title: Council Recommendations — ‘Promoting the use of and sharing of best practices on cross-border videoconferencing in the area of justice in the Member States and at EU level’

text:
               31.7.2015

               EN

               Official Journal of the European Union

               C 250/1

         Council Recommendations
   ‘Promoting the use of and sharing of best practices on cross-border videoconferencing in the area of justice in the Member States and at EU level’
   (2015/C 250/01)
   THE COUNCIL OF THE EUROPEAN UNION,
   RECALLING:

               1.

               The Strategy on European e-Justice 2014-2018 adopted by the Council (Justice and Home Affairs) on 6 December 2013 (1);

               2.

               Paragraph 59 of the Strategy on European e-Justice 2014-2018, which stipulates that ‘if necessary, informal groups of the Member States involved in specific projects can meet in order to make progress in these areas of work (…)’;

               3.

               The Multiannual European e-Justice Action Plan 2014-2018 adopted by the Council (Justice and Home Affairs) on 6 June 2014 (2);

               4.

               The guidelines on the implementation of the Multiannual European e-Justice Action Plan 2014-2018 endorsed by the Council (Justice and Home Affairs) on 4 December 2014 (3), which set out the concrete steps for the follow-up of the Action Plan by the Working Party on e-Law (e-Justice), including the setting up of the informal working group on cross-border videoconferencing;

               5.

               The results of the informal working group on cross-border videoconferencing as set out in the final report (4) presented to the Working Party on e-Law (e-Justice);

         ACKNOWLEDGES that:

               6.

               Videoconferencing is a useful tool which has great potential not only at national level but also in particular in cross-border situations involving different Member States and even third countries. In cross-border cases smooth communication between the judicial authorities of the Member States is crucial. Videoconferencing is one possible way of simplifying and encouraging such communication. The advantages of videoconferencing were acknowledged by Union Law, that encouraged its use, inter alia, in cross border taking of evidence in civil and commercial matters (5) and in the European Small Claims Procedure (6), or regulated procedures for its use in criminal proceedings (7);

               7.

               Videoconferencing technology can be used in all types of judicial proceedings (both in criminal and civil/commercial matters) and it provides courts and prosecution offices with greater flexibility to take testimony from victims and witnesses, to hear experts’ opinions and to take suspects’ and defendants’ statements. Videoconferencing can help to reduce stress for vulnerable witnesses such as children. It also avoids travelling when victims, witnesses or experts from other Member States are required to give evidence. It also permits to provide immediate and effective safeguards such as the right to interpretation, the right to information, access to a lawyer to the suspect when arrested in a remote place (e.g. in case of an arrest in high sea). The use of such technology also reduces the cost of hearings for the national administrations. Significant cost and security benefits can be achieved by avoiding the transport of persons in custody;

               8.

               In the framework of European e-Justice, the Member States of the EU have already started to work together to promote the use of videoconferencing and to exchange experience and best practices. Such work takes place, inter alia, in the context of the Working Party on e-Law (e-Justice) at EU level;

               9.

               Work undertaken so far in the area of videoconferencing at national and EU level under the first European e-Justice Action Plan 2009-2013 has already produced significant results. The e-Justice Portal offers information on the use of videoconferencing facilities in court proceedings in cross-border situations in all official languages, including a manual and, for most Member States, relevant contact details;

               10.

               The second multiannual European Action Plan on e-Justice 2014-2018 aims to build upon the work already undertaken and to continue this positive development at national and European level. This work should also be seen as part of a broader development towards the modernisation of justice in the EU, taking into account the existing legal framework in this particular area and the need to respect the procedural safeguards in place at Member State and EU level;

         UNDERLINES that:

               11.

               As outlined in the Multiannual European e-Justice Action Plan 2014-2018, going to court and initiating extrajudicial proceedings in cross-border situations should be facilitated through the availability of communication by electronic means between courts and parties to proceedings, as well as witnesses, victims, experts and other participants;

               12.

               Furthermore, the use of videoconferencing, tele-conferencing or other appropriate means of long-distance communication for oral hearings, where appropriate, should be extended in order to remove the need to travel to court to take part in judicial proceedings, in particular in cross-border cases, and thus, through reduction of costs and efforts, contribute to effective access to justice;

               13.

               As indicated in the Multiannual e-Justice Action Plan 2014-2018, future work in this area should be expanded to further facilitate the organising and running of cross-border videoconferences in all Member States by promoting the use of IT tools to support and organise videoconferences and by enhancing interoperability for videoconferencing. This work should also include designing a common form for requesting/confirming a cross-border videoconference. The establishment of a network for exchanging experiences and sharing best practice on videoconferencing, including training, should also be considered. The participation of legal practitioners such as judges, public prosecutors, lawyers, mediators as well as legal interpreters in this work should be taken into account;

         WELCOMES:

               14.

               The work undertaken by the expert working group on cross-border videoconferencing to help improve the overall functioning of e-Justice systems in Member States and at a European level. The expert group was established in January 2014 under Austrian leadership with the aim of promoting the practical use of cross-border videoconferencing and sharing best practices and expertise on organisational, technical and legal aspects;

               15.

               The final report of the expert working group, presented in March 2015, with specific recommendations for future work in this area;

         TAKES NOTE of the fact that:
   (a)   Expert working group

               16.

               In its final report, the expert working group identified a number of technical, organisational and legal obstacles hindering the use of videoconferencing facilities by Member States in cross-border situations. The results showed that while it is true that existing legal requirements have to be respected, the majority of immediate problems that arise in cross-border situations are more of an organisational and technical nature. It is these issues which should in particular be addressed as a priority either in the short or medium term;

         (b)   e-Justice Portal

               17.

               In addition, the information already available on the e-Justice Portal should be updated and supplemented. In particular, future plans could include adding: links to EU legislation and legislation of the Member States regulating the use of videoconferencing; consolidated information on all courts with videoconferencing facilities in the Member States; tools for the practical arrangement of videoconferences (electronic forms, possibly a booking system in the long-term); links to national instructions or manuals, where available; a section on examples of videoconferencing in cross-border proceedings and a collection of best practices; information on training and online training modules and a link to the interconnected interpreters’ databases where available;

         (c)   Synergies with other projects

               18.

               Potential synergies with other projects, such as e-CODEX, the AVIDICUS projects (interpretation during a videoconference) and the European Judicial Training Network should also be taken into account. In addition to the information already available on the e-Justice Portal, existing useful material from other sources, including the Member States and Eurojust, should also be used as far as possible;

         (d)   Legal aspects

               19.

               Videoconferencing has gained legal recognition through international conventions and several EU legal acts, such as the Regulation on taking of evidence in civil and commercial matters, the Regulation establishing a European Small Claims Procedure and most recently, the Directive on the European Investigation Order in criminal matters;

               20.

               While bringing added protection to suspects, victims, witnesses and vulnerable persons, it should be ensured that videoconferencing is not detrimental to the defence’s rights; special care must be taken to ensure the principles of immediacy, equality of arms and contradiction are respected. This entails using equipment that is up-to-date, to achieve sufficient video and audio quality, and secure in proportion with the sensitivity of the case;

               21.

               The impact of legislative developments, including in particular the European Investigation Order, which sets a detailed procedure for use of the videoconferencing in criminal cases, on the different procedural rules and guarantees applicable in the requesting and executing Member States will therefore have to be assessed. Other legal issues related to videoconferencing also include the identification of competent authorities;

         CALLS ON THE MEMBER STATES TO:

               22.

