Important legal notice

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52005SC0148

Recommendation for a Council opinion in accordance with the third paragraph of Art. 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Finland, 2004-2008  /* SEC/2005/0148 final */

	Brussels, 2.2.2005SEC(2005)148 finalRecommendation for aCOUNCIL OPINIONin accordance with the third paragraph of Art. 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Finland, 2004-2008(presented by the Commission)EXPLANATORY MEMORANDUMCouncil Regulation (EC) No. 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[1] stipulates that participating Member States, that is, those which have adopted the single currency, had to submit stability programmes to the Council and the Commission by 1 March 1999. In accordance with Article 5 of this Regulation, the Council had to examine each stability programme based on assessments prepared by the Commission and the Committee set up by Article 114 of the Treaty (the Economic and Financial Committee). On the basis of a recommendation from the Commission and after having consulted the Economic and Financial Committee, the Council delivered an opinion, following its examination of the programme. According to the Regulation, Member States need to submit annual updates of their stability programmes, which may also be examined by the Council in accordance with these same procedures.The first stability programme of Finland, covering the period 1998-2002, was submitted on 7 September 1998 and assessed by the Council on 12 October 1998. Updates were presented every following year. Finland submitted the most recent update of its stability programme on 2 December 2004. The Commission services have carried out a technical evaluation of this update, taking into account the results of the Commission services Autumn 2004 economic forecasts, and having regard to the code of conduct[2], the commonly agreed methodology for the estimation of potential output and cyclically-adjusted balances, the recommendations in the broad economic policy guidelines for the period 2003-2005 and the principles laid down in the Communication from the Commission to the Council and the European Parliament of 27 November 2002 on strengthening the coordination of budgetary policies[3]. This evaluation warrants the following assessment:-  On 2 December 2004 the government of Finland approved the updated stability programme and, as with previous updates, submitted it to parliament for information. The update of the stability programme covers the period from 2004 to 2008. The programme broadly complies with the code of conduct, as some of the basic assumptions variables are missing.-  The macroeconomic scenario presented in the programme sees the economy growing above 3% in 2004 on the back of robust domestic demand, easing somewhat to a growth rate of 2.8% in 2005. Projected average growth of about 2.5% throughout the programme period seems to be on the cautious side. The short-term forecast is somewhat below the Commission services Autumn 2004 forecast; and also the medium-term projection based on potential output presented in the programme is below the growth potential as estimated by the Commission services.-  The government’s key budgetary policy objective is to keep central and local government finances close to balance. With social security funds regularly in surplus, the general government balance is to show an annual surplus close to 2% of GDP. According to this policy, balance in central government finances, in national account terms, should be restored at the end of the electoral period in 2007. To help to achieve this target the government in May 2003 approved annual spending limits for the period 2004-2007. Based on these limits, total expenditure of the central government is allowed to increase by nearly 1 per cent a year in real terms on average over that period. As most of the expenditure increase has been frontloaded to 2004, there is less room for manoeuvre within the ceilings in the latter part of the electoral period. Compared with the previous update, the projections for the general government surplus from 2004 to 2007 are virtually unchanged.