               EUROPEAN COMMISSION
            Brussels, 5.6.2019
            COM(2019) 522 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2019 National Reform Programme of Portugal and delivering a Council opinion on the 2019 Stability Programme of Portugal

               Recommendation for a

               COUNCIL RECOMMENDATION

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

               THE COUNCIL OF THE EUROPEAN UNION,

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

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

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

               Having regard to the recommendation of the European Commission,

               Having regard to the resolutions of the European Parliament,

               Having regard to the conclusions of the European Council,

               Having regard to the opinion of the Employment Committee,

               Having regard to the opinion of the Economic and Financial Committee,

               Having regard to the opinion of the Social Protection Committee,

               Having regard to the opinion of the Economic Policy Committee,

               Whereas:

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

               (2)As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Portugal should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) to (4) below. In particular, focusing economic policy related to investment in the specified areas and using windfall gains to reduce public debt will help address the second euro area recommendation as regards supporting investment and rebuilding buffers. Measures to reduce labour market segmentation, improve skills and effectiveness of social safety net will help address the third euro area recommendation as regards functioning of the labour market and social protection systems. Measures to reduce regulatory burden will help address the first euro area recommendation as regards business environment and productivity improvements for euro area rebalancing. Increasing the efficiency of insolvency and recovery proceedings will help address the fourth euro area recommendation as regards the reduction of non-performing loans.

               (3)The 2019 country report for Portugal
                  3
                was published on 27 February 2019. It assessed Portugal’s progress in addressing the country-specific recommendations adopted by the Council on 13 July 2018, the follow-up given to the recommendations adopted in previous years and Portugal's progress towards its national Europe 2020 targets. It also included an in-depth review under Article 5 of Regulation (EU) No 1176/2011, the results of which were also published on 27 February 2019
                  4
               . The Commission’s analysis led it to conclude that Portugal is experiencing 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 low productivity growth. Policy gaps remain, notably in terms of implementing the measures outlined to reduce non-performing loans and to improve the business environment. The adoption and implementation of several reform plans, including fiscal-structural reforms to strengthen the sustainability of public finances, will need to be monitored.

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

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

               (6)Portugal is currently in the preventive arm of the Stability and Growth Pact and subject to the transitional debt rule. In its 2019 Stability Programme, Portugal plans to attain a headline deficit of 0.2% of GDP in 2019, a surplus of 0.3% of GDP in 2020 and a further improvement to a surplus of 0.7% of GDP by 2022. Those plans only partially include the potential deficit-increasing impact of bank support measures from 2020 onwards. Based on the recalculated structural balance, the medium-term budgetary objective – which has been changed from a structural surplus of 0.25% of GDP in 2019 to a balanced budgetary position in structural terms as of 2020 – is planned to be achieved in 2020. The 2019 Stability Programme projects the general government debt-to-GDP ratio to reach 118.6% in 2019 and 115.2% in 2020, which would then be at 103.7% in 2022. The macroeconomic scenario underpinning those budgetary projections is plausible for 2019 and 2020 and favourable for the following years. At the same time, the measures needed to support the planned deficit targets from 2019 onwards have not been sufficiently specified.

               (7)The 2019 Stability Programme does not provide information on the budgetary impact of the exceptional expenditure in relation to preventive measures to protect the national territory against wildfires, following the large-scale wildfires that occurred in 2017. However, in a letter dated 9 May 2019, the Portuguese authorities have provided adequate evidence of the scope and nature of these additional budgetary costs. In particular, the letter indicates that the 2018 budget implementation comprises exceptional expenditure amounting to about 0.04% of GDP in relation to preventive measures to protect the national territory against wildfires. The letter of 9 May 2019 sets out expenditure related to the emergency management, classified as one-off measures, and expenditure related to prevention. Due to the integrated nature of these expenditures and due to the direct link with the large-scale wildfires of 2017, the specific treatment of wildfire-prevention expenditure could be considered in application of the ‘unusual event clause’. According to the Commission, the eligible additional expenditure in 2018 amounts to 0.04% of GDP for preventive measures. The provisions set out in Articles 5(1) and 6(3) of Regulation (EC) No 1466/97 cater for this additional expenditure, in that the unprecedented large-scale wildfires are considered unusual events, their impact on Portugal's public finances is significant and sustainability would not be compromised by allowing for a temporary deviation from the adjustment path towards the medium-term budgetary objective. Therefore, the required adjustment towards the medium-term budgetary objective for 2018 has been reduced to take into account these additional costs.

               (8)On 13 July 2018, the Council recommended Portugal to ensure that the nominal growth rate of net primary government expenditure
                  7
                does not exceed 0.7% in 2019, corresponding to an annual structural adjustment of 0.6% of GDP. Based on the Commission 2019 spring forecast, there is a risk of a significant deviation from that recommended adjustment in 2019.

