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

text:
               18.8.2015

               EN

               Official Journal of the European Union

               C 272/80

         COUNCIL RECOMMENDATION
   of 14 July 2015
   on the 2015 National Reform Programme of Malta and delivering a Council opinion on the 2015 Stability Programme of Malta
   (2015/C 272/21)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

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

               (2)

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

               (3)

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

               (4)

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

               (5)

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

               (6)

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

               (7)

               On 17 April 2015, Malta submitted its 2015 National Reform Programme and on 30 April 2015 its 2015 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (8)

               Malta is currently in the preventive arm of the Stability and Growth Pact following the abrogation of the Excessive Deficit Procedure in June 2015 (6). In its 2015 Stability Programme, the Government plans a gradual improvement of the headline deficit to 1,6 % of GDP in 2015 and further to 0,2 % of GDP in 2018. Based on the Commission's 2015 spring forecast, the excessive deficit can be considered to have been corrected in 2014. According to the Stability Programme, the Government plans to meet the medium-term objective — a balanced budgetary position in structural terms — by 2019, one year after the programme period. According to the Stability Programme, the government debt-to-GDP ratio is expected to gradually decline to 61,2 % in 2018. The macroeconomic scenario underpinning these budgetary projections is plausible. There appears to be a risk of some deviation from the required adjustment of 0,6 % of GDP towards the medium-term objective in both 2015 and 2016. In 2015, the improvement in the structural balance is forecast to be 0,1 % of GDP below the requirement. While the adjustment projected for 2016 is in line with the requirement, there is a risk of some deviation over 2015 and 2016 taken together. Measures to support the planned deficit targets from 2016 onwards have not been sufficiently specified. Therefore, further measures will be needed in 2015 and 2016. Based on its assessment of the Stability Programme and taking to account the Commission's 2015 spring forecast, the Council is of the opinion that Malta is expected to broadly comply with the provisions of the Stability and Growth Pact.

               (9)

               The sustainability of Malta's public finances is at risk in the long term, in particular in view of a projected increase in age-related expenditure.In the pension system, the legislated increase in the statutory retirement age is being introduced at a very slow pace and there is no specific link between the statutory retirement age and life expectancy. Malta has addressed the challenges of its pensions system through labour market measures and the introduction of third-pillar pensions, and has made further policy announcements in its National Reform Programme, but measures aimed at substantially improving the sustainability and adequacy of the system remain to be announced and implemented. Implementation of the 2014 national health systems strategy has started, with the aim of maximising the efficiency of the healthcare system while pursuing its financial sustainability. This needs to be monitored.

               (10)

               Malta has put in place measures to help its population manage their work and family life balance, in particular through fiscal incentives, the continuing provision of free childcare centres and the introduction of flexible working arrangements. At the same time, the increased demand for informal long-term care and a lack of suitable skills may be preventing older women from seeking work in the labour market. A national literacy strategy and an early school-leaving strategy were published in June 2014. Work is also ongoing on aligning educational outcomes with market needs, though tangible results are yet to be seen.

               (11)

               Efforts have been made to provide a framework for the use of venture capital funds and to facilitate access to capital markets, in particular through the review of the start-up scheme Malta Enterprise and the announced seed investment programme. Work is also ongoing on setting up a development bank. This needs to be monitored.

               (12)

               Malta's efforts to fight tax evasion and encouraging tax compliance through the pursuit of a streamlined revenue collection framework go in the right direction. While work is ongoing, there is a need for concrete measures to accelerate the uptake of electronic payments.

               (13)

               The length of public procurement procedures has been significantly reduced through the introduction of mandatory e-procurement and the strengthening of the relevant government departments. It will be further reduced through the implementation of announced measures, in particular the recruitment of additional staff and the introduction of a tracking system. Transport costs play a substantial role in Malta's economy. A reform of transport has recently been launched, but the Government still needs to present a comprehensive transport strategy.

               (14)

               The National Reform Programme specifies measures to reform the justice system beyond those identified in the country report. As a result, Malta has made some progress in addressing the 2014 country-specific recommendation on increasing the efficiency of the judiciary. Also, a draft bill is being finalised. When it has been enacted and implemented, it is expected to improve further the efficiency of the judicial system, in particular through the digitisation of court proceedings and the promotion of alternative dispute resolution mechanisms.

               (15)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Malta's economic policy and published it in the 2015 country report. It has also assessed the Stability Programme and the National Reform Programme and the follow-up given to the recommendations addressed to Malta in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Malta but also their compliance with EU rules and guidance, given the need to strengthen the overall economic governance of the Union by providing EU-level input into future national decisions. The recommendations under the European Semester are reflected in recommendations 1 to 4 below.

               (16)

               In the light of this assessment, the Council has examined the Stability Programme, and its opinion (7) is reflected in particular in recommendation 1 below.

               (17)

               In the context of the European Semester, the Commission has also carried out an analysis of the economic policy of the euro area as a whole. On the basis of this analysis, the Council has issued specific recommendations addressed to the Member States whose currency is the euro (8). As a country whose currency is the euro, Malta should also ensure the full and timely implementation of those recommendations,

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

               1.

