Against Cancer programme(7), the European Community has set as one of its objectives a contribution to the improvement of the health of its citizens by reducing the number of cases of cancer and other diseases related to smoking.(9) Directive 2001/37/EC of the European Parliament and of the Council of 5 June 2001 on the manufacture, presentation and sale of tobacco products(8) and the proposal for a Directive on advertising and sponsorship of tobacco products(9) deal with tobacco control in the context of the completion and consolidation of the internal market and the abolition of obstacles to its smooth operation, while taking as a basis a high level of public health protection.(10) Certain measures that should be part of a comprehensive tobacco control policy, such as a prohibition of billboard and poster advertising, or of advertising in cinemas, cannot presently be subject to harmonisation under the Community internal market rules in a separate tobacco measure.(11) All the above facts highlight the need for a comprehensive approach towards tobacco control, with a view to reducing the incidence of smoking-induced diseases in the Community.(12) In the context of a comprehensive tobacco control policy, it is essential to adopt measures aimed particularly at reducing demand for tobacco products by children and adolescents. Such measures may include actions aimed at reducing the supply of tobacco to children and adolescents, and at prohibiting certain kinds of advertising, marketing and promotion strategies for tobacco products, taking into account that such strategies impact indiscriminately on young people and other age groups.(13) Certain forms of sales and distribution of tobacco products facilitate the access by children and adolescents to these products, and should therefore be regulated by Member States.(14) Given that vending machines are visible to consumers and non-consumers alike, they should not carry advertising other than what is strictly necessary for indicating the products sold.(15) Two other important measures at European Community level address the advertising and the sponsorship of tobacco products. The 1989 Television Without Frontiers Directive(10) bans all forms of television advertising for tobacco products and provides that television programmes may not be sponsored by natural or legal persons whose principal activity is the manufacture or sale of tobacco products. The current proposal for a Directive on advertising and sponsorship of tobacco products foresees a ban of tobacco advertising in the press and in other printed publications, in the radio and through information society services. This proposal also foresees a ban on sponsorship by tobacco companies of radio programmes, and of events involving or taking place in several Member States or otherwise having cross-border effects.(16) This recommendation addresses other types of advertising, marketing and promotion practices used by the industry to promote tobacco consumption, which can indiscriminately reach children and adolescents. Such practices include the use of tobacco brand names on non-tobacco products or services (brand-stretching) and/or clothes (merchandising), the use of promotional items (such as ordinary objects like ashtrays, lighters, parasols and other similar objects) and of tobacco samples, the use and communication of sales promotion (such as a discount, a free gift, a premium or an opportunity to participate in a promotional contest or game), the use of billboards, posters and other indoor or outdoor advertising techniques (such as advertising on tobacco vending machines), the use of tobacco advertising in cinemas, as well as any other forms of advertising, sponsorship or practices directly or indirectly addressed to promote tobacco products. In fact, Member States authorities should adopt appropriate legislative and/or administrative measures specifically to prohibit, in accordance with national constitutions or constitutional principles, such activities, which constitute means of promoting tobacco products while circumventing bans on direct tobacco advertising already in force for certain media.(17) The World Health Organisation and the World Bank recommend that countries prohibit all forms of tobacco advertising and promotion. In cases where only certain forms of direct tobacco advertising are prohibited, the tobacco industry frequently shifts its advertising expenditure to other marketing, sponsorship and promotion strategies, using creative and indirect ways to promote tobacco products, especially with young people. In this way, the effect of partial advertising bans on tobacco consumption may be limited. Moreover, the World Bank has concluded that advertising increases cigarette consumption and that legislation banning advertising would reduce consumption provided that it is comprehensive, covering all media and uses of brand names and logos. Such a reduction in cigarette consumption would have immediate short-term and long-term benefits for public health. Information on the global expenditure of the tobacco industry on the promotion of tobacco products is therefore an important prerequisite for monitoring the effectiveness of tobacco control policies from a public health perspective. Such information makes it possible to determine whether restrictions imposed are being circumvented, particularly by the diversion of budgets towards new or unrestricted forms of promotion. Regular declaration of such expenditure should be required of the tobacco industry.