               (9)In 2020, Portugal should achieve its medium-term budgetary objective, taking into account the allowance linked to unusual events for which a temporary deviation is granted. Based on the Commission 2019 spring forecast, this is consistent with a maximum nominal growth rate of net primary government expenditure of 1.5%, corresponding to an annual structural adjustment of 0.5% of GDP. Based on the Commission 2019 spring forecast under unchanged policies, there is a risk of a significant deviation from that requirement in 2020. At the same time, Portugal is forecast to comply with the transitional debt rule in 2019, as a result of the allowed annual deviation of 0.25%, but is prima facie not projected to comply with the debt rule in 2020. Overall, the Council is of the opinion that the necessary measures should be taken as of 2019 to comply with the provisions of the Stability and Growth Pact. The use of any windfall gains to further reduce the general government debt ratio would be important.

               (10)Strengthening Portugal’s fiscal sustainability hinges on continued growth-friendly fiscal consolidation, there is, however, scope to improve the quality of public finances and to make expenditure more growth-friendly by supporting investment (see below). Despite having increased in 2018, public investment has remained very low compared with EU standards and consistently below the government’s own targets. Enforcing the commitment control law, implementing the budget framework law in a strict and timely manner and continuing rationalisation efforts remain crucial to improving expenditure control and making spending more efficient. Recent stand-alone bottom-up expenditure reviews in specific sectors have led to overall limited efficiency savings. To achieve higher efficiency gains, expenditure reviews should instead become a regular feature of Portugal’s budget framework. Moreover, deeper reforms to increase efficiency and a clear top-down focus on containing overall expenditure, are still needed. This should largely build on a strategy for public administration reform aimed at better aligning public employment levels with the need to deliver effective services, which includes supporting staff reallocation and retraining, and promoting individual performance and the attractiveness of the public service for highly skilled staff.

               (11)Portugal’s public finances are under continuous pressure from adverse demographic trends, notably the ageing population, with negative consequences, especially for the sustainability of the pension and health systems. While the past reforms improved the long-term sustainability of the pension system, ongoing special pension increases and early retirement reforms have entailed further discretionary increases in pension spending on top of the underlying upward trend driven by ageing. The overall sustainability of the pension system may be at risk if there are no adequate compensatory measures. In the health sector, cost-effectiveness continued to be promoted in 2018, including through an increased reliance on centralised purchasing and a greater use of generics and biosimilars. At the same time, persistently high hospital arrears result from inadequate budgetary planning and implementation and weaknesses in accounting control and managerial practices. Temporary decreases in hospital arrears in 2018 have essentially resulted from sizeable extraordinary clearance measures. A new programme for 2019 aims to structurally address hospital arrears by introducing a new governance model for public hospitals, in combination with a substantial increase in their annual budgets. This programme’s ability to slow down the accumulation of hospital arrears in the short term and thereby lead to a structural reduction of their overall stock crucially hinges on its timely and effective implementation.

               (12)Increasing the net incomes of state-owned enterprises and reducing their debt would help to make Portuguese public finances more sustainable. The authorities are planning the net incomes of state-owned enterprises as a whole to approach a level close to balance in 2019, which means a delay compared with earlier announcements aiming at a similar outcome already in 2018. Moreover, measures to ensure adherence to initial activity plans and efforts to ensure more timely, transparent and comprehensive monitoring were delayed and have been slow in translating into corrective action where needed. In particular, a sufficient level of ex-ante transparency regarding the financing of state-owned enterprises through recapitalisations and loans has not been ensured.

               (13)Despite the ongoing implementation of some measures to decrease labour market segmentation, such as the reinforcement of the labour inspectorate and the launch of an integration programme for precarious workers in the public service, the proportion of temporary workers in Portugal still exceeds the EU average. More specific measures agreed between the government, employers and employees representatives aimed at further reducing labour market segmentation and precariousness and promoting collective bargaining are still to be approved by Parliament and materialise into concrete legislation.

               (14)Improved labour market conditions have resulted in fewer people at risk of poverty or social exclusion. Despite this improvement, income inequality remains high and the impact of social transfers on poverty reduction is limited. While income inequality in Portugal is decreasing, it still remains significantly higher than the EU average. The adequacy of the minimum income scheme is among the lowest in the EU providing incomes of only 40% of the national poverty threshold. Unless reviewed, the low effectiveness of social transfers could be severely tested in case of a future economic slowdown with the vulnerable people particularly affected.