               Following correction of the excessive deficit, achieve a fiscal adjustment of 0,6 % of GDP towards the medium-term budgetary objective in 2015 and 2016.

               2.

               Take measures to improve basic skills and further reduce early school-leaving by promoting the continuous professional development of teachers.

               3.

               To ensure the long-term sustainability of public finances, continue the ongoing pension reform, such as by accelerating the already enacted increase in the statutory retirement age and by consecutively linking it to changes in life expectancy.

               4.

               Improve small and micro-enterprises' access to finance, in particular through non-bank instruments.

      Done at Brussels, 14 July 2015.

            For the Council

            The President

         P. GRAMEGNA

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  Council Recommendation of 8 July 2014 on the National Reform Programme 2014 of Malta and delivering a Council opinion on the Stability Programme of Malta, 2014 (OJ C 247, 29.7.2014, p. 83).

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

      (5)  Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (OJ L 306, 23.11.2011, p. 25).

      (6)  Council Decision (EU) 2015/1025 of 19 June 2015 abrogating Decision 2013/319/EU on the existence of an excessive deficit in Malta (OJ L 163, 30.6.2015, p. 35).

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

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


				|

		52012DC0303

			Recommendation for a COUNCIL RECOMMENDATION on the Czech Republic’s 2012 national reform programme and delivering a Council opinion on the Czech Republic’s convergence programme for 2012-2015 /* COM/2012/0303 final */