(18) Given the health risks associated with passive smoking, Member States should aim to protect smokers and non-smokers from environmental tobacco smoke.(19) Member States should continue developing strategies and measures to reduce the prevalence of smoking, such as strengthening health education programmes to improve understanding of the risks of smoking as well as other prevention programmes to discourage smoking.(20) The World Health Organisation's Framework Convention on Tobacco Control, which is currently being negotiated, addresses many of the issues dealt with in the present recommendation. It is therefore important to ensure that the measures contained in this recommendation are consistent with the draft elements of the FCTC presently under discussion,HEREBY RECOMMENDS THAT MEMBER STATES:1. adopt appropriate legislative and/or administrative measures in accordance with national practices and conditions to prevent tobacco sales to children and adolescents, including, inter alia:(a) requiring vendors of tobacco products to establish that tobacco purchasers have reached the age for purchase of such products required in national law, where such an age limit exists,(b) removing tobacco products from self-service displays in retail outlets,(c) restricting the access to tobacco vending machines to locations accessible to persons over the age set for purchase of tobacco products in national law, where such an age limit exists, or otherwise regulating the access to the products sold through such machines in an equally effective way,(d) restricting tobacco distance sales for general retail, such as sales via the Internet, to adults by using adequate technical means,(e) prohibiting the sale of sweets and toys intended for children and manufactured with the clear intention that the product and/or packaging would resemble in appearance a type of tobacco product,(f) prohibiting the sale of cigarettes individually or in packets of fewer than 19 cigarettes;2. adopt appropriate legislative and/or administrative measures to prohibit, in accordance with national constitutions or constitutional principles, the following forms of advertising and promotion:(a) the use of tobacco brand names on non-tobacco products or services,(b) the use of promotional items (ashtrays, lighters, parasols, etc.) and tobacco samples,(c) the use and communication of sales promotion, such as a discount, a free gift, a premium or an opportunity to participate in a promotional contest or game,(d) the use of billboards, posters and other indoor or outdoor advertising techniques (such as advertising on tobacco vending machines),(e) the use of advertising in cinemas, and(f) any other forms of advertising, sponsorship or practices directly or indirectly addressed to promote tobacco products;3. adopt appropriate measures, by introducing legislation or by other methods in accordance with national practices and conditions, in order to require manufacturers, importers and large-scale traders in tobacco products and in products and services bearing the same trademark as tobacco products to provide Member States with information concerning the expenditure they incur on advertising, marketing, sponsorship and promotion campaigns not prohibited under national or Community legislation;4. implement legislation and/or other effective measures in accordance with national practices and conditions at the appropriate governmental or non-governmental level that provide protection from exposure to environmental tobacco smoke in indoor workplaces, enclosed public places, and public transport. Priority consideration should be given to, inter alia, educational establishments, health care facilities and places providing services to children;5. continue developing strategies and measures to reduce the prevalence of smoking, such as strengthening overall health education, particularly in schools, and general programmes to discourage the initial use of tobacco products and to overcome tobacco addiction;6. make full use of young people's contributions to youth health-related policies and actions, especially in the field of information, and encourage specific activities which are initiated, planned, implemented and evaluated by young people;7. adopt and implement appropriate price measures on tobacco products so as to discourage tobacco consumption;8. implement all necessary and appropriate procedures to verify compliance with the measures set out in this recommendation;9. inform the Commission every two years of action taken in response to this recommendation,HEREBY INVITES THE COMMISSION:1. to monitor and assess the developments and the measures undertaken in the Member States and at Community level;2. to report on the implementation of the proposed measures, on the basis of the information provided by Member States, not later than one year after receipt of Member States' information submitted in accordance with this recommendation;3. to consider the extent to which the measures set out in this recommendation are working effectively, and to consider the need for further action, particularly if internal market disparities are identified in the areas covered by this recommendation.Done at Brussels, 2 December 2002.For the CouncilThe PresidentB. Bendtsen(1) Proposal of 18 June 2002 (not yet published in the Official Journal).(2) OJ C 189, 26.7.1989, p. 1.(3) COM(96) 573 final.(4) OJ C 374, 11.12.1996, p. 4.(5) OJ C 86, 24.3.2000, p. 4.(6) OJ C 218, 31.7.2000, p. 8.(7) OJ L 95, 16.4.1996, p. 9.(8) OJ L 194, 18.7.2001, p. 26.(9) OJ C 270, 25.9.2001, p. 97.(10) OJ L 298, 17.10.1989, p. 23.