-  Although Finland is set to maintain a favourable public sector surplus, the budgetary outcome could be worse than projected as the baseline budgetary trend presented in the update only partially includes the tax cuts of € 1.7 billion i.e. 1.2% of GDP that supplement the two-and-half-year comprehensive wage agreement concluded at the end of November 2004. As there are no announced plans to decrease spending in 2005-2007, the central government deficit would be higher between 2005 and 2007 than cited in the programme, unless revenue-raising measures are introduced, thereby also lowering the surplus in general government finances. The government estimates that the wage-agreement-cum-tax-cuts will lower the general government surplus by 0.3 percentage points to about 1.9% of GDP in 2007. However, the government expects that the package will strengthen dynamism in the economy by improving the growth potential and job creation and in this way raise the revenue-raising capacity. In view of this risk assessment, the budgetary stance in the programme is sufficient to maintain the Stability and Growth Pact’s medium-term objective of a position of close-to-balance for 2004-2008. It also provides a sufficient safety margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations for 2004-2008.-  The general government gross debt ratio is forecast to remain well below 60% of GDP and be on a downward path throughout the programme period. The current programme projects the debt ratio to fall from an estimated 44.6% of GDP in 2004 to about 41% by 2008. Compared with the previous programme update, the current programme projects the debt-to-GDP ratio to be markedly lower from 2005 onwards due to higher nominal GDP growth, a lower level of central government borrowing, lower interest payments and higher tax receipts. The previous programme projected the debt-to-GDP ratio to remain virtually stable at below 45% of GDP in 2004-2007, compared with the current estimated decline of almost three percentage points.-  The programme reviews the government’s structural reform programme, which focuses on improving public sector sustainability by the pension reform taking effect in 2005. The reform, following up on earlier measures, is projected to raise the exit age from the labour force by three years to 62-63 years. It also outlines further measures to lower the persistently high structural unemployment. The collective wage contract agreed in late November 2004 supplemented with tax cuts is expected to foster dynamism in the economy and strengthen job creation. The measures taken and put forward by the government can indeed be expected to raise potential growth and strengthen further the sustainability of public finances.-  Finland appears to be in a favourable position with regard to long-term sustainability of the public finances, in spite of important projected budgetary costs of an ageing population. The strategy outlined in the programme is broad-based and consists of further debt consolidation and structural reforms e.g. further steps of the pension reform and measures aimed at raising the exit age. The structural reforms enacted and planned should have beneficial effects on the public finances.-  Overall, the economic policies outlined in the update are broadly consistent with the country-specific broad economic policy guidelines in the area of public finances. In particular, the multi-annual spending limits introduced in 2003 seem to have worked well in the first year of operation, namely 2004, when the final budgetary spending was below the ceiling and also expenditure in the 2005 budget is within the ceilings. The adherence to the expenditure framework is set to be maintained as it is politically binding.Based on this assessment, the Commission has adopted the attached recommendation for a Council Opinion on the updated stability programme of Finland and is forwarding it to the Council.Recommendation for aCOUNCIL OPINIONin accordance with the third paragraph of Art. 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated stability programme of Finland, 2004-2008THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[4], and in particular Article 5(3) thereof,Having regard to the recommendation of the Commission,After consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:On [17 February 2005] the Council examined the updated stability programme of Finland, which covers the period from 2004 to 2008. The programme broadly complies with the data requirements of the revised “code of conduct on the content and format of stability and convergence programmes”. Some variables concerning the basic assumptions are missing. Accordingly Finland is invited to achieve full compliance with the data requirements.The macro-economic scenario underlying the programme envisages real GDP growth to ease from 3.2% in 2004 to 2.4% on average over the rest of the programme period. On the basis of currently available information, this scenario seems to reflect rather cautious growth assumptions. The programme’s projections for inflation appear realistic and are in line the Commission services estimates.With a projected annual surplus averaging 2% of GDP for the general government, the update is set to maintain a comfortable budgetary position throughout the programme period. The surplus is essentially generated in the social security funds, while central government