               (15)The low qualification level of workers is an obstacle to investment and productivity growth. About 50% of the population aged 25-64 has low educational attainment levels, well above the Union average of 22% in 2018. The low availability of skilled staff is an important obstacle to investment that companies report. For adult learning in particular, there is scope to further engage the low qualified (whose participation in learning is below the Union average) and to extend targeted public incentives to small and medium-sized enterprises to train their staff. Digital skills are a particular challenge, with 50% of the Portuguese population lacking basic digital skills compared to a Union average of 43%. Investment in education and training, including infrastructure, is key to improving employability and social mobility.

               (16)Measures to increase enrolment in higher education, such as a significant increase in scholarships, are ongoing as part of efforts to increase the number of higher education graduates. Among 30-34 year olds in Portugal, 33.5% have completed higher education, which is still below the EU average of 40.7%. The persistency of these low shares, in particular for graduates in information and communication technologies, the natural sciences, mathematics and statistics may have negative consequences for Portugal’s productivity growth and capacity to innovate. While the government is trying to address the issue by increasing the number of study places in these fields and implementing a review of the higher education system, more efforts are needed.

               (17)The ratio of non-performing loans in the financial system remains relatively high at 11.3%. Nevertheless, most banks made substantial progress in meeting the targets to reduce non-performing loans. The secondary market for distressed assets gained momentum while banks also accelerated write-offs and non-performing credits cures. The breakdown of non-performing loans continues to show a steady high proportion (65%) of corporate non-performing loans. Over the past few years, the authorities have implemented a number of legal and institutional reforms for insolvency and debt enforcement. However, the average length of insolvency proceedings remains persistently high as does the number of pending court cases. The legal and judicial frameworks are heavily affecting the recovery process and the prospects for efficient repossession of collateral. The long average duration of recovery proceedings weighs on the prices applied by the market to non-performing assets.

               (18)Reforms aimed at administrative simplification have been largely absent, as efforts in this area are mostly limited to across-the-board implementation of dematerialisation of procedures and the once-only principle. Priority should be given in particular to limiting the number of documents that have to be submitted and either replacing authorisation schemes with simple declarations of compliance with applicable conditions or, for the more sensitive sectors, simplifying authorisations by reducing decision times and adopting tacit approval. The streamlining of procedures for specific sectors is still lacking. Excessive administrative charges remain in place, notably in the construction sector. Additionally, shortcomings in planning and monitoring public procurement hinder competition. The performance of public procurement could be improved by introducing structured and quantified planning and ensuring closer supervision of the execution phase of contracts. Despite a significant reduction in direct awards between 2017 and 2018, their use remains high.

               (19)In the context of the financial assistance programme, Portugal has made an effort to reduce the regulatory burden for highly regulated professions, notably with the introduction of the 2013 framework law. In some cases, however, this progress was halted or even reversed with the adoption of bylaws for the individual professions and the introduction of a ban on corporate groups. Regulatory and administrative restrictions on business and professional services prevail, raising concerns about competition, price levels, innovation and the quality of services. So far, no reform plans have been announced in response to the Commission’s recommendations on regulation of professional services
                  8
               , or in response to the 2018 OECD Competition Assessment Review on Portugal’s self-regulated professions (in cooperation with the Portuguese Competition Authority).

               (20)The conditions for firms to access finance have been improving over the last few years and the proportion of firms reporting access to finance as main constraint to investment is now in line with the EU average. The Portuguese authorities launched and strengthened several initiatives in this area, such as the Capitalizar programme and other programmes targeting specific types of companies or sectors. However, Portuguese firms still heavily rely on their own resources to finance investment, and a significant amount of bank loans ends up in firms with very low productivity. The low level of capital invested per worker represents a major obstacle to upgrade the productive structure of the Portuguese economy. In this context, it is important that productive investment increases while being gradually rechannelled towards firms with growth potential and in sectors with high productivity profiles. Although other sources of financing, such as venture and equity capital, have been increasing over the last few years, they remain markedly lower than the EU average.

               (21)The justice system is becoming more efficient but continues to face critical challenges with lengthy proceedings and a high backlog of cases, in particular in the administrative and tax courts. While efforts to crack down on corruption continue, preventing corruption remains an issue due to the lack of a coordinated strategy and fragmented responsibilities.

               (22)Investment in research and development has recently picked up again but remains insufficient to upgrade the Portuguese national research and innovation system. After years of decline, the share of spending on research and development in relation to GDP increased recently and in 2017, business research and development intensity slightly surpassed the public research and development intensity. Little progress has been made to upgrade Portugal’s economic structure to higher shares of value-added in high-tech manufacturing and in knowledge-intensive services. Promoting investment in intangible assets, including research and development but also managerial skills, financial literacy and digital skills to enable firms to grow, increase their innovation capacity and enter export markets offers Portugal significant potential to boost investment and productivity growth.