Important legal notice

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52005SC0150

Recommendation for a Council opinion in accordance with the third paragraph of Art. 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Italy 2004-2008  /* SEC/2005/0150 final */

	Brussels, 2.2.2005SEC(2005) 150 finalRecommendation for aCOUNCIL OPINIONin accordance with the third paragraph of Art. 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Italy 2004-2008(presented by the Commission)EXPLANATORY MEMORANDUMCouncil Regulation (EC) No. 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[1] stipulates that participating Member States, that is, those which have adopted the single currency, had 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 assessments prepared by the Commission and the Committee set up by Article 114 of the Treaty (the Economic and Financial Committee). On the basis of a recommendation from the Commission and after having consulted the Economic and Financial Committee, the Council delivered an opinion, following its examination of the programme. According to the Regulation, Member States need to submit annual updates of their stability programmes, which may also be examined by the Council in accordance with these same procedures.The first stability programme of Italy, covering the period 1998-2001, was submitted on 22 December 1998 and assessed by the Council on 8 February 1999. Updates were presented every following year. Italy submitted the most recent update of its stability programme on 1 December 2004. The Commission services have carried out a technical evaluation of this update, taking into account the results of the Commission services Autumn 2004 economic forecasts, and having regard to the code of conduct[2], the commonly agreed methodology for the estimation of potential output and cyclically-adjusted balances, the recommendations in the Broad Economic Policy Guidelines for the period 2003-2005 and the principles laid down in the Communication from the Commission to the Council and the European Parliament of 27 November 2002 on strengthening the coordination of budgetary policies[3]. This evaluation warrants the following assessment:-  The programme complies partly with the data requirements of the “code of conduct on the content and format of stability and convergence programmes”. For the years 2006 and beyond only the size of the future fiscal correction is indicated not its composition and the breakdown of the budget is not consistent with the budgetary targets presented in the programme.-  The macroeconomic scenario presented in the programme portrays a gradual and domestic-demand-driven acceleration of economic activity up until 2006 when real GDP growth is expected to stabilise at around 2.3% per year. The scenario incorporates the information set available at around mid-year 2004. Developments emerging after the presentation of the medium-term economic and financial framework ( Documento di programmazione economico-finanziaria – DPEF ) at the end of July 2004 are not reflected. As a result, the short-term growth assumption would appear to be somewhat favourable compared to the Commission 2004 autumn forecast. The same holds for the medium-term outlook. Based on Commission services calculations according to the commonly agreed methodology potential output growth is estimated at around 1¾ % per year as opposed to 1¼ % in the Commission 2004 autumn forecast.-  The programme aims at gradually reducing the nominal budget deficit from an expected outturn of 2.9% of GDP in 2004, via a deficit target of 2.7% of GDP in 2005 to 0.9% of GDP in 2008. Hence, the programme does no longer target a medium term close to balance or in surplus position. Compared to the previous update the deficit figures are more than one percentage point higher and the planned adjustment is back-loaded against a somewhat less favourable macroeconomic scenario. However, since the cyclical conditions, as measured by the output gap, are almost unchanged the largest part of the revision of the deficit can be taken to be structural.-  In cyclically-adjusted terms the budget balance is projected to improve by 1.1 percentage points over the programme period, with the bulk of the adjustment (0.5 percentage point) expected to take place in 2006. No improvement in cyclically-adjusted terms is expected in 2005.-  The assessment of the stability programme highlights clear risks that the budgetary outcome could be worse than projected in the programme. The budgetary objectives are built upon a somewhat favourable macroeconomic outlook, especially in 2005. In parallel, there are several uncertainties linked to the implementation of the 2005 budget including the classification of ANAS, the company in charge of road maintenance, as well as of a number of temporary revenue increasing measures. Further uncertainties refer to 2006, the year in which the largest improvement in cyclically-adjusted terms is projected to take place and when the Government plans to fully replace one-off measures with measures of a permanent nature. The programme does not provide information about how the adjustment is expected to be achieved. Given past experience, it cannot be excluded that in the years 2006 and beyond the gap between the unchanged legislation deficit and the deficit target presented in the programme underestimates the required fiscal consolidation.-  Overall, the budgetary targets in the programme do not provide a sufficient safety margin against breaching the 3% of GDP threshold with normal cyclical fluctuations at least up until 2006. In view of the downside risks to the macroeconomic scenario as well as the risks attached to the implementation of the 2005 budget, additional measures may be required to achieve the nominal deficit target and, more specifically, to prevent the nominal deficit to exceed the 3% of GDP reference value in 2005. Additional measures may also be required in 2006 and beyond.