finances, currently in balance, should post small deficits in 2005-07. The aim is to have central government finances back in balance in 2007. To this end, the government has adopted annual spending limits for the period 2004-2007. Compared with the previous update, the projections for the general government surplus from 2004 to 2007 are virtually unchanged.Although Finland is set to maintain a favourable public sector surplus, the budgetary outcome could be worse than projected as the baseline budgetary trend presented in the update only partially includes the tax cuts of € 1.7 billion i.e. 1.2% of GDP that supplement the two-and-half-year comprehensive wage agreement concluded at the end of November 2004. As there are no announced plans to further restrain spending in 2005-07, the central government deficit would be higher between 2005 and 2007 than mentioned in the programme, unless revenue-raising measures are introduced, thereby also lowering the surplus in general government finances. The government estimates that the wage-agreement-cum-tax-cuts will lower the general government surplus by 0.3 percentage points to about 1.9% of GDP in 2007. However, the government expects that the package will strengthen dynamism in the economy by improving the growth potential and job creation and in this way raise the revenue-raising capacity.In view of this risk assessment, the budgetary stance in the programme is sufficient to maintain the Stability and Growth Pact’s medium-term objective of a position of close-to-balance for 2004-2008. It also provides a sufficient safety margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations for 2004-2008The debt ratio is estimated to have reached 44.6% of GDP in 2004, well below the 60% of GDP Treaty reference value. The programme projects the debt ratio to decline by 3.5 percentage points over the programme period.Finland appears to be in a favourable position with regard to long-term sustainability of the public finances, in spite of important projected budgetary costs of an ageing population. The strategy outlined in the programme is broad-based and consists of further debt consolidation and structural reforms e.g. further steps of the pension reform and measures aimed at raising the exit age. The structural reforms enacted and planned should have beneficial effects on the public finances.The economic policies outlined in the update are broadly consistent with the country-specific broad economic policy guidelines in the area of public finances. In particular, the multi-annual spending limits introduced in 2003 seem to have worked well in the first year of operation, namely 2004, when the final budgetary spending was below the ceilings and also expenditure as proposed in the 2005 budget is within the ceilings. The adherence to the expenditure framework is set to be maintained as it is politically binding.Comparison of key macroeconomic and budgetary projections2004 | 2005 | 2006 | 2007 | 2008 |Real GDP (% change) | SP Dec 2004 | 3.2 | 2.8 | 2.4 | 2.2 | 2.0 |COM Oct 2004 | 3.0 | 3.1 | 2.7 | n.a. | n.a. |SP Nov 2003 | 2.7 | 2.5 | 2.4 | 2.4 | n.a. |HICP inflation (%) | SP Dec 2004 | 0.2 | 1.4 | 1.8 | 1.8 | 1.8 |COM Oct 2004 | 0.2 | 1.5 | 1.7 | n.a. | n.a. |SP Nov 2003 | 0.7 | 1.3 | 1.8 | 1.8 | n.a. |General government balance (% of GDP) | SP Dec 2004 | 2.0 | 1.8 | 2.1 | 2.2 | 2.0 |COM Oct 2004 | 2.3 | 2.1 | 2.2 | n.a. | n.a. |SP Nov 2003 | 1.7 | 2.1 | 2.1 | 2.2 | n.a. |Primary balance (% of GDP) | SP Dec 20042 | 3.7 | 3.4 | 3.8 | 3.9 | 3.7 |COM Oct 2004 | 4.1 | 3.9 | 3.8 | n.a. | n.a. |SP Nov 2003 | 3.7 | 4.0 | 4.1 | 4.3 | n.a. |Cyclically-adjusted balance (% of GDP) | SP Dec 20041 | 2.1 | 1.7 | 2.0 | 2.1 | 1.9 |COM Oct 2004 | 2.8 | 2.3 | 2.3 | n.a. | n.a. |SP Nov 20031 | 2.4 | 2.4 | 2.3 | 2.2 | n.a. |Government gross debt (% of GDP) | SP Dec 2004 | 44.6 | 43.4 | 42.5 | 41.7 | 41.1 |COM Oct 2004 | 44.8 | 43.4 | 42.2 | n.a. | n.a. |SP Nov 2003 | 44.7 | 44.9 | 45.0 | 44.6 | n.a. |Note: 1Commission services calculations on the basis of the information in the programme 2The Finnish authorities provide primary balances on the basis of net interest payments rather than gross interest payments. The Commission services have recalculated the figures based on the data given in the programme. Sources: Stability programme (SP); Commission services autumn 2004 economic forecasts (COM); Commission services calculations |[1] OJ L209, 2.8.1997. All the documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm.[2] Revised Opinion of the Economic and Financial Committee on the content and format of stability and convergence programmes, endorsed by the ECOFIN Council on 10.7.2001.[3] COM(2002) 668 final, 27.11.2002.[4] OJ L209, 2.8.1997, p. 1. The documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm.