               Consider implementing at national level the following measures with a view to improving interoperability between the Member States:

         (a)   Organisational aspects

               (a)

               Introduce a national videoconferencing contact point or contact points, where applicable, in each Member State. Consequently improve and update — in close cooperation with the Commission where necessary — the information on the e-Justice Portal (via the European Court Database) concerning national videoconferencing facilities, national videoconferencing contact points and relevant competent courts. Improve the organisation of contact points at national and court level;

               (b)

               For individual videoconferences, agree on a common language, if applicable, along with appropriate translation and interpretation services and which time-zone will be used to determine when the videoconference starts. If interpreter support is required in a videoconference, the Member States should be aware of and to the extent possible follow the advice gained from the AVIDICUS projects;

               (c)

               Without prejudice to judicial independence and differences in the organisation of the judiciary across the Union, offer effective training for potential users, including for judges and prosecutors, to increase their confidence and ability to run a cross-border videoconference;

         (b)   Technical aspects

               (d)

               Set up effective mechanisms, including an improved form for the effective exchange of variable and/or confidential videoconferencing parameters, in conjunction with public and static information on videoconferencing facilities for each Member State, to be published on the European e-Justice Portal;

               (e)

               Draft practical guidelines for users and technical planning and support staff on the recommended technical standards;

               (f)

               Improve interoperability between Member States by carrying out systematic practical tests between pairs of Member States to document working parameters. These can then be re-used to establish more reliable videoconferencing between Member States with sufficient audio and video quality;

               (g)

               As a minimum, implement the following technical standards in order to improve the quality of videoconferencing sessions:

                           —

                           Use a hardware-based video conferencing system (H.323/videoconference SIP),

                           —

                           Videoconferencing session to be IP–based,

                           —

                           Use firewall traversing infrastructure,

                           —

                           Use encrypted communications (AES-128),

                           —

                           Receive the presentation as a duo video (H.239) (8);

         (c)   Legal aspects

               (h)

               Assess the impact of adopted EU instruments, such as the European Investigation Order in relation to current procedural rules;

         INVITES THE WORKING PARTY ON E-LAW (E-JUSTICE) TO:

               23.

               Begin exploring practical possibilities and solutions for a coordinated approach with a view to initiating cooperation in the area of videoconferencing with third countries in addition to the bilateral contacts that Member States already have in place in this area;

               24.

               Continue the work undertaken in the framework of the expert working group on cross-border videoconferencing by setting up a network of cooperation between the Member States under the aegis within the Working Party on e-Law (e-Justice), with the aim of exchanging experiences and sharing best practices on videoconferencing, including training, on the basis of a proposal to be submitted by the expert working group. This network should:

                           (a)

                           Consider improving the use of videoconferencing facilities at the European level by creating secure ‘virtual videoconferencing meeting rooms’ where the participating Member States could dial-in;

                           (b)

                           Draft a clear step-by-step description (‘protocol’) for preparing and running cross-border videoconferences which fits with the typical judicial cross-border videoconferencing use-cases and combines all organisational, technical and judicial elements needed;

                           (c)

                           Provide guidance for users on typical judicial use-cases which would benefit most from increased and better use of cross-border videoconferencing;

                           (d)

                           Improve electronic sending of forms for requests for cross-border mutual legal assistance by combining dynamic form functions from the European e-Justice Portal with e-CODEX, e.g. forms for ‘direct taking of evidence’ and ‘(indirect) taking of evidence’;

                           (e)

                           Devise tools to help judicial authorities identify the legal instrument applicable for the organisation of a particular videoconference;

                           (f)

                           Devise tools to help judicial authorities identify the competent authority for the organisation of a particular videoconference;

                           (g)

                           Identify the arrangements that should be made to guarantee the procedural safeguards in the exercise of the rights of the defence; and

                           (h)

                           Ensure sustainability of the work by:

                                       —

                                       monitoring the implementation of improvement actions and projects,

                                       —

                                       monitoring new videoconferencing technologies,

                                       —

                                       suggesting new actions and projects for further improvements;

         INVITES THE EUROPEAN COMMISSION TO:

               25.

               Publish the final report of the expert group on cross-border videoconferencing on the e-Justice Portal for wider dissemination among legal practitioners and other interested parties;

               26.

               Financially support the implementation at national level of the measures set out in paragraph 22 aimed at ensuring the cross-border interoperability of videoconferencing facilities in as far as this produces European added value in line with the applicable funding instruments.

      (1)  OJ C 376, 21.12.2013, p. 7.

      (2)  OJ C 182, 14.6.2014, p. 2.

      (3)  15771/14

      (4)  8364/15 + ADD

      (5)  Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters (OJ L 174, 27.6.2001, p. 1).

      (6)  Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European Small Claims Procedure (OJ L 199, 31.7.2007, p. 1).

      (7)  Convention of 29 May 2000 on mutual legal assistance in criminal matters between the Member States of the European Union.

      (8)
   Note: it might be necessary to use ISDN as backup solution, if a videoconferencing partner does not support IP yet.


title: Recommendation for a Council opinion on the updated stability programme of Belgium, 2007-2011