               (23)Insufficient maritime and railway connections make it difficult for export-oriented businesses to fully benefit from the potential of the single market. Due to its geographical location, Portugal is a natural maritime entry point, especially for the transatlantic routes. Timely investments in the new container terminals in Sines and in Barreiro (Terminal Vasco da Gama) and finalisation of the ongoing investment projects in the other main Portuguese ports (Viana do Castelo, Leixoes, Aveiro, Figueira da Foz, Setubal) would increase the container handling capacity of these ports. Railways are still widely underused in the connections to Spain (both East-West and North-South corridors). Developing a comprehensive Iberian plan, which includes identifying the intermediate steps, terminals, interconnections needed to benefit from the Spanish network upgrade and developing the International Union of Railways gauge, would help boost Portugal’s international rail performance.

               (24)Investments in resource efficiency and climate adaptation would help to achieve long-term sustainable growth. Anticipating the adverse effects of climate change, such as floods and forest fires, remains a challenge in Portugal. Challenges remain to achieve the 2020 energy efficiency target, and the latest data for 2017 show that energy consumption is increasing. There is still a wide margin to improve energy efficiency in buildings and reduce energy consumption in business. Better energy connectivity of the Iberian Peninsula could enable more competition and facilitate the deployment of renewable energy.

               (25)The programming of EU funds for the period 2021-2027 could help address some of the gaps identified in the recommendations, in particular in the areas covered by Annex D to the country report
                  9
               . This would allow Portugal to make the best use of those funds in respect of the identified sectors, taking into account regional disparities and the special situation of the outermost regions. Strengthening the country’s administrative capacity for the management of these funds is an important factor for the success of this investment.

               (26)In the context of the 2019 European Semester, the Commission has carried out a comprehensive analysis of Portugal’s economic policy and published it in the 2019 country report. It has also assessed the 2019 Stability Programme and the 2019 National Reform Programme and the follow-up given to the recommendations addressed to 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 Union rules and guidance, given the need to strengthen the Union’s overall economic governance by providing Union-level input into future national decisions.

               (27)In the light of this assessment, the Council has examined the 2019 Stability Programme and its opinion
                  10
                is reflected in particular in recommendation (1) below.

               (28)In the light of the Commission’s in-depth review and this assessment, the Council has examined the 2019 National Reform Programme and the 2019 Stability Programme. Its recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) to (4) below. Those recommendations also contribute to the implementation of the Recommendation for the euro area, in particular the first, second and fourth euro area recommendations. Fiscal policies referred to in recommendation (1) contribute inter-alia to address imbalances linked to high government debt.

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

               1.Achieve the medium-term budgetary objective in 2020, taking into account the allowance linked to unusual events for which a temporary deviation is granted. Use windfall gains to accelerate the reduction of the general government debt ratio. Improve the quality of public finances by prioritising growth-enhancing spending while strengthening overall expenditure control, cost efficiency and adequate budgeting, with a focus in particular on a durable reduction of arrears in hospitals. Improve the financial sustainability of state-owned enterprises, while ensuring more timely, transparent and comprehensive monitoring.

               2.Adopt measures to address labour market segmentation. Improve the skills level of the population, in particular their digital literacy, including by making adult learning more relevant to the needs of the labour market. Increase the number of higher education graduates, particularly in science and information technology. Improve the effectiveness and adequacy of the social safety net.

               3.Focus investment-related economic policy on research and innovation, railway transport and port infrastructure, low carbon and energy transition and extending energy interconnections, taking into account regional disparities.

               4.Allow for a swifter recovery of the collateral tied to non-performing loans by increasing the efficiency of insolvency and recovery proceedings. Reduce the administrative and regulatory burden on businesses, mainly by reducing sector-specific barriers to licensing. Develop a roadmap to reduce restrictions in highly regulated professions. Increase the efficiency of administrative and tax courts, in particular by decreasing the length of proceedings.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 209, 2.8.1997, p. 1.

                     (2)

                        OJ L 306, 23.11.2011, p. 25.

                     (3)

                        SWD(2019) 1021 final.

                     (4)

                        COM(2019) 150 final.

                     (5)

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

                     (6)

                        COM(2014) 494 final.

                     (7)

                        Net primary government expenditure comprises total government expenditure excluding interest expenditure, expenditure on Union programmes fully matched by Union funds revenue and non-discretionary changes in unemployment benefit expenditure. Nationally financed gross fixed capital formation is smoothed over a 4-year period. Discretionary revenue measures or revenue increases mandated by law are factored in. One-off measures on both the revenue and expenditure sides are netted out.

                     (8)

                        SWD(2016) 436 final.