-  In 2004 the debt-to-GDP ratio, which still stands at 106%, is expected to decline only marginally in spite of significant privatisation proceeds. The virtual standstill compared to 2003 results from a slippage in the primary balance and significant debt increasing operations other than the deficit. The pace of debt reduction is expected to pick up again over the 2005-2008 period on the back of the projected improvement in the primary balance, an ambitious privatisation programme and the gradual acceleration of economic growth. However, the positive impact of the planned privatisation proceeds is largely offset by unspecified debt-increasing below-the-line operations. The debt-to-GDP ratio is projected to fall below the 100% threshold only in 2007, four years later than the 2003 deadline to which Italy had committed itself in 1998 with a view to the entry into EMU.-  The fiscal strategy in the programme is dominated by the need to significantly curb current primary expenditures in order to achieve fiscal consolidation and at the same time allow for a reduction of taxes. While officially expected to be deficit neutral, the 2005 tax reform risks having a negative effect on the budget balance. Similarly, the 2% cap on the annual increase in primary expenditure as well as a further revision of the internal stability pact are not entirely bolstered by credible enforcement mechanisms. The framework law on the pension reform adopted in 2004 is an important step towards addressing the budgetary consequences of aging population. A full implementation of the reform is expected to reduce expenditure by around 0.6-0.7% of GDP between 2011 and 2033 with the tightening of eligibility conditions scheduled to take effect only in 2008 taking the form of a sudden and sharp increase of the retirement age required for seniority pensions. The programme also includes a plan for the disposal of financial assets of on average 1.6% of GDP per year without however providing the relevant details. Finally, several budgetary measures produce a beneficial effect in the short run at the expense of gradually reversing the impact in the future.-  With regard to the long-term sustainability of public finances, Italy appears to be at some risk. Conditional on the full implementation of the budgetary targets and the recently adopted pension reform, Italy would achieve a sustainable path. Hence, in view of the risks to the budgetary targets a prompt correction of any departure from the strategy of running large primary surpluses is instrumental to ensure the long-term sustainability of public finances.-  The economic policies outlined in the update are partly consistent with the country-specific Broad Economic Policy Guidelines in the area of public finances. First, the programme does not envisage a medium-term close to balance or in surplus position. Second, the budgetary targets do not ensure an improvement in cyclically-adjusted terms of at least 0.5 percentage point per year. Third, the planned tax cut is not fully financed in 2005 through structural cuts in current primary expenditure. Finally, the programme does not provide sufficient information on how the mechanisms for strengthening expenditure control would work nor does it outline a clear source of financing regional expenditure.-  In view of the above assessment it would be appropriate for Italy to (i) do the necessary to ensure the achievement of the 2005 deficit target, (ii) make the necessary effort in structural terms in 2006 and beyond to achieve a budgetary position of close to balance by the end of the period covered by the programme (iii) ensure that the debt-to-GDP ratio is declining towards the 60% of GDP Treaty reference value at a more rapid pace, paying particular attention to factor other than net borrowing which contribute to the change in debt levels.Based on this assessment, the Commission has adopted the attached recommendation for a Council Opinion on the updated stability programme of Italy and is forwarding it to the Council.Recommendation for aCOUNCIL OPINIONin accordance with the third paragraph of Art. 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Italy 2004-2008THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[4], and in particular Article 5(3) thereof,Having regard to the recommendation of the Commission,After consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:On [17 February 2005] the Council examined the updated stability programme of Italy, which covers the period 2004 to 2008. The programme complies partly with the data requirements of the “code of conduct on the content and format of stability and convergence programmes”. For the years 2006 and beyond only the size of the future fiscal correction is indicated not its composition and the breakdown of the budget is not consistent with the budgetary targets presented in the programme. Accordingly, Italy is invited to achieve compliance with the requirements of the code of conduct.The macro-economic scenario underlying the programme reflects the information set available at around mid-year 2004. It envisages real GDP growth to pick up from 1.2% in 2004 to 2.1% in 2005 and to average at around 2.3% over the rest of the programme period. On the basis of currently available information, this scenario seems to reflect somewhat favourable growth assumption because both (i) projected growth in 2005 appears on the high side of the current forecasting range and (ii) the projected evolution of growth in the medium term appears relatively optimistic. The programme’s projections of price developments as measured by the GDP deflator appear realistic[5].The programme aims at gradually reducing the nominal budget deficit from an expected outturn of 2.9% of GDP in 2004, via a deficit target of 2.7% of GDP in 2005 to 0.9% of GDP in 2008. Hence, the programme does no longer target a medium term close to balance or in surplus position. In cyclically-adjusted terms the budget balance is projected to improve by 1.1 percentage points over the programme period, with the bulk of the