			   	Recommendation for a
COUNCIL RECOMMENDATION
on the Czech Republic’s 2012 national
reform programme
and delivering a Council opinion on the Czech Republic’s convergence programme
for 2012-2015
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 121(2) and 148(4)
thereof,
Having regard to Council Regulation (EC) No
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary
positions and the surveillance and coordination of economic policies[1], and in particular Article 5(2)
thereof,
Having regard to the recommendation of the
European Commission[2],
Having regard to the resolutions of the
European Parliament,[3]
Having regard to the conclusions of the
European Council,
Having regard to the opinion of the
Employment Committee,
After consulting the Economic and Financial
Committee,
Whereas:
(1)       On 26 March 2010, the
European Council agreed to the European Commission’s proposal to launch a new
strategy for jobs and growth, Europe 2020, based on enhanced coordination of
economic policies, which will focus on the key areas where action is needed to
boost Europe’s potential for sustainable growth and competitiveness.
(2)       On 13 July 2010, the
Council adopted a recommendation on the broad guidelines for the economic
policies of the Member States and the Union (2010 to 2014) and, on 21 October
2010, adopted a decision on guidelines for the employment policies of the
Member States[4],
which together form the ‘integrated guidelines’. Member States were invited to
take the integrated guidelines into account in their national economic and
employment policies.
(3)       On 12 July 2011, the
Council adopted a recommendation on the Czech Republic’s national reform
programme for 2011 and delivered its opinion on the Czech Republic’s convergence
programme for 2011-2014.
(4)       On 23 November 2011, the
Commission adopted the second Annual Growth Survey, marking the start of the second
European Semester of ex ante and integrated policy coordination, which is
anchored in the Europe 2020 strategy. On 14 February 2012, the Commission, on
the basis of Regulation (EU) No 1176/2011, adopted the Alert Mechanism Report[5], in which it did not identify
the Czech Republic as one of the Member States for which an in-depth review
would be carried out.
(5)       On 2 March 2012, the
European Council endorsed the priorities for ensuring financial stability,
fiscal consolidation and action to foster growth. It underscored the need to pursue
differentiated, growth-friendly fiscal consolidation, to restore normal lending
conditions to the economy, to promote growth and competitiveness, to tackle
unemployment and the social consequences of the crisis, and to modernise public
administration.
(6)       On 25 April 2012, the
Czech Republic submitted its convergence programme covering the period 2012-2015
and, on 13 April 2012, its 2012 national reform programme. In order to take
account of their interlinkages, the two programmes have been assessed at the
same time.
(7)       Based on the assessment of
the 2012 convergence programme pursuant to Council Regulation (EC) No 1466/97,
the Council is of the opinion that the macroeconomic scenario underpinning
the budgetary projections in the programme is plausible. According to the
convergence programme, GDP growth is expected to reach 0.2% and 1.3% in 2012
and 2013 respectively, compared to 0% and 1.5% in 2012 and 2013 respectively in
the Commission's 2012 spring forecast. The objective of the budgetary strategy
outlined in the programme is to reach a balanced budget in 2016. The general
government deficit target of 2.9% of GDP in 2013 is in line with the deadline
for correcting the excessive deficit set out in the Council recommendations of
2 December 2009. The average annual fiscal effort of 0.9% of GDP over the
period 2010-2013, based on the (recalculated) structural budget balance[6], is slightly below the effort
of 1% of GDP recommended by the Council. The programme confirms the previous medium-term
budgetary objective (MTO) of a deficit of 1% of GDP, which adequately reflects
the requirements of the Stability and Growth Pact, to be reached in 2015. The
progress towards the MTO is 0.8% and 0.7% of GDP in 2014 and 2015 respectively,
based on the (recalculated) structural balance and the rate of growth of
government expenditure complies with the expenditure benchmark of the Stability
and Growth Pact. The budgetary projections of the programme are subject to
several risks. The law on financial compensation to churches, currently
discussed in Parliament, would increase the general government deficit by 1.5%
of GDP in the year of entry into force. More generally, the nature and extent
of the envisaged consolidation measures on both the revenue and the expenditure
side entails a significant risk for the sustainability of the fiscal adjustment
beyond the programme period. Budgetary adjustment has so far relied mostly on
across-the-board cuts, which affect also growth-enhancing expenditure.
Additional savings in public administration expenditures amounting to almost 1%
of GDP are planned for 2013 - 2015, but details are not sufficiently specified
in the programme. Finally, most of the planned revenue measures are of a
temporary nature and should expire in 2015. According to the programme, the
debt-to-GDP ratio is expected to peak at 45.1% of GDP in 2013 and decline
thereafter, mainly on account of the projected continuous improvement of the
primary balance.
(8)       In 2011, the Czech
authorities approved an increase in the reduced VAT rate and in excise duties
on tobacco; they also approved a major tax reform affecting labour taxation
which should enter into force in 2014. Further changes to the tax system were
agreed at government level in April 2012. Some concern environmental and
housing taxation, which are currently under-taxed. The proposed temporary
nature of provisions in labour taxation would create additional compliance
costs and reduce predictability for taxpayers. Furthermore, the low effective
taxation of the self-employed compared to employees on account of an extensive
recourse to lump-sums and tax deductibles would only be partly addressed by the
new proposals. Finally, the government adopted measures to combat fraud in the
area of VAT and fuel taxes and took first steps to introduce the single
collection point. However, tax compliance still remains an issue and the
current tax collection system is not based on an articulated and comprehensive
tax compliance strategy.
(9)       The Czech government
approved, and partly implemented, a reform of the pension system, aimed at
restoring fiscal sustainability and raising retirement savings. However, the
projected fiscal imbalances in the pension system are still high relative to
the EU average. An explicit link between the statutory retirement age and life
expectancy was not included in the reform. The capacity of the new funded
pillar to contribute to higher average pensions in the future depends on the proportion
of workers, especially of younger ones, participating in it and on the expected
rate of return over the long run. However, no measures were announced to
stimulate participation in this pillar and more guidance for potential savers
would be appropriate. Moreover, the new early retirement scheme proposed by the
government represents a major risk to credibility and ambition of the reforms
to achieve both an effective increase in the retirement age and adequate
pensions.
(10)     The overall unemployment
rate is below the EU average but women with children and other vulnerable
groups struggle to realise their potential in the labour market. An earlier
return from parental leave, which would prevent the loss in skills, is
contingent on greater availability of child care, especially for children below
the age of three. In this regard, the government eased the technical requirements
for setting up company-based kindergartens and envisages providing tax
incentives for a greater take-up of private child care, thereby partially
implementing the recommendations. However, as only 3 % of children younger
than 3 years attend formal child care (compared to 24 % in the EU-27,
2009), further measures are needed with a view to enhancing labour market
participation of parents with young children.
(11)     Several measures were
adopted to improve the performance of the public employment service (PES).
Regional labour offices were put under the responsibility of a new central
labour office and, as part of a broader social-benefits reform, the
responsibility for payment of non-insurance social benefits was transferred
from the municipalities to labour offices. However, the resulting increased
workload will put further strain on the PES staff, whose number declined by 12 %
in 2011. To improve placement services, a system for outsourcing employment
services to private agencies was introduced. However, the fee structure seems
inadequate. Further efforts are needed to ensure better quality and
effectiveness of training, job search assistance and individualised services.
The necessary means and incentives need to be provided. Efficiency assessment
should be introduced to improve the targeting if interventions and funding of
activation programmes are to be linked to performance.
(12)     There is still ample scope
for improving the efficiency of public administration, despite recent
improvements in some areas, such as e-government services and the reduction of
the administrative burden for businesses. With respect to the anti-corruption
strategy, the adoption of the new Public Procurement Act, in force since April
2012, has been the main achievement. Nevertheless, proper enforcement and
implementation will be crucial for its credibility and effectiveness. The issue
of anonymous share holding has not been addressed yet. The Public Servants Act
is still under preparation but needs to be adopted without delay in order to
provide the administration with the necessary stability. Furthermore,
irregularities in public procurement and sub-optimal functioning of the
management and control systems for public administration have been important
sources of problems with implementation of the EU Funds.
(13)     The Czech economy needs to
mobilise factors facilitating the transition to growth based on innovation,
higher value added and human capital because opportunities for further real
convergence based on capital-intensive growth seem rather limited. A reform of
tertiary education is currently being discussed. Although it includes an overhaul
of the current accreditation process, it is not sufficiently precise on the key
issue of quality evaluation standards and, given the absence of systematic data
collection and analysis, it lacks support from the academic community. In the
wake of the worsening achievements of Czech pupils, the government has
undertaken steps to ensure minimal learning outcomes and embarked on a strategy
of nation-wide computer-based testing. However, these measures are too narrow
to effectively increase the quality and equity of compulsory education.
(14)     In the context of the
European Semester, the Commission has carried out a comprehensive analysis of
the Czech Republic’s economic policy. It has assessed the convergence programme
and national reform programme. It has taken into account not only their
relevance for sustainable fiscal and socio-economic policy in the Czech
Republic 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.
(15)     In the light of this
assessment, the Council has examined the Czech Republic’s convergence programme,
and its opinion[7]
is reflected in particular in recommendation (1) below,
HEREBY RECOMMENDS that the Czech
Republic should take action within the period 2012-2013 to:
1.           Ensure planned progress
towards the timely correction of the excessive deficit. To this end, fully implement
the 2012 budget and specify measures of a durable nature necessary for the year
2013 so as to achieve the annual average structural adjustment specified in the
Council recommendation under the Excessive Deficit Procedure. Thereafter,
ensure an adequate structural adjustment effort to make sufficient progress
towards the medium-term objective, including meeting the expenditure benchmark.
In this context, avoid across-the-board cuts, safeguard growth-enhancing
expenditure and step up efforts to improve the efficiency of public spending. Exploit
the available space for increases in taxes least detrimental to growth. Shift
the high level of taxation on labour to housing and environmental taxation. Reduce
the discrepancies in the tax treatment of employees and the self-employed. Take
measures to improve tax collection, reduce tax evasion and
improve tax compliance, including by implementing the Single Collection Point
for all taxes.
2.           Introduce further changes
to the public pension scheme to ensure their long-term sustainability.
Reconsider plans to allow an earlier exit from the labour market. Ensure broad
participation of younger workers in the envisaged funded scheme to improve adequacy
of pensions.
3.           Take additional measures
to significantly increase the availability of affordable and quality pre-school
childcare facilities.
4.           Strengthen public employment
services by increasing the quality and effectiveness of training, job search
assistance and individualised services, including of outsourced services.
5.           Adopt and implement as a
matter of urgency the Public Servants Act to promote stability and
effectiveness of the public administration to avoid irregularities. ensure adequate
implementation of the new Public Procurement Act. Address the issue of
anonymous share holding. Ensure correct implementation of EU Funds and step up
the fight against corruption.
6.           Adopt the necessary
legislation to establish a transparent and clearly defined system for quality
evaluation of higher education and research institutions. Ensure that the
funding is sustainable and linked to the outcome of the quality assessment. Establish
an improvement-oriented evaluation framework in compulsory education.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 02.08.1997, p. 1
[2]               COM(2012)303 final
[3]               P7_TA(2012)0048 and P7_TA(2012)0047
[4]               Council Decision 2012/238/EU of 26 April 2012
[5]               COM(2012) 68 final.
[6]               Cyclically adjusted balance net of one-off and
temporary measures, recalculated by the Commission services on the basis of the information provided in the programme, using
the commonly agreed methodology.
[7]               Under Article 9(2) of Council Regulation (EC) No
1466/97.