text:
   EN
EN    EN
 ---pagebreak---      COMMISSION OF THE EUROPEAN COMMUNITIES
                                     Brussels, 11.6.2008
                                     SEC(2008) 2013 final
                     Recommendation for a
                     COUNCIL OPINION
   On the updated stability programme of Belgium, 2007-2011
                 (presented by the Commission)
EN                                                          EN
 ---pagebreak---                                    EXPLANATORY MEMORANDUM
   1.        GENERAL BACKGROUND
   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 2005 reform of the Pact acknowledged its usefulness
   in anchoring fiscal discipline but sought to strengthen its effectiveness and economic
   underpinnings as well as to safeguard the sustainability of the public finances in the long run.
   Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary
   positions and the surveillance and coordination of economic policies1, which is part of the
   Stability and Growth Pact, stipulates that each Member State has to submit, to the Council and
   the Commission, a stability or convergence programme and annual updates thereof. Member
   States that have already adopted the single currency submit (updated) stability programmes
   and Member States that have not yet adopted it submit (updated) convergence programmes.
   The first stability programme of Belgium was submitted in December 1998. In accordance
   with the Regulation, the Council delivered an opinion on it on 15 March 1999 on the basis of
   a recommendation from the Commission and after having consulted the Economic and
   Financial Committee. As regards updated stability and convergence programmes, the
   regulation foresees that these are assessed by the Commission and examined by the
   Committee and if necessary and following the same procedure as set out above, the updated
   programmes may be examined by the Council.
   2.        BACKGROUND FOR THE ASSESSMENT OF THE UPDATED PROGRAMME
   The Commission has examined the most recent update of the stability programme of Belgium,
   submitted on 21 April 2008, and is recommending a Council opinion on it (see box for the
   main points covered by the assessment).
   In order to set the scene against which the budgetary strategy in the updated stability
   programme is assessed, the following paragraphs summarise:
   (1)     the most recent assessment of the country’s position under the preventive arm of the
           Stability and Growth Pact (summary of the Council opinion on the previous update of
           the stability programme);
   (2)     the orientations for budgetary policies adopted by the April 2007 Eurogroup;
   (3)     the May 2008 update of the country-specific broad economic policy guidelines in the
           area of budgetary policies;
   (4)     the Commission’s assessment of the October 2007 implementation report of the
           national reform programme.
   1
           OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174,
           7.7.2005, p. 1). The documents referred to in this text are available at:
           http://ec.europa.eu/economy_finance/about/activities/sgp/main_en.htm.
EN                                                         2                                          EN
 ---pagebreak---    2.1.       The assessment in the Council opinion on the previous update
   In its opinion of 27 March 2007, the Council summarised its assessment of the previous
   update of the stability programme, covering the period 2006-2010, as follows. "The Council
   considers that the strategy of a continued reduction of the still high debt stock provides an
   example of fiscal policies conducted in compliance with the Pact. However, while the
   programme foresees a gradual build-up of surpluses (notably through reduced interest
   expenditure) starting from a balanced position in nominal terms, there are some risks to the
   achievement of the budgetary targets. Nevertheless, the medium-term objective is expected to
   be reached within the programme period."
   In view of its assessment, the Council invited Belgium to "ensure that the budgetary target for
   2007 is met and strengthen the pace of adjustment towards the MTO thereafter, including
   through a reduction of the recourse to one-off measures" and "in the light of the high level of
   debt and the projected increase in age-related expenditure, to better address the long-term
   sustainability of public finances by at least achieving the MTO as well as by implementing
   reforms."
   2.2.       Orientations for budgetary policies adopted by the Eurogroup in April 2007
   On 20 April 2007, with a view to improving the coordination of fiscal policies in the euro
   area, Eurogroup ministers discussed national budgetary developments in 2007 and the
   preliminary policy outlook for 2008 and their implications for the euro area.
   Reaffirming their adherence to the sound fiscal policy principles of the revised Stability and
   Growth Pact and to national fiscal rules, Ministers committed to (i) build on the better-than-
   expected budgetary outcomes in 2006 to pursue more ambitious budgetary targets than those
   set in the end-2006 updates of the stability programmes; (ii) implement their 2007 budgets as
   planned, avoiding expenditure overruns, and using unexpected extra revenues to reduce
   government deficit and debt; and (iii) carefully design fiscal policy plans for 2008 so as to
   accelerate the adjustment towards the MTO for Member States which have not reached it and
   for those which have reached it to avoid feeding macroeconomic imbalances overall2.
   2.3.       May 2008 update of the country-specific broad economic policy guidelines in the
              area of budgetary policies
   On 14 May 2008, the Council adopted a recommendation on the 2008 update of the broad
   guidelines for the economic policies of the Member States and the Community and on the
   implementation of Member States' employment policies3. In the area of budgetary policies,
   Belgium was recommended to “strengthen fiscal consolidation” and was encouraged to focus
   on “fully implementing the strategy aiming to ensure the long term sustainability of public
   finances, including expenditure restraints, fiscal surpluses, and a persistent reduction of
   government debt”. In addition, all euro area Member States were recommended to “continue
   pursuing budgetary consolidation towards their medium-term objectives in line with the
   Stability and Growth Pact, hence striving to achieve an annual structural adjustment of at least
   0.5 % of GDP as a benchmark” and “to improve the quality of public finances by reviewing
   2
            The entire statement can be found at:
            www.gouvernement.lu/salle_presse/actualite/2007/04/20pm_krecke_berlin/MTBR_EG_conclusions-
            finalCLEAN.rtf
   3
            OJ L 139, 29.5.2008, p. 59.
EN                                                      3                                              EN
 ---pagebreak---    public expenditures and taxation, and by modernising public administration, with the intention
   to enhance productivity and innovation, thereby contributing to economic growth,
   employment and fiscal sustainability”.
   2.4.     The Commission assessment of the October 2007 implementation report of the
            national reform programme
   On 11 December 2007, the Commission adopted its Strategic Report on the renewed Lisbon
   strategy for growth and jobs, which includes an assessment of the October 2007
   implementation report of Belgium’s national reform programme4 and is summarised as
   follows.
   Belgium’s national reform programme identifies as key priorities in order to create growth
   and jobs: the sustainability of public finances; the reduction of labour costs; the creation of a
   more dynamic labour market; the stimulation of the economy through investment and
   reforms; strengthening the social security system; and strengthening the synergies between
   environmental protection and growth. The Commission's assessment is that Belgium has
   made good progress in implementing its national reform programme over the 2005-2007
   period, despite some slowdown in the pace of reforms in 2007.
   Against the background of the strengths and weaknesses identified and the evidence on
   progress made, the Commission recommended that Belgium was recommended to give
   highest priority to the challenges in the areas of the high tax-burden on labour, whilst
   strengthening fiscal consolidation and improving labour market performance.
   In addition, Belgium should also focus on the areas of: long term sustainability of public
   finances; the competition in gas and electricity markets; R&D and innovation performance;
   and the employment rate for older workers and vulnerable groups.
   Based on the Commission Strategic Report, the Council adopted on 14 May 2008
   recommendations on the 2008 update of the broad guidelines for the economic policies of the
   Member States, including Belgium.
   4
           Communication from the Commission to the European Council, “Strategic report on the renewed
           Lisbon strategy for growth and jobs: launching the new cycle (2008-2010)” - COM(2007) 803,
           11.12.2007.
EN                                                   4                                                 EN
 ---pagebreak---                                     Box: Main points covered by the assessment
   As required by Article 5(1) (for stability programmes) and Article 9(1) (for convergence programmes)
   of Council Regulation (EC) No 1466/97, the assessment covers the following points:
   • whether the economic assumptions on which the programme is based are plausible;
   • the medium-term budgetary objective (MTO) presented by the Member State and whether the
       adjustment path towards it is appropriate;
   • whether measures being taken and/or proposed to respect that adjustment path are sufficient to
       achieve the MTO over the cycle;
   • when assessing the adjustment path towards the MTO, whether a higher adjustment effort is made
       in economic good times, whereas the effort may be more limited in economic bad times, and, for
       euro-area and ERM II Member States, whether the Member State pursues an annual improvement
       of the cyclically-adjusted balance, net of one-off and other temporary measures, of 0.5% of GDP as
       a benchmark to meet its MTO;
   • when defining the adjustment path to the MTO (for Member States that have not yet reached it) or
       allowing a temporary deviation from the MTO (for Member States that have), the implementation
       of major structural reforms which have direct long-term cost-saving effects (including by raising
       potential growth) and therefore a verifiable impact on the long-term sustainability of public