                     (9)

                        SWD(2019) 1021 final.

                     (10)

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


               EUROPEAN COMMISSION
            Brussels, 29.11.2019
            COM(2019) 622 final
            Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations on amending the Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus and the Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE RECOMMENDATION

                  The Interbus Agreement on the international occasional carriage of passengers by coach and bus (
                     1
                  ) (hereafter “the Interbus Agreement”) entered into force on 1 January 2003. The European Union is a Contracting Party of the Interbus Agreement (
                     2
                  ).

                  The Interbus Agreement currently covers the international occasional carriage of passengers by coach and bus.

                  On 5 December 2014 (
                     3
                  ), the Council authorised the Commission to open negotiations, on behalf of the European Union, to extend the scope of the Interbus Agreement to regular and special regular carriage of passengers by coach and bus. Under the same authorisation from the Council, the Commission negotiated a Protocol extending the possibility of accession to the Interbus Agreement to the Kingdom of Morocco.

                  On the basis of a Commission proposal, the Council adopted on 16 July 2018 (
                     4
                  ) Decisions on the signing of both Protocols.

                  Article 20(1) of the Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus (hereinafter ‘the Protocol on regular and special regular services’) and Article 2 of the Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco (hereinafter ‘the Protocol on the Kingdom of Morocco’) establish respectively that: ‘This Protocol shall be open for signature at Brussels from 16/07/2018 to 16/04/2019 at the General Secretariat of the Council of the European Union which shall act as the Depositary of the Protocol.’

                  Before the end of the period for signature, i.e. 16 April 2019, only one Contracting Party to the Interbus Agreement had signed the Protocol on regular and special regular services and four Contracting Parties to the Interbus Agreement had signed the Protocol on the Kingdom of Morocco.

                  The Protocol on regular and special regular services provides with regard to its entry into force that the respective provisions of the Interbus Agreement, in particular Articles 27 and 28 thereof, shall apply mutatis mutandis. According to these provisions, the Agreement shall be approved or ratified by the signatories in accordance with their own procedures and shall enter into force for the Contracting Parties that have approved of ratified it when four Contracting Parties, including the EU have approved or ratified it. The reference to signatories implies that in order for the Protocol on regular and special regular services to be able to enter into force, there would need to be at least four Contracting Parties that have signed and, consequently, approved or ratified it. As mentioned above, before the elapse of the period during which the Protocol on regular and special regular services was open for signature, only the Union had signed it.

                  The Protocol on the Kingdom of Morocco, for its part, envisages that it shall be signed, approved or ratified by the signatories in accordance with their own procedures. However, it does not provide for accession of Contracting Parties that have not signed and approved or ratified it. As mentioned above, before the elapse of the period during which the Protocol on the Kingdom of Morocco was open for signature not all of the Contracting Parties to the Interbus Agreement had signed it.

                  In light of the above, unless the periods of signature of the Protocols are prolonged or removed, no other Interbus Contracting Party could sign them and, consequently approve or ratify them and become also a Contracting Party of the Protocols. This would have serious consequences: the Protocol on regular and special regular services could not enter into force since it requires four ratifications while, the Protocol on the Kingdom of Morocco, signed and approved or ratified by four Contracting Parties to the Interbus Agreement, could enter into force but would only cover four out of eight current Contracting Parties which would make the governance of the whole Interbus Agreement unreasonably complex and practically hinder the possibility of the Kingdom of Morocco to enter in treaty relationship with all the Contacting Parties to the Interbus Agreement.

                  Furthermore, should the Kingdom of Morocco accede to the Interbus Agreement before all current Contracting Parties to the Interbus Agreement have ratified the Protocol on the Kingdom of Morocco, this would in practice be creating a new, smaller Interbus Agreement within the main Agreement (one with the Kingdom of Morocco and the Contracting Parties for which the Protocol would have entered into force, and another one with the current eight existing Contracting Parties without the Kingdom of Morocco). Such an arrangement is not foreseen in the Interbus Agreement and it would make the governance of the Interbus Agreement practically impossible. It would, therefore be appropriate to amend Article 4 of the Protocol on the Kingdom of Morocco to the effect that that Protocol should enter into force only after all Contracting Parties have approved or ratified it.

                  Since in the meantime one of the Contracting Parties to the Interbus Agreement has changed its official denomination, namely the Republic of North Macedonia, it might be opportune to also amend the two Protocols to refer to that Contracting Party with its new denomination.

                  The modification of the Protocols should not affect the validity of the signatures that have already taken place.

               2. RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

                  The Commission has not carried out an impact assessment, nor used external expertise regarding the amendments suggested in this Recommendation since they do not concern the substance of the two Protocols.