title: Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Portugal and delivering a Council opinion on the 2016 Stability Programme of Portugal

text:
               18.8.2016

               EN

               Official Journal of the European Union

               C 299/109

         COUNCIL RECOMMENDATION
   of 12 July 2016
   on the 2016 National Reform Programme of Portugal and delivering a Council opinion on the 2016 Stability Programme of Portugal
   (2016/C 299/26)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

               On 26 November 2015, the Commission adopted the Annual Growth Survey, marking the start of the 2016 European Semester for economic policy coordination. The priorities of the Annual Growth Survey were endorsed by the European Council on 17-18 March 2016. On 26 November 2015, on the basis of Regulation (EU) No 1176/2011, the Commission adopted the Alert Mechanism Report, in which it identified Portugal as one of the Member States for which an in-depth review would be carried out. On the same day, the Commission also adopted a recommendation for a Council recommendation on the economic policy of the euro area. This recommendation was endorsed by the European Council on 18-19 February 2016 and adopted by the Council on 8 March 2016 (3). As a country whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Portugal should ensure the full and timely implementation of the recommendation.

               (2)

               The 2016 country report for Portugal was published on 26 February 2016. It assessed Portugal's progress in addressing the country-specific recommendations adopted by the Council on 14 July 2015 and Portugal's progress towards its national Europe 2020 targets. It also included the in-depth review under Article 5 of Regulation (EU) No 1176/2011. On 8 March 2016, the Commission presented the results of the in-depth review. The Commission's analysis leads it to conclude that Portugal is experiencing excessive macroeconomic imbalances. In particular, the large stocks of net external liabilities, private and public debt and a high share of non-performing loans constitute vulnerabilities in a context of elevated unemployment. Policy gaps persist regarding product and services markets, corporate debt restructuring, fiscal issues and selected areas of the labour market.

               (3)

               On 29 April 2016, Portugal submitted its 2016 National Reform Programme and its 2016 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time. Portugal's National Reform Programme shows sufficient ambition to tackle the excessive imbalances, outlines relevant measures to foster competitiveness and reduction of private debt and refers to the challenges in the 2016 country report and the euro area recommendations focusing on the need to re-launch investment and ensure the sustainability of public finances. If fully and swiftly implemented, these measures would help address Portugal's macroeconomic imbalances. Based on the assessment of Portugal's policy commitments, there is no need at this stage for a stepping-up of the macroeconomic imbalances procedure.