       finances (subject to the condition that an appropriate safety margin with respect to the 3% of GDP
       reference value is preserved and that the budgetary position is expected to return to the MTO
       within the programme period), with special attention for pension reforms introducing a multi-pillar
       system that includes a mandatory, fully-funded pillar;
   • whether the economic policies of the Member State are consistent with the broad economic policy
       guidelines.
   The plausibility of the programme’s macroeconomic assumptions is assessed by reference to the
   Commission services’ spring 2008 forecast, using also the commonly agreed methodology for the
   estimation of potential output and cyclically-adjusted balances.
   The assessment also examines:
   • the evolution of the debt ratio and the outlook for the long-term sustainability of the public
       finances, which should be given “sufficient attention in the surveillance of budgetary positions”
       according to the Council report of 20 March 2005 on “Improving the implementation of the
       Stability and Growth Pact”. A Commission Communication of 12 October 2006 sets out the
       approach to the assessment of long-term sustainability5;
   • the degree of consistency with the national reform programme, submitted by Member States in the
       context of the Lisbon strategy for growth and jobs, and its October 2007 implementation report. In
       its cover note of 7 June 2005 to the European Council on the broad economic policy guidelines for
       the period 2005-2008, the ECOFIN Council stated that the national reform programmes should be
       consistent with the stability and convergence programmes;
   • compliance with the code of conduct6, which inter alia prescribes a common structure and set of
       data tables for the stability and convergence programmes.
   5
             Communication from the Commission to the Council and the European Parliament, “The long-term
             sustainability of public finances in the EU” - COM(2006) 574, 12.10.2006 - and European Commission,
             Directorate-General for Economic and Financial Affairs (2006), “The long-term sustainability of public
             finances in the European Union”, European Economy No 4/2006.
   6
             “Specifications on the implementation of the Stability and Growth Pact and guidelines on the format
             and content of stability and convergence programmes”, endorsed by the ECOFIN Council of 11
             October 2005.
EN                                                           5                                                      EN
 ---pagebreak---                                             Recommendation for a
                                            COUNCIL OPINION
                      On the updated stability programme of Belgium, 2007-2011
   THE 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
   policies7, 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:
   (1)     On [8 July 2008] the Council examined the updated stability programme of Belgium,
           which covers the period 2007 to 20118.
   (2)     Over the last 10 years, real GDP has grown by some 2¼% on average, slightly above
           the average growth rate in the euro area. This relatively high GDP growth led to a
           decline in the unemployment rate, while the employment rate (especially of the
           younger and older workers) and the hours worked remain low, reflecting high labour
           taxation and labour market rigidities, low job search requirements and a low effective
           retirement age. The budget has been hovering around a balanced position since 2000
           (except in 2005), and the debt ratio, which had fallen from 134% of GDP in 1993 to
           108% of GDP in 2000, continued its impressive decline and is now below 85% of
           GDP. Increasing the employment rate, together with ambitious budgetary positions,
           would contribute to the long-term sustainability of public finances.
   (3)     The macroeconomic scenario underlying the programme projects real GDP growth to
           fall from 2.8% in 2007 to 1.9% in 2008 and stabilise around 2% in the following
   7
           OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174,
           7.7.2005, p. 1). The documents referred to in this text can be found at the following website:
           http://ec.europa.eu/economy_finance/about/activities/sgp/main_en.htm.
   8
           The update was submitted once a government with full powers had been installed, thus well beyond the
           1 December deadline set in the code of conduct.
EN                                                         6                                                    EN
 ---pagebreak---        years. Assessed against currently available information9, the scenario for 2008 and
       2009 appears to be based on favourable growth assumptions given the deteriorated
       external environment and higher inflation since the projections included in the
       programme were finalised. Growth assumptions for 2010-2011 are broadly plausible.
       The programme update expects inflation to rise to 3.0% in 2008, and to slow down to
       1¾% over the period 2009-2011. The programme's inflation projections for 2008-2009
       appear to be on the low side in view of the marked rise in commodity and processed
       food prices in recent months. Furthermore, the employment growth projections of
       around 1% per annum in the programme update appear to be relatively high in view of
       below-potential GDP growth throughout the programme period. While the
       programme's wage growth projections are on the low side for 2008, they appear high
       for the following years (3¼ - 3½ %), especially compared to the projected low
       inflation rate.
   (4) For 2007, the general government deficit was 0.2% of GDP, against a surplus target of
       0.3% of GDP set in the previous update of the stability programme. The worse outturn
       in 2007 was due to higher expenditure growth than planned which was only partly
       offset by a small positive base effect from a better-than-expected outcome in 2006 and
       a positive revenue growth surprise. Higher-than-planned expenditure reflected, in
       particular, a strong increase in subsidies paid to companies under the service voucher
       scheme and a lower-than-expected impact of one-off measures. The revenue surprise
       resulted chiefly from higher-than-expected social contributions and occurred in spite
       of the non-implementation of a number of planned revenue-increasing one-offs. The
       budgetary implementation in 2007 was thus not fully in line with the invitation in the
       Council opinion of 27 March 2007 on the previous update of the stability programme10
       and with the April 2007 Eurogroup orientations for budgetary policies, since
       unexpected extra revenue was used for higher-than-budgeted expenditure.
   (5) The main goal of the medium-term budgetary strategy in the programme is to ensure a
       continuous reduction of the still high debt ratio of close to 85% of GDP in 2007 to
       around 71% of GDP in 2011 through a gradual build-up of headline budgetary
       surpluses to 1% of GDP in 2011, starting from a balanced budget in 2008. The
       primary surplus, which has been decreasing since 2001 (from 7.0% to 3.7% of GDP in
       2007) in parallel to the progress in debt reduction, is projected to increase to 4.4% of
       GDP by 2011. As a result of the worse-than-expected outturn in 2007, the budgetary
       targets (both in nominal and structural terms) are below the ones in the previous
       update throughout the programme period. The structural balance, calculated according
       to the commonly agreed methodology, is expected to improve from a deficit of ¼% of
       GDP in 2007 to a surplus of almost 1½% of GDP in 2011. Compared to what was
       envisaged in the previous update of the stability programme, the achievement of the
       medium-term objective (MTO) - a surplus of 0.5% of GDP in structural terms (i.e. in
       cyclically-adjusted terms net of one-off and other temporary measures) - is delayed by
       one year to 2009. The adjustment takes place on both the expenditure and revenue
       side. The planned expenditure reduction of 0.7 percentage point of GDP in nominal
       terms is attributable chiefly to a fall in interest expenditure which results from the
       projected decline in the debt ratio. The revenue increase amounts to 0.5% of GDP and
   9
       The assessment takes notably into account the Commission services' spring 2008 forecast and the
       Commission assessment of the October 2007 implementation report of the national reform programme.
   10
       OJ C 89, 24.4.2007, p. 2.
EN                                                7                                                      EN
 ---pagebreak---        follows from the expected growth of tax bases. In contrast to the previous update, the
       programme explicitly foresees no further recourse to one-off measures after 2008.
   (6) The budgetary outcomes could be worse than projected in the programme. First, the
       macroeconomic environment could be worse than projected in the programme update,
       especially in 2008 and 2009. In particular, the favourable assumptions regarding
       employment, wage and consumption growth may have led to an overestimation of tax
       revenue. In addition, the expected overall tax elasticity seems on the high side in 2008.
       Regarding primary expenditure, the programme does not include measures that seem
       necessary to achieve the planned adjustment in a context of rising ageing-related costs
       and relatively strong projected wage increases. Moreover, excluding the reduction in
       interest expenditure, the composition of the adjustment is geared strongly to the
       revenue side, possibly reducing the sustainability of the adjustment. Finally, whilst the
       budget remained broadly in balance over the last years, the achievement of the aimed-
       for budget surpluses was postponed. In spite of the good macroeconomic conditions in
       2007, the budgetary target was not reached in the absence of a government with full
       powers following the federal elections in June. In 2008, further measures seem
       necessary to achieve the target. In view of the risks to the macro-economic outlook
       and the budgetary targets mentioned above, the development of the debt ratio is likely
       to be somewhat less favourable than projected in the programme, although the debt
       remains on a firm downward path.
   (7) In view of this risk assessment, the budgetary stance in the programme may not be
       sufficient to ensure that the MTO is achieved by 2009, as envisaged in the programme.
       However, a sufficient safety margin against breaching the 3% of GDP deficit threshold