Avis juridique important

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31994H0175

Commission Recommendation of 11 March 1994 concerning a coordinated programme for the official control of foodstuffs for 1994

Official Journal L 080 , 24/03/1994 P. 0025 - 0028

COMMISSION RECOMMENDATION of 11 March 1994 concerning a coordinated programme for the official control of foodstuffs for 1994 (94/175/EC)THE COMMISSION OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Community, and in particular the second indent of Article 155 thereof,  Having regard to Council Directive 89/397/EEC of 14 June 1989 on the official control of foodstuffs (1), and in particular Article 14 (3) thereof,  After consultation with the Standing Committee for Foodstuffs,  Whereas it is necessary, with a view to the sound operation of the internal market, to arrange for coordinated food inspection programmes at Community level;  Whereas such programmes should not only establish compliance with the Community legislation but also serve for checking that the food is fit for consumption;  Whereas simultaneous implementation of national programmes and coordinated programmes can provide experience which is still widely lacking at present,  HEREBY RECOMMENDS THAT THE MEMBER STATES TAKE SAMPLES OF THE FOLLOWING PRODUCTS AND ANALYSE THE SPECIFIED PARAMETERS IN 1994:  1. Aflatoxine B 1 in products liable to contain aflatoxin B 1, especially those intended for children.  2. Lysteria monocytogenes in meat-based patés, sold in the retail sector.  3. Adulteration of frozen, fish-based products.  4. Adulteration of goat's and sheep's cheese.   Explanatory memorandum of the coordinated programme of inspections for 1994  In 1994 the coordinated programme of inspections provided for by Article 14 (3) of Directive 89/397/EEC will be carried out for the second time. At the request of the Member  States, the Commission has spent ample time discussing the 1994 programme with the technical experts of the Member States.  Like last year, the subjects chosen cover existing Community problems relating to the protection of public health and consumer interests, as well as fair trade.  In order not to overburden the budget for laboratory costs in certain Member States, the Commission decided to limit the number of subjects this year to four.  Each subject is accompanied by a suggested method of anlaysis. As far as sampling is concerned, no uniform rates have been set. The number of samples taken should be extensive enough to provide an overview of the market in the foodstuffs concerned in  each Member State.  The number of samples and the methods of analysis used should be mentioned or described briefly on the answer sheets annexed hereto.  I. Aflatoxine B 1 in products liable to contain aflatoxin B 1, especially those intended for children Aflatoxine B 1 is a carcinogenic toxin, formed by the fungi Aspergillus flavus and Aspergillus parasiticus. The objective of this analysis is to determine the content of this toxin in products liable to contain aflatoxin B 1, especially those intended  for children.  II. Lysteria monocytogenes in meat-based patés, sold in the retail sector Lysteria monocytogenes has become established as a foodborne pathogen and may be transmitted to human beings through a variety of foodstuffs. Surveys suggest that the incidence of listeriosi is increasing. This involves a risk of infection, particularly  with infants, elderly people, pregnant women and immuno-compromised individuals.  III. Adulteration of frozen, fish-based products Most frozen fish-based products such as fish fingers, nuggets, bites, fish fillets and seafood specialities such as prawns, scampis and crab are made from frozen fishblocks. Now that popular types of fish such as cod and haddock have become expensive,  there are indications that block producers are replacing more expensive fish with cheaper varieties. The survey should examine specification in a wide range of frozen fish products for which label declarations of named fish species are made. In order to  limit this survey, it should specifically target cod, haddock and scampi products.  IV. Adulteration of goat's and sheep's cheese This analysis is specifically aimed at detecting the illicit use of cow's milk in the production of sheep's and goat's cheese. Those products should be examined for which label declarations are made. In addition to sampling and analysis, inspections of  food businesses may be useful.  Done at Brussels, 11 March 1994.  For the Commission Martin BANGEMANN Member of the Commission  (1) OJ No L 186, 30. 6. 1989, p. 23.      ANNEX


title: Council Recommendation (EU) 2016/210 of 12 February 2016 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (eighth EDF) for the financial year 2014

text:
               16.2.2016

               EN

               Official Journal of the European Union

               L 39/59

         COUNCIL RECOMMENDATION (EU) 2016/210
   of 12 February 2016
   concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (eighth EDF) for the financial year 2014
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union,
   Having regard to the fourth ACP-EEC Convention, signed at Lomé on 15 December 1989 (1) and amended by the Agreement signed in Mauritius on 4 November 1995 (2),
   Having regard to the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of the Community aid under the Second Financial Protocol to the fourth ACP-EC Convention (3) (the ‘Internal Agreement’) setting up, amongst others, the eighth European Development Fund (eighth EDF), and in particular Article 33(3) thereof,
   Having regard to the Financial Regulation of 16 June 1998 applicable to development finance cooperation under the fourth ACP-EC Convention (4), and in particular Articles 66 to 74 thereof,
   Having examined the revenue and expenditure account and the balance sheet relating to the operations of the eighth EDF as at 31 December 2014 and the Annual Report of the Court of Auditors on the activities funded by the 8th, 9th, 10th and 11th European Development Funds (EDFs) concerning the financial year 2014, together with the Commission's replies contained in that Annual Report (5),
   Whereas:

               (1)

               Pursuant to Article 33(3) of the Internal Agreement, the discharge for the financial management of the eighth EDF is to be given to the Commission by the European Parliament on the recommendation of the Council.