               (4)

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

               (5)

               Portugal is currently in the corrective arm of the Stability and Growth Pact. It did not correct the excessive deficit by the 2015 deadline and did not deliver the fiscal effort recommended by the Council. In its 2016 Stability Programme, the Government plans to correct the excessive deficit and reach a headline deficit of 2,2 % of GDP in 2016. Once a durable correction of the excessive deficit has been achieved, Portugal will become subject to the preventive arm and to the transitional debt rule. The (recalculated (5)) structural balance is set to improve only by around 0,35 % of GDP per year, below the required 0,6 % of GDP, between 2016 and 2020, and the medium-term budgetary objective — a structural surplus of 0,25 % of GDP — is not expected to be achieved within the time horizon of the Programme. According to the Stability Programme, the government debt-to-GDP ratio is expected to fall to 124,8 % in 2016 and to continue declining to 110,3 % in 2020. The macroeconomic scenario underpinning these budgetary projections is rather optimistic. Moreover, the measures needed to support the planned deficit targets from 2017 onwards have not been sufficiently specified. Based on the Commission 2016 spring forecast, the general government deficit is projected to reach 2,7 % of GDP in 2016, below the Treaty reference value of 3 % of GDP, and 2,3 % of GDP in 2017. As the structural deficit is projected to slightly increase in 2016 and 2017, the fiscal effort is not in line with the requirements of the Stability and Growth Pact. Moreover, Portugal is not forecast to comply with the transitional debt rule in 2017. Based on its assessment of the Stability Programme and taking into account the Commission 2016 spring forecast, the Council is of the opinion that there is a risk that Portugal will not comply with the provisions of the Stability and Growth Pact. Therefore further measures will be needed to ensure compliance in 2016 and 2017.

               (6)

               Pursuant to Article 10(1) of Regulation (EC) No 1467/97, the Commission will regularly monitor the implementation of action taken by Portugal in response to the Council Recommendation of 21 June 2013 under Article 126(7) TFEU, the Commission will therefore recommend to the Council the appropriate steps to be taken in the framework of the excessive deficit procedure.

               (7)

               Timely and stringent implementation of the reformed budget framework law, the commitment control law and further improvements in revenue collection and expenditure control may significantly contribute to achieving the required fiscal adjustment. Portugal faces the double challenge of achieving the long-term fiscal sustainability of the healthcare system while at the same time maintaining the level of access to healthcare by improving efficiency in the system. Although Portugal currently has one of the lowest shares of public expenditure in total health spending in the Union, the projected increase in public healthcare expenditure by 2,5 % of GDP by 2060 is the highest. In view of addressing the long-term sustainability challenges in the health sector, comprehensive measures aimed at promoting disease prevention and public health policies as well as ensuring primary healthcare provision at an early and less costly stage have not yet been taken. In the short term, accurate budget planning and implementation in hospitals to ensure clearance of arrears remains an important challenge. While the long-term sustainability of the pension system was addressed in the recent reforms, its short to medium sustainability challenges remain unaddressed. The public pension system is characterised by a high reliance on budget transfers and intergenerational inequalities. Execution delays and policy gaps are still hampering the fiscal sustainability of state-owned enterprises, in particular in the transport sector. Strengthening efficiency enhancing measures in their restructuring plans remains crucial to achieve fiscal savings.

               (8)

               Considerable efforts have been made to curb tax evasion by further improving the efficiency of the tax administration. Measures are being taken to combat tax fraud, to improve information-sharing with financial institutions, and to strengthen the anti-money-laundering framework. Despite the progress made, there is still scope for strengthening tax compliance. Reforming the tax administration to make it more efficient would also help encourage investment.

               (9)

               Overall wage developments have been moderate, consistent with high unemployment and the need to promote external rebalancing, and in line with productivity growth over the medium term. Collective bargaining at sectoral level has been supportive of this trend, though the characteristics of the collective bargaining system still limit the scope of firm-level adjustment. In a context of low inflation and high unemployment, the minimum wage was increased in January 2016 from EUR 505 to EUR 530 per month and is planned to be further gradually increased to EUR 600 per month in 2019 (paid 14 times per year). Portugal is in the middle of the EU ranking for minimum wages as a percentage of average wages, but among the countries with the highest minimum wage as a percentage of the median wage. This suggests that wage distribution in Portugal is very biased towards lower wages, and that further increases in the minimum wage might rapidly expand the proportion of workers covered, which in 2016 has reached almost a quarter of all employees. While this could help reduce the intensity of in-work poverty, it also results in an increased compression of the wage structure, putting upward pressure on overall wages. If not matched by productivity increases, this risks harming the employment and competitiveness outlook, especially for labour-intensive industries. It also risks reducing the incentive to invest in skills.

               (10)

               The Portuguese labour market continued to recover in 2014 and 2015 and substantial efforts have been made to reform activation policies, modernise the public employment service and increase the outreach towards non-registered young people, though some implementation challenges persist. In view of the recent deterioration of the social situation, especially as regards the increasing level of child poverty, important measures have also been taken to reinforce social assistance, namely in the areas of the minimum income scheme, child benefits and low pensions. The impact of these measures in reducing the intensity of poverty needs to be assessed. Nevertheless, absorbing the large pool of long-term unemployed remains a challenge, negatively affecting economic growth and the social situation. There is room for further activation of the long-term unemployed, through targeted labour market policies and enhanced coordination among employment and social services. Although the recovery brought about many new jobs on permanent contracts, segmentation in the labour market remains significant. The proportion of fixed-term employees remains one of the highest in Europe, and the rate of transition from temporary to permanent contracts is low.