       with normal cyclical fluctuations will be provided throughout the programme period.
       The pace of adjustment towards the MTO implied by the programme should be
       strengthened in 2008 by implementing additional structural budgetary measures in the
       context of the planned budget control exercise in order to ensure that the objective of a
       balanced budget is met. In 2009, it should be backed up by measures, in particular on
       the expenditure side, to be in line with the 0.5 % of GDP benchmark improvement
       specified in the Stability and Growth Pact and to reach the MTO as planned. The
       Council also notes that the budgetary plans for 2008 are not fully consistent with the
       April 2007 Eurogroup orientations for budgetary policies. Although the debt ratio may
       decrease less than projected in the programme, it seems to be sufficiently diminishing
       towards the reference value over the programme period.
   (8) Belgium appears to be at medium risk with regard to the sustainability of public
       finances. The long-term budgetary impact of ageing is above the EU-27 average,
       influenced notably by a relatively high increase in pension expenditure as a share of
       GDP over the coming decades. The effective retirement age in Belgium is one of the
       lowest in the EU, and raising it is the aim of the Generation Pact which brought a
       number of changes to the pension system. Although this represents a step in the right
       direction, national projections show that this reform would not reduce the
       sustainability gaps. The budgetary position in 2007 as estimated in the programme,
       though slightly worse than the starting position of the previous programme,
       contributes to offsetting the projected long-term budgetary impact of population
       ageing but is not sufficient to fully offset future spending pressures. Maintaining high
       primary surpluses over the medium term, bringing the debt ratio below the Treaty
       reference value and implementing further measures aimed at addressing the substantial
EN                                              8                                                EN
 ---pagebreak---            increase in age-related expenditure would contribute to reducing risks to the
           sustainability of public finances.
   (9)     The stability programme seems to be consistent to some extent with the October 2007
           implementation report of the national reform programme. In particular, both reports
           consider the sustainability of public finances in light of population ageing as a key
           challenge for the Belgium economy. The stability programme however does not
           contain a qualitative assessment of the overall impact of the October 2007
           implementation report of the national reform programme within the medium-term
           fiscal strategy nor systematic information on the direct budgetary costs or savings of
           the main reforms envisaged in the national reform programme. On the other hand, the
           budgetary projections of the programme seem to take into account the public finance
           implications of the actions already implemented on the basis of the national reform
           programme.
   (10)    The budgetary strategy in the programme is broadly consistent with the country-
           specific broad economic policy guidelines included in the integrated guidelines and
           the guidelines for euro area Member States in the area of budgetary policies issued in
           the context of the Lisbon strategy.
   (11)    As regards the data requirements specified in the code of conduct for stability and
           convergence programmes, the programme has some gaps in the required and optional
           data11.
   The overall conclusion is that, after an impressive reduction in the debt ratio since 1993 to
   85% in 2007, the programme envisages a continued and rapid reduction through a gradual
   build-up of headline surpluses following the budgetary deterioration in 2007. The budgetary
   consolidation mainly builds upon a reduction in interest expenditure and an increase in tax
   revenue, while efforts on primary expenditure remain small. There are risks to the
   achievement of the budgetary targets particularly in view of the relatively favourable
   underlying macroeconomic assumptions and the fact that the programme does not specify
   measures which seem required to meet the targets. The adjustment to the MTO in 2008 does
   not appear to be sufficient and it seems unlikely that the MTO will be met in 2009, as
   planned, in the absence of additional measures.
   In view of the above assessment and also in the light of the April 2007 Eurogroup orientations
   for fiscal policies Belgium is invited to:
   (i)       ensure that the objective of a balanced budget is met in 2008 and the MTO is
             obtained in 2009 by carrying out the benchmark adjustment in structural terms of
             0.5% of GDP, including through the implementation of additional structural
             measures, in particular on the expenditure side;
   (ii)      in the light of the still high level of debt and the projected increase in age-related
             expenditure, continue addressing the long-term sustainability of public finances by
             achieving high structural primary surpluses as well as by implementing reforms to
             increase the employment rate and potential growth and to reduce the budgetary cost
             of ageing.
   11
           In particular, the data on the sectoral balances are not provided.
EN                                                          9                                       EN
 ---pagebreak---                      Comparison of key macroeconomic and budgetary projections
                                                                2006      2007        2008      2009       2010        2011
                                           SP Apr 2008            2.8       2.7        1.9        2.0        2.0        2.0
                Real GDP
                                          COM Apr 2008            2.8       2.7        1.7        1.5       n.a.        n.a.
               (% change)
                                           SP Dec 2006            2.7       2.2        2.1        2.2        2.2       n.a.
                                           SP Apr 2008            2.3       1.8        3.0        1.7        1.8        1.8
             HICP inflation
                                          COM Apr 2008            2.3       1.8        3.6        2.3       n.a.        n.a.
                   (%)
                                           SP Dec 2006            2.4       1.9        1.8        1.8        1.9       n.a.
                                           SP Apr 2008            0.1       0.3       -0.1       -0.4       -0.5       -0.8
               Output gap1
                                         COM Apr 20082            0.1       0.3       -0.3       -1.0       n.a.        n.a.
         (% of potential GDP)
                                           SP Dec 2006           -0.3      -0.4       -0.4       -0.4       -0.3       n.a.
    Net lending/borrowing vis-à-           SP Apr 2008           n.a.      n.a.        n.a.      n.a.       n.a.       n.a.
        vis the rest of the world         COM Apr 2008            3.4       3.2        2.6        2.4       n.a.        n.a.
               (% of GDP)                  SP Dec 2006            2.0       2.0        2.2        2.4        2.7       n.a.
                                           SP Apr 2008            0.3      -0.2        0.0        0.3        0.7        1.0
     General government balance
                                          COM Apr 2008            0.3      -0.2       -0.4       -0.6       n.a.        n.a.
               (% of GDP)
                                           SP Dec 2006            0.0       0.3        0.5        0.7        0.9       n.a.
                                           SP Apr 2008            4.3       3.7        3.7        3.8        4.1        4.3
            Primary balance
                                          COM Apr 2008            4.3       3.7        3.3        2.9       n.a.        n.a.
               (% of GDP)
                                           SP Dec 2006            4.1       4.2        4.1        4.1        4.2       n.a.
                                           SP Apr 2008            0.3      -0.4        0.0        0.5        1.0        1.4
     Cyclically-adjusted balance1
                                          COM Apr 2008            0.3      -0.3       -0.2       -0.1       n.a.        n.a.
               (% of GDP)
                                           SP Dec 2006            0.2       0.5        0.7        0.9        1.1       n.a.
                                           SP Apr 2008           -0.4      -0.3        0.0        0.5        1.0        1.4
           Structural balance3
                                          COM Apr 2008           -0.6      -0.3       -0.2       -0.1       n.a.        n.a.
               (% of GDP)
                                           SP Dec 20064          -0.4       0.1        n.a.      n.a.       n.a.       n.a.
                                           SP Apr 2008          88.2      84.9        81.5       78.1       74.7       71.1
        Government gross debt
                                          COM Apr 2008          88.2      84.9        81.9       79.9       n.a.        n.a.
               (% of GDP)
                                           SP Dec 2006          87.7      83.9        80.4       76.6       72.6       n.a.
      Notes:
      1
        Output gaps and cyclically-adjusted balances from the programmes as recalculated by Commission services on the basis
   of the information in the programmes.
      2
        Based on estimated potential growth of 2.5%, 2.5%, 2.2% and 2.2% respectively in the period 2006-2009.
      3
        Cyclically-adjusted balance excluding one-off and other temporary measures. According to the most recent programme,
   one-off and other temporary measures are deficit-reducing for 0.7% of GDP in 2006 and deficit-increasing for 0.1% of GDP
   in 2007. According to the Commission services' spring forecast, one-off and other temporary measures are deficit-reducing
   for 0.9% of GDP in 2006 and deficit-increasing for 0.1% in 2007.
      4
        The December 2006 update of the stability programme did not provide information on the use of one-off measures in
   the years 2008 to 2010.
      Source:
      Stability programme (SP); Commission services’ spring 2008 economic forecasts (COM); Commission services’
   calculations
EN                                                             10                                                            EN