               3. LEGAL ELEMENTS OF THE RECOMMENDATION

               •Legal basis

                  The legal basis is the Treaty on the Functioning of the European Union (TFEU), and in particular Article 218(3) and (4) TFEU.

               •Subsidiarity (for non-exclusive competence) and Proportionality

                  Subsidiarity or proportionality are not concerned because first, the matter is of the exclusive external Union competence.

               •Consistency with existing policy provisions in the policy area

                  The proposed Recommendation is consistent with the Union's common transport and other external policies.

               4. BUDGETARY IMPLICATION

                  None.

               Recommendation for a

               COUNCIL DECISION

               authorising the opening of negotiations on amending the Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus and the Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco

               THE COUNCIL OF THE EUROPEAN UNION,

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

               Having regard to the recommendation from the European Commission
                  5
               ,

               Whereas:

               (1)The conclusion of the Interbus Agreement on the international occasional carriage of passengers by coach and bus ('the Interbus Agreement') was approved on behalf of  the Union by Council Decision of 3 October 2002
                  6
               . The Interbus Agreement entered into force on 1 January 2003.

               (2)The Council adopted Decision (EU) 2018/1195
                  7
                and Decision (EU) 2018/1211
                  8
                on 16 July 2018 on the signing, on behalf of the European Union, of a Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus (hereinafter ‘the Protocol on regular and special regular services’) and of a Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco (hereinafter ‘the Protocol on the Kingdom of Morocco’).

               (3)The Union signed the Protocol on regular and special regular services on 24 September 2018 and the Protocol on the Kingdom of Morocco on 11 April 2019.

               (4)In addition to the Union, Bosnia and Herzegovina, Montenegro and Turkey have signed the Protocol on the Kingdom of Morocco. As regards the Protocol regarding the international regular and special regular carriage of passengers by coach and bus, only the Union has signed it.

               (5)The period during which the two Protocols were opened for signature expired on 16 April 2019. In order to allow the current Contracting Parties to the Interbus Agreement that have not done so yet, to sign and conclude the two Protocols, it is appropriate that the Protocols are amended so that they do not provide for a specific period during which they are open for signature.

               (6)It would be appropriate to amend the Protocol on the Kingdom of Morocco to the effect that it enters into force after all current Contracting Parties of the Interbus Agreement have signed and ratified it.

               (7)One of the Contracting Parties to the Interbus Agreement has modified its official denomination, namely the Republic of North Macedonia, and it would be appropriate that this is taken into consideration in the texts of the Protocols.

               (8) The signatures of the Protocols that have taken place before 16 April 2019 should remain valid.

               (9) The Commission should, therefore, be authorised to negotiate, on behalf of the European Union, amendments to the Protocol on regular and special regular services and the Protocol on the Kingdom of Morocco,

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to negotiate, on behalf of the European Union, amendments to the Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus and to the Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco to the effect that there is no limitation on the period during which the Protocols are open for signature, that the change in the denomination of one of the Contracting Parties to the Interbus Agreement is taken into account and that there is a new modality for the entry into force of the Protocol on the Kingdom of Morocco.

               Article 2

               The negotiating directives are set out in the Annex.

               Article 3

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

               Article 4

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 321, 26.11.2002, p. 13.

                     (2)

                        In addition to the European Union, the following countries are also Contracting Parties of the Interbus Agreement: Republic of Albania, Bosnia and Herzegovina, Republic of Moldova, Montenegro, Republic of North Macedonia, Republic of Turkey and Ukraine, (hereafter referred to as “Interbus Contracting Parties”).

                     (3)

                        SGS14/15073 of 5 December 2014.

                     (4)

                        Council Decision (EU) 2018/1195 of 16 July 2018 on the signing, on behalf of the European Union, of a Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus (OJ L 214, 23.8.2018, p. 3).Council Decision (EU) 2018/1211 of 16 July 2018 on the signing, on behalf of the European Union, of a Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco (OJ L 222, 3.9.2018, p. 1).

                     (5)

                        [ADD REFERENCE]

                     (6)

                        Council Decision of 3 October 2002 on the conclusion of the Interbus Agreement on the international occasional carriage of passengers by coach and bus (OJ L 321, 26.11.2002, p. 11).

                     (7)

                        OJ L 214, 23.8.2018, p. 3.

                     (8)

                        OJ L 222, 3.9.2018, p. 1.

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 29.11.2019
            COM(2019) 622 final
            ANNEX
            to the
            Recommendation for a Council Decision
            authorising the opening of negotiations on amending the Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus and the Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco

               ANNEX

               Directives for negotiation on amending the Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus and the Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession to the Kingdom of Morocco.

               1.The deadline for the signature of Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) regarding the international regular and special regular carriage of passengers by coach and bus and of the Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession of the Kingdom of Morocco currently established in Articles 20(1) and 2 respectively as 16 April 2019, should be eliminated.