               (11)

               High private-sector indebtedness remains a major area of vulnerability for the Portuguese economy and financing conditions for small and medium-sized businesses remain difficult. Some progress has been made on reducing the corporate debt overhang and allowing the private sector to deleverage, but Portugal's private sector is still one of the most highly indebted in the Union. This is a major impediment to investment and potential output growth. Non-financial corporations are adjusting their balance sheets, but to a lesser extent than households. High and rising levels of non-performing loans in the business sector are weighing on the balance sheets of both the non-financial and the financial sector and are a major obstacle to investment. Action has been taken at various levels to address corporate indebtedness, but results have been slow to come. The debt bias of corporate taxation remains high. In the past few years, the Government has tried to tackle this problem by introducing thin capitalisation rules and an allowance for corporate equity. However, in 2015, the difference in the cost of capital (before and after taxation) between debt and equity-funded investments remained one of the highest in the Union. Access to credit remains costly and difficult for businesses, in particular small and medium-sized enterprises and start-ups. Alternative sources of funding, such as private equity, venture capital, crowdfunding and business angels, remain marginal and seriously under-developed.

               (12)

               Despite progress, regulatory barriers and weak institutional capacity are still hampering business growth, competitiveness and investment. The efficiency of Portugal's justice system remains low, particularly in dealing with tax litigation. Public procurement is largely transparent in Portugal. However, according to data of the dedicated online platform ‘BASE’, contracting authorities in Portugal often use the direct award procedure, which over the 2013-2015 period constituted on average 87,3 % of all public contracts, representing 47 % of total amounts contracted. Transparency remains a challenge for concession contracts and public-private partnerships, particularly at local and regional level. The Ministry of Finance's taskforce for public-private partnerships (UTAP) oversees some public-private partnerships managed by the central administration, but concessions, regional and local public-private partnerships are not subject to its monitoring. The port sector reforms still suffer from delays in implementation and obstacles to the entry of new players. Registering a business has become easier, but licensing remains cumbersome, and complex administrative procedures are detrimental to investor confidence. Challenges still exist concerning procedures for access to the construction market, obtaining a construction permit and on effective implementation of streamlined environmental licensing rules. Regulatory barriers in some business services sectors prevent resources from being allocated efficiently, particularly regarding legal services. The by-laws governing professional bodies, in particular those concerning their statutes and internal rules, are restrictive and may hinder both natural and legal persons from gaining access to the relevant professions. This affects particularly legal professions, where, among other things, restrictions on advertising and multidisciplinary activities are prevalent.

               (13)

               Portugal is underperforming in science-business cooperation and in the commercialisation of knowledge. The barriers to cooperation between universities and the business sector are high, due to both regulatory and bureaucratic obstacles and the lack of incentives for cooperation in the academic system. This is detrimental to the employability of graduates and to innovation. The launch of the new short-cycle higher technical courses (TeSPs) has provided new opportunities for cooperation between the polytechnics and regional economic actors, but university programmes remain outside the modernisation process.

               (14)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Portugal's economic policy and published it in the 2016 country report. It has also assessed the Stability Programme and the National Reform Programme and the follow-up given to the recommendations addressed to Portugal in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Portugal but also their compliance with EU rules and guidance, given the need to strengthen the EU's overall economic governance by providing EU-level input into future national decisions. The recommendations under the European Semester are reflected in recommendations (1) to (5) below.

               (15)

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

               (16)

               In the light of the Commission's in-depth review and this assessment, the Council has examined the National Reform Programme and the Stability Programme. Its recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) to (5) below,

         HEREBY RECOMMENDS that Portugal take action in 2016 and 2017 to:

               1.

               Ensure a durable correction of the excessive deficit, in accordance with the relevant decisions or recommendations under the excessive deficit procedure, by taking the necessary structural measures and by using all windfall gains for deficit and debt reduction. Thereafter, achieve an annual fiscal adjustment of at least 0,6 % of GDP. Conduct, by February 2017, a comprehensive expenditure review and strengthen expenditure control, cost effectiveness and adequate budgeting at all levels of public administration. Ensure the long-term sustainability of the health sector, without compromising access to primary healthcare. Reduce the reliance of the pension system on budgetary transfers. By the end of 2016, refocus ongoing restructuring plans of state-owned enterprises.

               2.

               In consultation with social partners, ensure that the minimum wage is consistent with the objectives of promoting employment and competitiveness across sectors.

               3.

               Ensure the effective activation of the long-term unemployed and improve the coordination between employment and social services. Strengthen incentives for firms to hire through permanent contracts.

               4.

               Take measures, by October 2016, to facilitate the cleaning up of the balance sheets of credit institutions and address the high level of non-performing loans. Reduce the debt bias in corporate taxation and improve the access to finance for start-ups and small and medium-sized enterprises via the capital market.