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31985K0122

85/122/ECSC: Commission Recommendation of 4 February 1985 amending Recommendation No 1835/81/ECSC on the obligation to publish price lists and conditions of sale and on prohibited practices in the steel trade

Official Journal L 046 , 15/02/1985 P. 0054 - 0055 Spanish special edition: Chapter 08 Volume 2 P. 0160  Portuguese special edition Chapter 08 Volume 2 P. 0160

*****COMMISSION  RECOMMENDATION  of 4 February 1985  amending recommendation No 1835/81/ECSC on the obligation to publish price lists and conditions of sale and on prohibited practices in the steel trade  (85/122/ECSC)  THE COMMISSION OF THE EUROPEAN  COMMUNITIES,  Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 63 (3) thereof,  Whereas:  Member States were required by the provisions of Commission recommendation No 1835/81/ECSC (1), as last amended by recommendation No 1946/84/ECSC (2), to ensure that steel distributive undertakings, from 1 January 1983 to 31 December 1985, complied with rules on publication of prices and conditions of sale and on prohibited practices in the steel trade.  The following in particular were not required to comply with these rules:  (i) 'intermediate' steel dealers who buy exclusively from other Community dealers, irrespective of their resale figures;  (ii) dealers of all kinds whose annual resale figures, including those of their subsidiary companies or branches, amount to less than 3 000 tonnes of special steels or 6 000 tonnes of all steels.  Whilst the aforementioned steel dealers, whose individual importance is limited but whose effect on the market should be taken into account in view of their number, do not normally play a major role in the market; however, experience has shown that - as a result of their freedom of action - the activities of small stockholders or intermediate dealers have had a crucial influence on the price levels of certain categories or qualities of steel in a number of regions of the Community where imbalances in the market and in the steel trade have been observed.  It is therefore appropriate that such a significant number of steel dealers, whose actions may have a detrimental effect on prices and give rise to discrimination, should no longer be exempt from the rules in questions.  It is important for the stability of the steel market, for which 1985 is a crucial year, that all steel dealers be henceforward covered by the rules in force.  However, all small stockholders need not be obliged to comply with all the rules imposed hitherto on larger dealers; some small stockholders may be exempted from the obligation to publish prices and conditions of sale where the prices they charge are necessarily linked, with an appropriate margin, to the prices published by the dealers and producers who supply them.  Care should also be taken not to subject small stockholders to administrative requirements disproportionate to their usual operating and management procedures. Likewise, the relevant departments in the Member States responsible for implementing recommendation No 1835/81/ECSC should not be unduly burdened. Moreover, the scope of that recommendation should be limited to undertakings or bodies which usually carry out distribution activities other than sales to domestic consumers or the craft sector.  It is sufficient to require dealers not obliged to publish prices and conditions of sale to have their own price lists to prove that prices have been charged in accordance with Articles 8 to 15 of recommendation No 1835/81/ECSC and to show that they have not made discriminatory sales by applying dissimilar conditions to comparable transactions; similarly, a steel dealer who aligns his prices on an offer from a dealer who is not obliged to publish must show that the conditions for alignment obtained and that such alignment has been imposed by the effective competition of that dealer.  HAS ADOPTED THIS RECOMMENDATION:  Article 1  Recommendation No 1835/81/ECSC is hereby amended as follows:  1. Article 2 (1) is replaced by the following:  '1. This recommendation shall be applicable to distributive undertakings in the Community which effect, on their own account, direct and/or ex-stock sales, within the common market, of the steel products defined in Annex I to the Treaty, with the exception of scrap, provided that:  - they are not selling agencies as defined in Decision No 30-53 (1), as amended by Decision No 1834/81/ECSC (2);  or  - they regularly exercise a distribution activity other than sales to domestic consumers or the craft trades,  hereinafter called "steel dealers".  (1) OJ ECSC, 4. 5. 1953, p. 109.  (2) OJ No L 184, 4. 7. 1981, p. 7.'  2. Article 2 (3) is deleted and paragraph 4 becomes paragraph 3.  3. Article 3 is replaced by the following:  'Article 3  '1. Steel dealers whose sales figures between 1 January and 31 December 1984 were at least 2 000 tonnes of special steels or at least 4 000 tonnes of all steels shall be obliged to publish price lists and conditions of sale in respect of direct and ex-stock sales in accordance with the provisions laid down in Articles 4 to 8 and to communicate them to an administrative department designated by the Member State.  A parent steel-trading company may publish price lists and conditions of sale which are also valid for its subsidiary companies and branches.  2. Steel dealers who are not obliged to publish price lists and conditions of sale because they do not meet the conditions set out in paragraph 1 are none the less required to draw up their own price lists and to make them available to the department designated by the Member State for the purpose of the checks provided for in Article 15.'  Article 2  Member States shall take the necessary measures to comply with this recommendation not later than 1 March 1985. They shall forthwith inform the Commission thereof.  Article 3  This recommendation is addressed to the Member States.  Done at Brussels, 4 February 1985.  For the Commission  Karl-Heinz NARJES  Vice-President  (1) OJ No L 184, 4. 7. 1981, p. 9.  (2) OJ No L 180, 7. 7. 1984, p. 28.


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31976H0223

76/223/EEC: Commission Recommendation of 5 February 1976 to the Member States concerning units of measurement referred to in patent conventions

Official Journal L 043 , 19/02/1976 P. 0022 - 0024 Greek special edition: Chapter 13 Volume 3 P. 0192  Spanish special edition: Chapter 13 Volume 4 P. 0241  Portuguese special edition Chapter 13 Volume 4 P. 0241