adjustment (0.5 percentage point) expected to take place in 2006. No improvement in cyclically-adjusted terms is expected in 2005. Compared to the previous update the nominal deficit figures are more than one percentage point higher and the planned adjustment is back-loaded against a somewhat less favourable macroeconomic scenario. However, since the cyclical conditions, as measured by the output gap, are almost unchanged the largest part of the revision of the deficit can be taken to be structural.There are clear risks that the budgetary outcome could be worse than projected in the programme. In particular, concerning 2005, where the margins are very narrow, lower than projected economic growth, small deviations from the planned budgetary correction of more than 2% of GDP, risks linked to some one-off measures as well as the possiblere-classification of ANAS, the company in charge of road maintenance, entail a risk of breaching the 3% of GDP reference value. In the year 2006 and beyond a complete assessment of budgetary developments is complicated as the programme does not detail the measures necessary to achieve the budgetary objectives.Over the same period, given past experience it cannot be excluded that the fiscal adjustment needed to achieve the targets presented in the programme is underestimated.In view of this risk assessment, the budgetary stance in the programme does not seem to provide a sufficient safety margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations at least up until 2006. It is also insufficient to ensure that the Stability and Growth Pact’s medium-term objective of a budgetary position of close to balance is achieved by the end of the programme period.The debt ratio is estimated to have reached 106% of GDP in 2004, only marginally below the level recorded in 2003 and far above the 60% of GDP Treaty reference value. The programme projects the debt ratio to decline by over 8 percentage points over the programme period mainly on account of an ambitious privatisation plan coupled with an improving primary balance and accelerating economic growth. A more rapid pace of debt reduction is hampered by debt increasing below-the-line operations of more than 2 percentage points of GDP on average per year. The evolution of the debt may be less favourable than projected given (i) the risks to the budgetary targets mentioned above (ii) the high degree of ambition of the privatisation programme.With regard to the long-term sustainability of public finances, Italy appears to be in a relatively favourable position, provided the budgetary targets are fully implemented and the expected savings from the recently adopted pension reform achieved. Hence, in view of the risks to the budgetary targets a prompt correction of any departure from the strategy of running large primary surpluses is instrumental to ensure a sustainable path of public finances.The economic policies outlined in the programme are partly consistent with the country-specific Broad Economic Policy Guidelines in the area of public finances. First, the programme does not envisage a medium-term close to balance or in surplus position. Second, the budgetary targets do not ensure an improvement in the cyclically-adjusted budget balance of at least 0.5 percentage point per year. Third, the planned tax cut is not fully financed in 2005 through structural cuts in current primary expenditure. Finally, the programme does not provide sufficient information on how the strengthening of mechanisms for expenditure control would work nor does it outline a clear source of financing regional expenditure.* * *In view of the above assessment, the Council is of the opinion that Italy should:(i) do the necessary to ensure the achievement of the 2005 deficit target;(ii) make the necessary effort in structural terms in 2006 and beyond to achieve a budgetary position of close to balance by the end of the period covered by the programme; and(iii) ensure that the debt-to-GDP ratio is declining towards the 60% of GDP Treaty reference value at a more rapid pace, paying particular attention to factors other than net borrowing which contribute to the change in debt levels..Comparison of key macroeconomic and budgetary projections2004 | 2005 | 2006 | 2007 | 2008 |Real GDP (% change) | SP 2004 | 1.2 | 2.1 | 2.2 | 2.3 | 2.3 |COM Oct 2004 | 1.3 | 1.8 | 1.8 | - | - |SP 2003 | 1.9 | 2.2 | 2.5 | 2.6 |HICP inflation (%) | SP 20041 | 2.2 | 1.6 | 1.5 | 1.4 | 1.4 |COM Oct 2004 | 2.3 | 2.3 | 2.0 | - | - |SP 2003 | 1.8 | 1.5 | 1.4 | 1.4 | - |General government balance (% of GDP) | SP 2004 | -2.9 | -2.7 | -2.0 | -1.4 | -0.9 |COM Oct 2004 | -3.0 | -3.0 | -3.6 | - | - |SP 2003 | -2.2 | -1.5 | -0.7 | 0.0 | - |Primary balance (% of GDP) | SP 2004 | 2.4 | 2.4 | 3.3 | 4.0 | 4.7 |COM Oct 2004 | 2.0 | 2.1 | 1.5 | - | - |SP 2003 | 2.9 | 3.5 | 4.4 | 5.1 | - |Cyclically-adjusted balance (% of GDP) | SP 20042 | -2.1 | -2.1 | -1.6 | -1.2 | -1.0 |COM Oct 2004 | -2.4 | -2.6 | -3.4 | - | - |SP 20032 | -1.6 | -1.0 | -0.4 | 0.1 | - |Government gross debt (% of GDP) | SP 2004 | 106.0 | 104.1 | 101.9 | 99.2 | 98.0 |COM Oct 2004 | 106.0 | 104.6 | 104.4 | - | - |SP 2003 | 105.0 | 103.0 | 100.9 | 98.6 | - |Note: 1 Planned inflation from 2005 onwards. 2 Commission services calculations on the basis of the information in the programme. Sources: Stability programme (SP); Commission services autumn 2004 economic forecasts (COM); Commission services calculations. | [1] OJ L 209, 2.8.1997. All the documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm.[2] Revised Opinion of the Economic and Financial Committee on the content and format of stability and convergence programmes, endorsed by the ECOFIN Council on 10.7.2001.[3] COM(2002) 668 final, 27.11.2002.[4] OJ L 209, 2.8.1997, p. 1. The documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm.[5] The projections for HICP inflation presented in the programme are not forecasts. They rather represent reference values generally intended to be used in the wage bargaining process.