               5.

               Increase transparency and efficiency in public procurement as regards public-private partnerships and concessions. By the end of 2016, improve and accelerate administrative and licensing procedures, accelerate tax litigations and reduce regulatory barriers, especially in business services. Incentivise cooperation between universities and the business sector.

      Done at Brussels, 12 July 2016.

            For the Council

            The President

         P. KAŽIMÍR

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  OJ C 96, 11.3.2016, p. 1.

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

      (5)  The structural balance as recalculated by the Commission based on the information in the Stability Programme, following the commonly agreed methodology.

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


title: Council Recommendation of 12 July 2011 on the National Reform Programme 2011 of Portugal

text:
               22.7.2011

               EN

               Official Journal of the European Union

               C 216/1

         COUNCIL RECOMMENDATION
   of 12 July 2011
   on the National Reform Programme 2011 of Portugal
   2011/C 216/01
   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 the recommendation of the European Commission,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Whereas:

               (1)

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

               (2)

               On 13 July 2010, the Council adopted a recommendation on the broad guidelines for the economic policies of the Member States and the Union (2010 to 2014) and, on 21 October 2010, adopted a decision on guidelines for the employment policies of the Member States (1), which together form the ‘integrated guidelines’. Member States were invited to take the integrated guidelines into account in their national economic and employment policies.

               (3)

               On 12 January 2011, the Commission adopted the first Annual Growth Survey, marking the start of a new cycle of economic governance in the EU and the first European semester of ex-ante and integrated policy coordination, which is anchored in the Europe 2020 strategy.

               (4)

               On 25 March 2011, the European Council endorsed the priorities for fiscal consolidation and structural reform (in line with the Council's conclusions of 15 February and 7 March 2011 and further to the Commission's Annual Growth Survey). It underscored the need to give priority to restoring sound budgets and fiscal sustainability, reducing unemployment through labour market reforms and making new efforts to enhance growth. It requested Member States to translate these priorities into concrete measures to be included in their Stability or Convergence Programmes and National Reform Programmes.

               (5)

               On 25 March 2011, the European Council also invited the Member States participating in the Euro Plus Pact to present their commitments in time to be included in their Stability or Convergence Programmes and their National Reform Programmes. Specific commitments and actions for 2011 are not explicitly communicated in the Portuguese National Reform Programme, but are expected to be submitted to the European Council.

               (6)

               On 23 March 2011, the Portuguese government submitted a Stability Programme for 2011-2014 to the national parliament, which rejected it. On 19 April 2011, the Portuguese government submitted a National Reform Programme. The proposed macroeconomic and fiscal scenarios and the policy recommendations have been overtaken by the Memorandum of Understanding signed on 17 May 2011.

               (7)

               On 17 May 2011, the Council adopted Implementing Decision 2011/344/EU to make available to Portugal medium-term financial assistance for a period of three years 2011-2014 in accordance with Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism (2). The accompanying Memorandum of Understanding signed on the same day and its successive supplements lay down the economic policy conditions on the basis of which the financial assistance is disbursed.

               (8)

               In 2010, Portugal's GDP grew at a rate of 1,3 %. Along with strong export growth, this positive growth performance was also due to exceptional factors that boosted private consumption. Price and cost developments were clearly not sufficient to boost competitiveness at a sufficiently fast rate to redress its current account deficit, which was high at 10 % of GDP in 2010. The weak overall economy and the steep increase in unemployment (11,2 % at the end of 2010) spilled into large government deficits, which exceeded 10 % of GDP in 2009 and 9 % in 2010, up from 3,5 % in 2008. The unfavourable developments in public finances associated with a bleak outlook for economic growth led, recently, to a deterioration of confidence and rising pressures in sovereign bond markets, raising concerns about the sustainability of its public finances. Following consecutive downgradings of Portuguese bonds by credit rating agencies, the country became unable to refinance itself at rates compatible with long-term fiscal sustainability. In parallel, the banking sector, which is heavily dependent on external financing, particularly within the euro area, was increasingly cut off from market funding.

               (9)

               Portugal committed itself to implementing the economic and financial adjustment programme with the aim of restoring confidence in its sovereign debt and in the banking sector and supporting growth and employment. It provides for comprehensive action on three fronts: (i) a credible and balanced fiscal consolidation strategy, supported by structural fiscal measures and better fiscal control; (ii) deep and frontloaded structural reforms, including in the labour and product markets; and (iii) efforts to safeguard the financial sector against disorderly deleveraging through market-based mechanisms supported by back-up facilities.

               (10)

               The Commission has assessed the National Reform Programme. It has taken into account not only its relevance for sustainable fiscal and socio-economic policy in Portugal but also its conformity with EU rules and guidance, given the need to strengthen the overall economic governance of the EU by providing EU-level input into future national decisions. In this context, the Commission stresses the urgency of implementing the planned measures to comply with Implementing Decision 2011/344/EU,

         HEREBY RECOMMENDS that Portugal:
   Implement the measures as laid down in Implementing Decision 2011/344/EU and further specified in the Memorandum of Understanding of 17 May 2011 and its subsequent supplements.

      Done at Brussels, 12 July 2011.