               2.The references to ‘the former Yugoslav Republic of Macedonia’ in both Protocols should be replaced by ‘the Republic of North Macedonia’.

               3.The Protocol amending the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) by extending the possibility of accession of the Kingdom of Morocco should only enter into force after all current Contracting Parties to the Interbus Agreement have concluded that Protocol.

               4.The negotiator should find the most appropriate form of international instrument through which the amendments should be agreed. The signatures that have already taken place should not be affected.


               EUROPEAN COMMISSION
            Brussels, 9.9.2019
            COM(2019) 407 final
            Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations on behalf of the European Union for the conclusion of an Agreement between the European Union and the Republic of the Seychelles on access for fishing vessels flying the flag of the Seychelles to the waters of Mayotte

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE RECOMMENDATION

               •Reasons for and objectives of the recommendation

               The Commission proposes to negotiate a new agreement between the European Union and the Republic of Seychelles on access for fishing vessels flying the flag of the Seychelles to waters and marine biological resources of Mayotte, under the jurisdiction of the European Union. The Commission intends to carry out the negotiations for the new access’s agreement in parallel with the negotiations of a new Sustainable Fisheries Partnership Agreement and a new protocol with the Republic of Seychelles.

               •Consistency with existing policy provisions in the policy area

               On 11 July 2012, the European Council adopted Decision 2012/419/EU
                  1
                amending, with effect from 1 January 2014, the status of Mayotte with regard to the European Union. From that date, Mayotte ceased to be an overseas country or territory, and became an outermost region of the Union within the meaning of Article 349 of the Treaty on the Functioning of the European Union (TFEU). As a consequence, the exclusive economic zone (EEZ) of Mayotte became EU waters.

               As a result, in 2014 the European Union and Seychelles signed an agreement that ensured the operations of Seychelles flagged vessels in the EEZ of Mayotte, under the jurisdiction of the France.

               The current agreement allows 8 Seychelles vessels to fish in the waters of Mayotte, and will expire on 6 June 2020. The payment of the licences and catches by ship-owners of Seychelles’ fleet is the only financial compensation under this agreement, and it is collected by France for the account of its outermost region Mayotte. These revenues are used by France for setting up of the appropriate legislative framework, control activities, physical infrastructure and for the provision of appropriate capacity building in order for the administration of Mayotte to meet the requirements of the Common Fisheries Policy (CFP). The agreement contributes to responsible fishing in EU waters, as to guarantee the conservation and sustainable exploitation of fisheries resources.

                  This agreement has no financial implications for the EU.

               •Consistency with other Union policies

                  The negotiation of a new Agreement with Seychelles to access the waters of Mayotte under EU jurisdiction is in line with the EU’s external action towards African, Caribbean and Pacific (ACP) countries, and in particular with the Union objectives regarding the respect of democratic principles and human rights.

               2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

               •Legal basis

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

               •Subsidiarity (for non-exclusive competence)

                  Not applicable, exclusive competence.

               •Proportionality

                  The decision is proportional to the objective.

               •Choice of the instrument

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

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

               •Ex-post evaluations/fitness checks of existing legislation

                  The agreement to access the waters of Mayotte by Seychelles’ vessels has no financial implications for the EU. Nevertheless, the Commission’s ex-post and ex-ante evaluation of the Fisheries Partnership Agreement with Seychelles and of its implementing protocol
                     2
                  , also reviewed how the access’s agreement has been operating.

                  This evaluation, carried out in 2019, concluded that the agreement to access the waters of Mayotte should be renewed together with a new implementing Protocol to the Fisheries Partnership Agreement with Seychelles, as to continue aligning the technical and financial conditions of the two texts.

               •Stakeholder consultations

                  Member States, industry representatives, international civil society organisations, as well as Seychelles fisheries administration and civil society, were consulted as part of the ex-post and ex-ante evaluation of the Fisheries Partnership Agreement with Seychelles and of its implementing Protocol. Consultations have also taken place in the framework of the Long Distance Advisory Council, notably at the occasion of its meeting on 27 March 2019.

               •Collection and use of expertise

                  Not applicable.

               •Impact assessment

                  Not applicable.

               •Regulatory fitness and simplification

                  Not applicable.

               •Fundamental rights

                  The negotiating directives, proposed as an annex to the decision, recommend authorising the opening of negotiations including a clause on the consequences of violations of human rights and democratic principles.

               4.BUDGETARY IMPLICATIONS

                  The agreement to access the waters of Mayotte by Seychelles’ vessels has no financial implications for the EU.

               5.OTHER ELEMENTS

               •Implementation plans and monitoring, evaluation and reporting arrangements

                  Negotiations are expected to open in the third quarter of 2019.