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		52014DC0429

			Recommendation for a COUNCIL RECOMMENDATION on the United Kingdom's 2014 national reform programme and delivering a Council opinion on the United Kingdom's 2014 convergence programme /* COM/2014/0429 final  - 2014/ () */

Recommendation for a
COUNCIL RECOMMENDATION
on the United Kingdom's 2014 national
reform programme
and delivering a Council opinion on the United Kingdom's 2014 convergence
programme

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[3],
Having regard to the resolutions of the
European Parliament[4],
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 will focus on
the key areas where action is needed to boost Europe’s potential for sustainable
growth and competitiveness.
(2)
On 13 July 2010, the Council, 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, adopted a decision on guidelines for the employment
policies of the Member States, 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 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 on the United Kingdom's national reform programme for 2013 and
delivered its opinion on the United Kingdom's updated convergence programme for
2012-13 to 2017-18.
(5)
On 13 November 2013, the Commission adopted the
Annual Growth Survey[5],
marking the start of the 2014 European Semester of economic policy
coordination. On the same day on the basis of Regulation (EU) No 1176/2011, the
Commission adopted the Alert Mechanism Report[6],
in which it identified the United Kingdom 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 the United Kingdom[7],
under Article 5 of Regulation (EU) No 1176/2011. The Commission's analysis
leads it to conclude that the United Kingdom continues to experience
macroeconomic imbalances, which require monitoring and policy action. In
particular, developments in the areas of household debt, linked to the high
levels of mortgage debt and structural characteristics of the housing market,
as well as unfavourable developments in export market shares, continue to
warrant attention. The risks in the housing sector relate to a continuing
structural undersupply of housing; intrinsic supply constraints, particularly
in London, and the relatively slow response of supply to increases in demand
continues to drive house prices higher, particularly in London and the southeast,
and also leads to buyers taking on high mortgages. While the declining export
market share is unlikely to pose short-term risks, taken together with the
current account deficit, it still points to structural challenges. These are
related to skills gaps and infrastructure deficiencies. As regards public
finances, the United Kingdom has missed its headline deficit targets and its
structural adjustment targets.
(8)
On 30 April 2014, the United Kingdom submitted
its 2014 national reform programme and its 2014 convergence programme. In order
to take account of their interlinkages, the two programmes have been assessed
at the same time.
(9)
Pursuant to paragraph 4 of the Protocol (No 15)
on certain provisions relating to the United Kingdom of Great Britain and
Northern Ireland, the obligation in Article 126(1) of the Treaty on the
Functioning of the European Union to avoid excessive general government
deficits does not apply to the United Kingdom. Paragraph 5 of the Protocol
provides that the United Kingdom is to endeavour to avoid an excessive
government deficit. On 8 July 2008 the Council decided, in accordance with
Article 104(6) of the Treaty establishing the European Community that an
excessive deficit exists in the United Kingdom.
(10)
The objective of the budgetary strategy outlined
in the 2014 Convergence Programme is to balance the cyclically-adjusted current
budget by the end of a five-year rolling period, currently ending in 2018-19.