COMMISSION RECOMMENDATION  of 5 February 1976  to the Member States concerning units of measurement referred to in patent conventions  (76/223/EEC) I    1. On 18 October 1971 the Council adopted Directive 71/354/EEC on the approximation of the laws of the Member States relating to units of measurement (1). This Directive was supplemented by the documents concerning the accession to the European Communities of the Kingdom of Denmark, Ireland, the Kingdom of Norway and the United Kingdom of Great Britain and Northern Ireland (2) to take account of the units of the "imperial system" officially used in the United Kingdom and Ireland.  The aim of the Directive is to clarify and simplify the whole question of units of measurement by prescribing the use of the units of the international system (SI units) as defined by the general conference of weights and measures (CGPM) set up by the Metre Convention signed in Paris on 20 May 1875, to which all the Member States are party.  The Council's decision to prescribe the use of the SI system was extremely important even before the enlargement of the Community. Although the original Member States were all "metric" States they did not all use the same system of units since there are several "metric systems" for example, the c.g.s. system (centimetre, gramme, second), the M.T.S. system (metre, tonne, second), the M.Kf.s. system (metre, kilogramme-force, second), the M.K.S. system (metre, kilogramme, second) and lastly the M.K.S.A. or Giorgi system (metre, kilogramme, second, ampere) which finally led to the units of the present international system, recognized throughout the world and the only system prescribed by the Directive. Moreover, it was because the general conference of weights and measures confirmed and recognized the consistency of the international system (SI), that the Council of the European Communities, on a proposal from the Commission, decided to adopt this system of units and make it mandatory and official.  Units derived from this system are obtained by combining base units without using numerical factors, which differs greatly from the practice in other systems of units.  The Directive, as amended by the documents concerning accession, lays down the procedure and the particular stages for the gradual elimination of non-SI units, in particular the units of the British imperial system, and is intended to result in the sole use of units belonging to the international system in all Member States of the Communities.  The scope of the Directive is clearly shown in Article 2, since the obligation to use SI units relates to:  "measuring instruments used, measurements made and indications of quantity expressed in units, whether for economic, public health, public safety or administrative purposes."  Article 3 provides that the only fields not covered are air and sea transport and rail traffic.  (1)OJ No L 243, 29.10.1971, p. 29. (2)OJ No L 73, 25.3.1972, p. 119.        2. On 5 October 1973 in Munich the nine Member States of the Community, together with a number of non-member States, signed the Convention on the grant of European patents which, amongst other documents annexed thereto, includes its own implementing regulations.  The aim of the Convention is to improve the protection of patents, in particular by means of a common procedure for granting patents.  Part III of the Convention and more particularly Chapter I thereof governs the filling and requirements of the European patent application (Articles 75 to 86), while Part III of the implementing regulations (taken from the Patent Cooperation Treaty signed in 1970) supplements these provisions in much more detail (Rules 24 to 36). Considering the scope of the Directive on units of measurement as described above, European patent application documents, as well as the patents themselves, are covered by the Directive, which means that Member States are required to use SI units in documents relating to patents. However, Rule 35 (12) of the implementing regulations to the Convention could lead to a different interpretation.  It is worded as follows:  "12. Units of weights and measures shall be expressed in terms of the metric system. If a different system is used they shall also be expressed in terms of the metric system. Temperatures shall be expressed in degrees Celsius. If a different system is used they shall also be expressed in degrees Celsius. Densities shall be expressed in metric units. For the other physical values, the units recognized in international practice shall be used, for mathematical formulae the symbols in general use, and for chemical formulae the symbols, atomic weights and molecular formulae in general use shall be employed. In general, use should be made of technical terms, signs and symbols generally accepted in the field in question."  This text is not clear, and in particular the following points may be mentioned:    (a) The text quoted mentions only the "metric system". As already indicated above, there are numerous "metric systems". If any of them may be used, this rule is outmoded by comparison with the international decisions of the general conference of weights and measures and the Community Directive, which authorize the use of SI units only, and it gives rise to confusion. If, on the other hand, those drafting this text intended authorization of the units of the SI system only the wording is unsatisfactory and the reference to the "metric system" insufficient.       (b) The first sentence of the text requires that the metric system be used, either, on its own or together with any other units used. On the other hand, after mentioning temperatures and densities, the text states further on : "For the other physical values, the units recognized in international practice shall be used ...".  These two passages are not inconsistent if "the units recognized in international practice", and the "metric system" are considered in this text to be two equivalent expressions meaning "SI units". However, the second passage could be regarded as referring to the units in use in certain non-SI countries. Although the somewhat vague wording "units recognized in international practice" might seem to justify this interpretation, the latter would be contrary to the first sentence of the text and inconsistent with the Directive on units of measurement.       (c) The French text states that temperatures shall be expressed "in degrees centigrade", whereas the German and English texts use the expression "Celsius", which is the only term recognized internationally, including in the French-speaking countries. Attention must be drawn to the incorrect nature of the term used in French as well as to the pointless restriction to degrees Celsius (since the use of Kelvins, also permitted under the SI system, is much to be preferred when dealing with low temperatures). Any variation between the texts in different languages should be avoided, since, in pursuance of Article 177 (1) of the Convention, the English, French and German texts are equally authentic.       (d) The sentence "densities shall be expressed in metric units" is also incorrect from the scientific point of view. "Densities" are simple ratios of mass within dimension and consequently need not be expressed out in any system of units.         In short, the wording of this paragraph of the Patent Convention will certainly lead to difficulties in its interpretation and application, since the scientific terms used are unsatisfactory.  Consequently, whatever the importance attributed to this problem when the Patent Convention was drafted, it is essential to securing uniform application of Rule 35 (12) that it should first form the subject of common interpretation and that subsequently its wording be improved.   II  Having regard to the foregoing considerations and pursuant to the provisions of the Treaty establishing the European Economic Community, and in particular Article 155 thereof, the Commission recommends to the Member States:    1. that they issue a joint statement of interpretation declaring that they will apply Rule 35 (12) of the implementing regulations of the Convention on the grant of European patents, signed in Munich on 5 October 1973, in accordance with the results of the work of the general conference of weights and measures which defined the international system and the units of measurement included therein;       2. that they endeavour to secure adoption of this position by the other Contracting Parties to the Convention on the grant of European patents.         Done at Brussels, 5 February 1976.  For the Commission  Finn GUNDELACH  Member of the Commission


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31970H0119

70/119/EEC: Commission Recommendation of 22 December 1969 to the Italian Republic on the adjustment of the State monopoly of a commercial character in matches (Only the Italian text is authentic)

Official Journal L 031 , 06/02/1970 P. 0001 - 0003 Danish special edition: Series II Volume VI P. 0010  English special edition: Series II Volume VI P. 0010