               •Detailed explanation of the specific provisions of the recommendation

                  The Commission recommends that:

                  - The Council should authorise the Commission to open and conduct negotiations for the conclusion of a new agreement with Seychelles to access the waters of Mayotte under EU jurisdiction by Seychelles’ vessels;

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

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

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

               Recommendation for a

               COUNCIL DECISION

               authorising the opening of negotiations on behalf of the European Union for the conclusion of an Agreement between the European Union and the Republic of the Seychelles on access for fishing vessels flying the flag of the Seychelles to the waters of Mayotte

               THE COUNCIL OF THE EUROPEAN UNION,

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

               Recalling the European Council Decision of 11 July 2012 amending the status of Mayotte with regard to the European Union
                  3
                ,

               Having regard to the recommendation from the European Commission,

               Whereas negotiations should be opened with a view to concluding an agreement between the European Union and the Republic of the Seychelles relating to the access of Seychelles flagged vessels to waters of the European Union, namely the exclusive economic zone (EEZ) off the coast of Mayotte,

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to negotiate with the Republic of Seychelles an agreement relating to the access for fishing vessels flying the flag of the Republic of Seychelles to waters and marine biological resources of the Union, namely to waters and marine biological resources in the EEZ off the coast of Mayotte.

               Article 2

               The negotiating directives are set out in the Annex.

               Article 3

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

               Article 4

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 204, 31.7.2012, p. 131.

                     (2)

                  https://publications.europa.eu/en/publication-detail/-/publication/5e1b1689-7785-11e9-9f05-01aa75ed71a1/language-en/format-PDF/source-97941423

                     (3)

                        OJ L 204, 31.7.2012, p. 131.

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               EUROPEAN COMMISSION
            Brussels, 9.9.2019
            COM(2019) 407 final
            ANNEX
            to the Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations on behalf of the European Union for the conclusion of an Agreement between the European Union and the Republic of the Seychelles on access for fishing vessels flying the flag of the Seychelles to the waters of Mayotte

               ANNEX

               Negotiation directives

               –The objective of the negotiations is the conclusion of an agreement between the European Union and the Republic of the Seychelles relating to the access for vessels flying the flag of the Republic of Seychelles to waters and marine biological resources of the European Union, namely to waters and marine biological resources of the exclusive economic zone (EEZ) off the coast of Mayotte.

               –The agreement for the access to the waters of Mayotte, under EU jurisdiction, by Seychelles’ vessels should therefore define the general framework, the general principles and the objectives that will form the basis for the access. It should contain a clause repealing the current access’s agreement between the European Union and the Republic of Seychelles
                  1
               .

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

               ·Ensuring access for vessels flying the flag of Seychelles to waters and marine biological resources of the European Union, namely to waters and marine biological resources of the EEZ off the coast of Mayotte, and the necessary fishing authorisations for vessels flying the flag of the Seychelles to carry out fishing activities in that EEZ;

               ·Taking into account the best available scientific advice and relevant management plans adopted by Regional Fisheries Management Organisations (RFMO), in order to ensure the environmental sustainability of fishing activities and to promote ocean governance at the international scale. The fishing activities should be directed exclusively at available resources, taking into account the local fleet's fishing capacity, while paying special attention to the highly migratory nature of the stocks concerned;

               ·Ensuring access for vessels flying the flag of Seychelles to marine biological resources based on criteria similar to those which apply to the EU fleet in the Indian Ocean Tuna Commission (IOTC) competence area, and on the evolutions observed during the past few years;

               ·Including in the agreement licence fees, to be paid only by the vessel owners. No financial contribution from the Government of the Seychelles should be foreseen;

               ·Ensuring that the Protocol will contribute to the promotion of sustainable growth and decent work linked to fishing activities, taking into account relevant conventions of the International Labour Organisation (ILO);

               ·Including a clause on the consequences of violations of human rights and democratic principles.

               –The Agreement in particular should define:

               ·The fishing area covered by the Agreement, the limits of which should be stated in an annex to the Agreement;

               ·the fishing opportunities, by category, to be granted for to fishing vessels flying the flag of Seychelles; and

               ·the fees required to be paid by fishing vessels flying the flag of the Seychelles in order to be authorised to have access the waters and marine biological resources of the Union in the EEZ off the coast of Mayotte and the conditions for such payments.

               –

                     (1)

                        OJ L167 of 6.6.2014, p. 4.


title: Recommendation for a Council Decision authorising the Commission to negotiate, on behalf of the Union, amendments to the Vienna Convention for the Protection of the Ozone Layer and the Montreal Protocol on Substances that Deplete the Ozone Layer

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