            For the Council

            The President

         J. VINCENT-ROSTOWSKI

      (1)  Maintained for 2011 by Council Decision 2011/308/EU of 19 May 2011 on guidelines for the employment policies of the Member States (OJ L 138, 26.5.2011, p. 56).

      (2)  OJ L 118, 12.5.2010, p. 1.


title: Council Recommendation of 21 March 2013 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (ninth EDF) for the financial year 2011

text:
               26.3.2013

               EN

               Official Journal of the European Union

               C 88/2

         COUNCIL RECOMMENDATION
   of 21 March 2013
   concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (ninth EDF) for the financial year 2011
   2013/C 88/02
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union,
   Having regard to the Partnership agreement between the members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 (1) and amended by the Agreement signed in Luxembourg on 25 June 2005 (2),
   Having regard to the Internal Agreement between Representatives of the Governments of the Member States, meeting within the Council, on the Financing and Administration of Community Aid under the Financial Protocol to the Partnership Agreement between the African, Caribbean and Pacific States and the European Community and its Member States signed in Cotonou (Benin) on 23 June 2000 and the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the EC Treaty applies (3) (the ‘Internal Agreement’), setting up, amongst others, the ninth European Development Fund (ninth EDF), and in particular Article 32(3) thereof,
   Having regard to the Financial Regulation of 27 March 2003 applicable to the ninth European Development Fund (4), and in particular Articles 96 to 103 thereof,
   Having examined the revenue and expenditure account and the balance sheet relating to the operations of the ninth EDF as at 31 December 2011 and the Annual Report of the Court of Auditors on the activities funded by the eighth, ninth and tenth European Development Funds (EDFs) (5), concerning the financial year 2011, together with the Commission's replies contained in that Annual Report,
   Whereas:

               (1)

               Pursuant to Article 32(3) of the Internal Agreement, the discharge for the financial management of the ninth EDF is to be given to the Commission by the European Parliament on the recommendation of the Council.

               (2)

               The overall implementation by the Commission of the operations of the ninth EDF during the financial year 2011 has been satisfactory,

         HEREBY RECOMMENDS that the European Parliament give the Commission a discharge in respect of the implementation of the operations of the ninth EDF for the financial year 2011.

      Done at Brussels, 21 March 2013.

            For the Council

            The President

         P. HOGAN

      (1)  OJ L 317, 15.12.2000, p. 3.

      (2)  OJ L 287, 28.10.2005, p. 4.

      (3)  OJ L 317, 15.12.2000, p. 355.

      (4)  OJ L 83, 1.4.2003, p. 1.

      (5)  OJ C 344, 12.11.2012, p. 243.


Avis juridique important

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31973H0185

73/185/EEC: Commission Recommendation of 15 May 1973 relating to the implementation by the original Member States of the Council Directive of 24 April 1972 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and to the enforcement of the obligation to insure against such liability

Official Journal L 194 , 16/07/1973 P. 0013 - 0013

COMMISSION RECOMMENDATION  of 15 May 1973  relating to the implementation by the original Member States of the Council Directive of 24 April 1972 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and to the enforcement of the obligation to insure against such liability  (73/185/EEC)  THE COMMISSION OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Economic Community, and id particular Article 155 thereof;  Whereas by virtue of the Council Directive of 24 April 1972 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability (1), as amended by the Council Directive of 19 December 1972 (2), the Member States must not later than 31 December 1973 bring into force the measures necessary to comply with that Directive ; whereas, however, the original Member States have declared that as regards vehicles normally based in their territory they would bring into force the appropriate measures within six months of notification of the Directive.  Whereas the original Member States have taken or are about to take the measures necessary to comply with the Directive, at least those which are required for the abolition by each of the Member States of checks on insurance against civil liability in respect of the use of vehicles normally based in the European territory of another original Member State;  Whereas the six national insurers' bureaux of the original Member States concluded an agreement on 16 October 1972 in accordance with the principles of the first indent of Article 2 (2) of the Directive as ascertained by the Commission in close cooperation with the original Member States ; whereas this agreement, which has been concluded for an undeterminate period, can be annulled if 12 months' notice is given;  Whereas, therefore, all the conditions have been, or are about to be, fulfilled enabling checks on insurance against civil liability to be abolished in relations between the original Member States ; whereas abolition of such checks may take effect before the abolition of checks which is required by the Directive for all Member States and the date of which is to be decided by the Commission subsequently;  MAKES THE FOLLOWING RECOMMENDATION:     Article 1 From 1 July 1973 each original Member State shall refrain from making checks on insurance against civil liability in respect of the use of vehicles which are normally based in the European territory of another original Member State and have not been the subject of notification under Article 4 (b) of the Council Directive of 24 April 1972.    Article 2 This Recommendation is addressed to the Kingdom of Belgium, the Federal Republic of Germany, the French Republic, the Italian Republic, the Grand Duchy of Luxembourg and the Kingdom of the Netherlands.    Done at Brussels, 15 May 1973.  For the Commission  The President  François-Xavier ORTOLI  (1)OJ No L 103, 2.5.1972, p. 1. (2)OJ No L 291, 28.12.1972, p. 162, correction in OJ No L 75, 23.3.1973, p. 30.