COMMISSION RECOMMENDATION of 22 December 1969 to the Italian Republic on the adjustment of the State monopoly of a commercial character in matches (Only the Italian text is authentic) (70/119/EEC) I    1. The Italian Government, by letter of 24 March 1959, informed the Commission of the European Economic Community that matches are in Italy subject to a State monopoly of a commercial character within the meaning of Article 37 of the EEC Treaty.  Under that provision Member States are required progressively to adjust State monopolies of a commercial character so as to ensure that, when the transitional period has ended, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States.       2. Royal Decree No 560 of 11 March 1923, and the convention annexed to it, abolished the State monopoly in the sale of matches which had been in existence since 1916 and introduced instead a tax on manufacture. At the same time a consortium was set up, known as the Consorzio industrie fiammiferi (CIF), to which all Italian undertakings which produced matches were required to belong ; the State concluded the abovementioned convention with the consortium, granted it the monopoly in the manufacture and sale of matches in Italy and entrusted it with the task of ensuring that the tax on the manufacture of matches was paid to the State.  The right to import is reserved to the State, which may grant import permits to individuals.  The State undertook for the duration of the convention not to authorize the setting up of new factories for the manufacture of matches or substitutes therefor. On the occasion of one of the renewals of the convention, it was decided that that obligation should also apply to the opening of factories whose production would be exclusively for export (Article 12 of the implementing provisions of Legislative Decree No 525 of 17 April 1948 on the renewal of the convention between the State and the CIF).  The convention, due to expire on 31 May 1932, was several times renewed. The latest renewal of it, by Ministerial Decree of 29 April 1965, provides for its expiry on 31 December 1974.  As regards manufacture, the CIF is empowered to allocate the volume of production needed for the domestic market among the different undertakings which are members of the consortium. Matches are then sold by producers to the CIF, which distributes them through the network of the Amministrazione autonoma dei monopoli di Stato (AAMS) (since Royal Decree No 396 of 5 April 1925 matches have in fact been assimilated to other monopoly products).  The selling prices of matches are fixed by a Decree of the Ministry of Finance on a proposal from a committee on which the CIF is represented (Article 6 of the Decree of 11 March 1923). These are maximum prices and the CIF has the right to sell at lower prices (Article 6 of the Convention).       3. For several years the needs of the Italian market have been almost entirely covered by domestic production (in 1965, 1 metric ton was imported from Member States, total imports from all countries amounting to 3 metric tons) ; in 1966 there were no imports (total imports : 1 metric ton) ; in 1967, 4 metric tons were imported (total imports : 4 metric tons), and in 1968, 3 metric tons (total imports : 4 metric tons).  The Commission considered that this situation gave rise to discrimination against suppliers in other Member States in respect of marketing conditions and, on 11 April 1962, recommended the Italian Republic, in pursuance of Article 37 (6):      - to allow the importation and marketing of matches from other Member States, either by permitting suppliers of these products to supply the distribution network of the AAMS or by adopting any other suitable means to that end, within the limit, for the year 1962, of 5 % of the domestic production for 1960, and to increase that amount by at least 15 % each year;           - to fix selling prices to consumers so that, apart from customs duty, the same margin between the delivery price and the selling price is applied to goods imported from other Member States as to domestic goods with the same delivery price:  to permit advertising of matches from other Member States under the same conditions as those permitted in respect of domestic products.             The Italian Government has not taken any measures to comply with that recommendation. By letter of 13 May 1963 the Italian Government expressed its readiness to consider solutions such as those recommended by the Commission on condition, however, that the question of import restrictions in existence in France and Germany were resolved at the same time.  As it has already had occasion to point out to the Italian Government in answer to the letter of 13 May 1963, the Commission, while aware of the importance of the problems raised by the Italian Government, considers that the difficulties which are liable to arise with regard to the establishment of the common market can only be solved in a balanced manner if all Member States apply the provisions of the Treaty. As has been mentioned above. Article 37 requires the Italian Republic to ensure that from 1 January 1970 no discrimination regarding conditions under which goods are procured and marketed exists between nationals of Member States : the same obligation applies to the French Republic to which the Commission is addressing, at the same time as to the Italian Republic, a recommendation concerning the adjustment of its match monopoly. As to the Federal Republic of Germany, it may invoke Article 37 (5), where by the obligations on Member States are binding only in so far as they are consistent with existing international agreement. The Commission is prepared, if the failure to adjust the German monopoly gives rise to difficulties for Italy, to discuss the problem with the Italian authorities on a practical basis. The Commission points out in this connection that under the second subparagraph of Article 37 (3) it may, where a product is subject to a State monopoly of a commercial character in only one or some Member States, authorize the other Member States to apply protective measures until the adjustment provided for in paragraph 1 of that Article has been effected : the conditions and details of such measures would be determined by the Commission.  In the light of the foregoing the obligation to effect the adjustment laid down in Article 37 cannot be made conditional on the solution of the questions referred to by the Italian Government.  Since the end of the transitional period is approaching, measures should now be adopted to bring to an end all discrimination between nationals of Member States regarding the conditions under which goods are procured and marketed.  Article 37, which comes under the Title relating to the free movement of goods and, more particularly, under the Chapter concerning the elimination of quantitative restrictions between Member States, aims at achieving by the end of the transitional period in respect of products subject to a State monopoly of a commercial character (or a like system) the same result as that achieved for other products by the application of Articles 30 to 34, that is to say the free movement of goods.  However, a different procedure was provided in order to achieve that result in the sectors covered by State monopolies. Their progressive adjustment was provided for partly in order to take account of the fact that in the view of the Member States concerned the products subject to a monopoly presented special problems and partly so that the elimination of quantitative restrictions and of measures having an equivalent effect in those sectors should not be without practical result. There were indeed grounds for fearing that the liberalization of trade in respect of the products subject to a monopoly would not take place if the monopolies, by virtue of their exclusive right to import, export and market certain products, were to remain free to decide to what extent and under what conditions products from other Member States could be allowed on the domestic market (or, conversely, to what extent domestic products could be exported to other Member States).  It is for that reason that Article 37 contains the provision designed "to ensure that when the transitional period has ended no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States".  It should be stressed that the ending of discrimination resulting directly from provisions applicable to products subject to a monopoly is not the only requirement laid down in Article 37 ; that objective could be attained, in the absence of an Article governing State monopolies, by means of other provisions of the Treaty, in particular those prohibiting charges having an equivalent effect to customs duties and measures having an equivalent effect to quantitative restrictions. It follows from what has been said above in relation to the special characteristics of State monopolies and of the restrictions to which they can give rise that the objective of the "adjustment", i.e. of ensuring that "no discrimination exists", is to eliminate the possibility that the particular powers vested in the monopolies in respect of the importing and domestic marketing, or the exporting, of certain products might at the end of the transitional period still give rise to discrimination.  Since these are the objectives laid down in Article 37, it is incumbent upon Italy to adjust the monopoly in matches before the end of the transitional period in order that the objectives may be attained. On the other hand, it is for the Commission, in addition to its general duty to see that the Treaty is implemented, to make recommendations in accordance with Article 37 (6), as to the manner in which the adjustment provided for in that Article shall be carried out.       4. As explained in paragraph 3, the restriction of the Italian market to domestic products constitutes discrimination against suppliers from other Member States. It should be stressed in this connection that the introduction on to the Italian market of a given quantity of  matches from other Member States and the gradual in crease of that quantity will not be sufficient to attain the objective of Article 37 so long as the State is able, by refusing import permits, to decide to what extent and in respect of which qualities the needs of the Italian market may be met by suppliers in other Member States and so long as the CIF, being the sole agent authorized to sell matches on the Italian Market, is able to prevent those suppliers from entering that market.  For these reasons it seems to the Commission that the best solution for attaining the objective laid down in Article 37, because there is no doubt it will be effective, is to abolish the State's exclusive right to import as well as the CIF's exclusive right to market matches, in so far as those rights concern trade between Member States.       5. Pursuant to Article 90 (2), undertakings having the character of a revenue-producing monopoly are subject to the rules contained in the Treaty in so far as the application of such rules does not obstruct the performance of the particular tasks assigned to them. Furthermore, the development of trade must not be affected to such an extent as would be contrary to the interests of the Community.  The tax to which matches are subject in Italy is a tax on manufacture ; the CIF cannot therefore be regarded as a revenue-producing monopoly. It is true that the CIF performs a revenue function : as a distributor of revenue stamps and on account of the fact that it makes advance payment of taxes to the State, it simplifies the collection of tax revenue. However, there is no necessary and direct link between the tax and the exclusive right of the CIF to market matches.  Moreover, in view of the small number of match manufacturers, the Commission feels that the performance of the CIF's revenue collecting role would not be jeopardized by the introduction of a straightforward tax on manufacture, such as indeed exists both in Italy and in other countries for products which are, from the point of view of tax revenue, much more important than matches and yet in respect of which no monopoly has been set up.   II  On these grounds the Commission of the European Communities recommends the Italian Republic to take the following measures, in accordance with Article 37 of the EEC Treaty:      1. To allow matches to be imported from Member States without any restriction. To that end, all formalities necessary for the introduction of these products on to the Italian market must be such as can be carried out directly by the buyers or persons appointed by them, so that those concerned may immediately dispose of the products.           2. To allow all operations necessary for the marketing of matches from other Member States to be freely carried out on the Italian market. To that end, in particular:        - to allow suppliers from other Member States to set up their own wholesale trade network in Italy and to hold stocks there:               - to allow prices for products from other Member States to be established on the basis of agreement between buyers and sellers at the different stages of marketing:               - to allow suppliers from other Member States to advertise their products freely;               - to take all measures necessary to ensure that retailers are commercially independent of the public authorities.                  Done at Brussels, 22 December 1969.  For the Commission  The President  Jean REY