The Convergence Programme does not include a medium-term objective as foreseen
by the Stability and Growth Pact. The general government deficit is estimated
at 5.0% of GDP in 2014-15, having fallen from a peak of 11.4% of GDP in
2009-10. This does not comply with the deadline for correcting the excessive
deficit set by the Council. According to the programme, the excessive deficit
will be corrected in 2016-17 at 2.4% of GDP, two years after the deadline set
by the Council. The programme implies that the (recalculated) general
government structural deficit will improve by 0.3 pp. to 4.4% of GDP over the
year to 2014-15. The budgetary plans are not sufficient in attaining the annual
average fiscal effort recommended to correct the excessive deficit. Thereafter,
the programme foresees an annual improvement of the (recalculated) structural
balance of 0.8 pp. in 2015-16 and 1.3 pp. in 2016-17. Overall, the programme is
only partly in line with the requirements of the Stability and Growth Pact. The
consolidation has until now been heavily skewed towards expenditure cuts,
therefore the potential revenue contribution from a broadening of the tax base
could be considered. The United Kingdom has a high level of foregone taxes,
particularly with regard to indirect taxation. According to the Convergence
Programme, the debt-to-GDP ratio is projected to increase to 93.1% in 2015-16
before falling back to 86.6% in 2018-19. The United Kingdom’s macroeconomic
scenario underpinning the budgetary projections in the programme is plausible.
Potential risks to the budgetary projections stem from lower-than-expected
growth due to constrained wages curtailing private consumption and uncertainty
hindering investment. Nevertheless, the projections are consistent with the Commission
2014 spring forecast, which also does not foresee that the excessive deficit
will be corrected by the deadline set by the Council. Furthermore, based on the
Commission forecast, the (corrected) change in the structural balance over
2010-2014 falls short by on average 0.6% of GDP per year compared to the
requirement and is projected to fall short in 2015 as well. Based on its
assessment of the programme and the Commission forecast, pursuant to Council
Regulation (EC) No 1466/97, the Council is of the opinion that additional
measures are needed to ensure compliance with the recommendation under the
excessive deficit procedure.
(11)
The United Kingdom has taken both demand and
supply side measures in the area of housing. Although the supply of new
properties has risen, it remains low and has fallen short of demand by a
considerable margin. This has combined with low interest rates and easier terms
for mortgage lending (such as higher loan-to-income multiples) to push up house
prices in certain parts of the United Kingdom particularly in London. A
shortage of supply has long been a structural phenomenon and is likely to
extend into the medium term. Action is needed to further boost the supply of
houses - by creating appropriate incentives to raise supply at the local level.
The authorities should continue to monitor house prices and mortgage
indebtedness and stand ready to deploy appropriate measures, including
adjusting the Help to Buy 2 (loan guarantee) scheme, if deemed necessary. There
is a need to increase the transparency of the use and impact of the macro-prudential
regulation of the housing sector by the Financial Policy Committee that could
be deployed to address excessive house price rises and increases in mortgage
indebtedness. Reforms to the taxation of land and property should be considered
to alleviate distortions in the housing market. At the moment, increasing
property values are not translated into higher property taxes as the property
value roll has not been updated since 1991 and taxes on higher value property
are lower than on lower value property in relative terms due to the
regressivity of the current rates and bands within the council tax system.
(12)
The United Kingdom continues to address the
challenges of unemployment and underemployment as well as the specific issues
related to youth unemployment. There are important challenges with equipping
young people with the skills and work experience required by the labour market
and increasing the supply of apprenticeships. This helps to explain the fact
that the take-up of wage subsidies provided for by the Youth Contract remains
lower than forecast. The labour market suffers from skill mismatches and the
authorities are attempting to re-skill the workforce to address both
unemployment and a shortage of high-quality vocational and technical skills.
While there have been efforts to improve the quality of apprenticeship
programmes, further efforts are needed. Moreover, the qualifications system
remains complex and needs to be streamlined to facilitate universal recognition
and a higher level of engagement by employers.
(13)
The authorities are addressing the problem of
weak work incentives, especially for recipients of social benefits with the
introduction of the Universal Credit, which will allow individuals to keep more
of their benefit income as they move into work. Whilst Universal Credit could
have a positive impact on employment much will depend on effective
implementation and support services, including the interaction with other
benefits. The focus on getting back into work has also been reflected in limiting
the annual adjustment to many working-age benefits and tax credits to 1% per
annum until 2016.
(14)
The United Kingdom continues to tackle
challenges to increasing parental employment by increasing access to
high-quality, affordable childcare. It continues to introduce schemes to make
childcare affordable for both part-time and full-time employed parents, taking
into account different levels of earnings. Childcare costs, however, remain
among the highest in the EU and continue to pose problems particularly for
second earners and for single parents.
(15)
In terms of access to finance, while conditions
in credit markets have improved in 2013, credit growth remains weak and
existing policies need more time to show that they have been successful.
Particular challenges regarding access to credit remain for SMEs. While large
firms can finance themselves directly in wholesale markets and profit from the
well-developed financial services offer of the United Kingdom, SMEs largely
rely on banks to obtain their external funding. Good progress has been made to
address last year's recommendation on competition in banking by the creation of
new banks, referred to as challenger banks (one such example is TSB, which,
however, is not yet fully independent).
(16)
In December 2013, the United Kingdom published
an updated national infrastructure plan: a long-term and strategic approach to
the planning, funding, finance and delivery of infrastructure. The plan sets
out a 'pipeline' of forward-looking capital investment to 2020 and beyond of GBP
375 billion in total (approximately EUR 460 billion). A large proportion of the
'pipeline' (GBP 340 billion, i.e. approximately EUR 420 billion) concerns
investment in the energy and transport sectors. Around three-quarters of the
funding is projected to be privately-sourced, while the rest is projected to be
publicly funded. Although the plan is an appropriate initiative, there remain
concerns about the private sector element of financing, regulatory certainty
and timely planning permission. There is a need for stringent mechanisms to
mitigate financing and execution risks while ensuring transparency on projected
and actual expenditure on infrastructure.
(17)
In the context of the European Semester, the
Commission has carried out a comprehensive analysis of the United Kingdom’s
economic policy. It has assessed the convergence programme and the national
reform programme. It has taken into account not only their relevance for
sustainable fiscal and socio-economic policy in the United Kingdom but also
their compliance with EU rules and guidance, given the need to reinforce the
overall economic governance of the European Union by providing EU-level input
into future national decisions. Its recommendations under the
European Semester are reflected in recommendations (1) to (6) below.
(18)
In the light of this assessment, the Council has
examined the United Kingdom's convergence programme, and its opinion[8] is reflected in
particular in recommendation (1) below.
(19)
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 recommendations (2), (3), (5) and (6) below.
HEREBY RECOMMENDS that the United
Kingdom take action within the period 2014-2015 to:
1.
Reinforce the budgetary strategy, endeavouring
to correct the excessive deficit in a sustainable manner in line with the
Council recommendation under the Excessive Deficit Procedure. Pursue a differentiated,
growth-friendly approach to fiscal tightening by prioritising capital
expenditure. To assist with fiscal consolidation, consideration should be given
to raising revenues through broadening the tax base. Address structural
bottlenecks related to infrastructure, skills mismatches and access to finance
for SMEs to boost growth in the export of both goods and services.
2.
Increase the transparency of the use and impact
of macro-prudential regulation in respect of the housing sector by the Bank of
England's Financial Policy Committee. Deploy appropriate measures to respond to
the rapid increases in property prices in areas that account for a substantial
share of economic growth in the United Kingdom, particularly London, for
example by adjusting the Help to Buy 2 scheme and mitigate risks related to
high mortgage indebtedness. Remove distortions in property taxation by
regularly updating the valuation of property and reduce the regressivity of the
band and rates within the council tax system. Continue efforts to increase the
supply of housing.
3.
Maintain commitment to the Youth Contract,
especially by improving skills that meet employer needs. Ensure employer
engagement by placing emphasis on addressing skills mismatches through more
advanced and higher level skills provision and furthering apprenticeship offers.
Reduce the number of young people with low basic skills.
4.
Continue efforts to reduce child poverty in
low-income households, by ensuring that the Universal Credit and other welfare
reforms deliver adequate benefits with clear work incentives and support
services. Improve the availability of affordable quality childcare.
5.
Continue efforts to improve the availability of
bank and non-bank financing to SMEs. Ensure the effective functioning of the
Business Bank and support an increased presence of challenger banks.
6.
Follow up on the National Infrastructure Plan by
increasing the predictability of the planning processes as well as providing
clarity on funding commitments. Ensure transparency and accountability by
providing consistent and timely information on the implementation of the Plan.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 2.8.1997, p. 1.
[2]               OJ L 306, 23.11.2011, p. 25.
[3]               COM(2014) 429 final.
[4]               P7_TA(2014)0128 and P7_TA(2014)0129.
[5]               COM(2013) 800 final.
[6]               COM(2013) 790 final.
[7]               SWD(2014) 91 final.
[8]               Under Article 9(2) of Council Regulation (EC) No
1466/97.