               (2)

               The overall implementation by the Commission of the operations of the eighth EDF during the financial year 2014 has been satisfactory,

         HEREBY RECOMMENDS that the European Parliament give the Commission a discharge in respect of the implementation of the operations of the eighth EDF for the financial year 2014.

      Done at Brussels, 12 February 2016.

            For the Council

            The President

         J.R.V.A. DIJSSELBLOEM

      (1)  OJ L 229, 17.8.1991, p. 3.

      (2)  OJ L 156, 29.5.1998, p. 3.

      (3)  OJ L 156, 29.5.1998, p. 108.

      (4)  OJ L 191, 7.7.1998, p. 53.

      (5)  OJ C 373, 10.11.2015, p. 289.


title: Council Recommendation of 11 July 2017 on the 2017 National Reform Programme of the Netherlands and delivering a Council opinion on the 2017 Stability Programme of the Netherlands

text:
               9.8.2017

               EN

               Official Journal of the European Union

               C 261/79

         COUNCIL RECOMMENDATION
   of 11 July 2017
   on the 2017 National Reform Programme of the Netherlands and delivering a Council opinion on the 2017 Stability Programme of the Netherlands
   (2017/C 261/18)
   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 16 November 2016, the Commission adopted the Annual Growth Survey, marking the start of the 2017 European Semester for economic policy coordination. The priorities of the Annual Growth Survey were endorsed by the European Council on 9-10 March 2017. On 16 November 2016, on the basis of Regulation (EU) No 1176/2011, the Commission adopted the Alert Mechanism Report, in which it identified the Netherlands 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 9-10 March 2017. On 21 March 2017, the Council adopted the Recommendation on the economic policy of the euro area (‘Recommendation for the euro area’) (3).

               (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, the Netherlands should ensure the full and timely implementation of the Recommendations for the euro area, as reflected in recommendations (1) and (2) below.

               (3)

               The 2017 country report for the Netherlands was published on 22 February 2017. It assessed the Netherlands’ progress in addressing the country-specific recommendations adopted by the Council on 12 July 2016, the follow-up given to the country-specific recommendations adopted in previous years and the Netherlands’ 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 22 February 2017. The Commission’s analysis led it to conclude that the Netherlands is experiencing macroeconomic imbalances. The Netherlands shows the largest three-year average current-account surplus in terms of GDP among euro-area Member States. The surplus suggests a suboptimal allocation of resources, leaving opportunities for increased growth and welfare. The disposable income of households is hampered by a high compulsory payment wedge. Private debt is high, specifically the stock of household mortgage debt. The long household balance sheets increase the vulnerability to financial shocks. The need for action to reduce the risk of adverse effects on the Dutch economy and, given its size and cross-border relevance, on the economic and monetary union, is particularly important.

               (4)

               On 26 April 2017, the Netherlands submitted its 2017 National Reform Programme and its 2017 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 (4), where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking effectiveness of the ESI Funds to sound economic governance.

               (6)

               The Netherlands is currently in the preventive arm of the Stability and Growth Pact and subject to the debt rule. In its 2017 Stability Programme, the Government plans an increase in the general government surplus from 0,5 % of GDP in 2017 to 1,3 % of GDP in 2020. The medium-term budgetary objective — a structural deficit of 0,5 % of GDP — continues to be met with a margin throughout the programme period. According to the 2017 Stability Programme, the government debt-to-GDP ratio is projected to fall to 58,5 % in 2017, below the 60 %-of-GDP Treaty reference value. The Government plans a further decline in the government debt ratio to 49,3 % of GDP in 2020. The macroeconomic scenario underpinning those budgetary projections is plausible. Based on the Commission 2017 spring forecast, the structural balance is projected to increase from a surplus of 0,2 % of GDP in 2017 to 0,4 % of GDP in 2018, above the medium-term budgetary objective. General government debt is forecast to remain on a firm downward path beyond the requirements of the debt rule. Overall, the Council is of the opinion that the Netherlands is projected to comply with the provisions of the Stability and Growth Pact in 2017 and 2018. At the same time, while respecting the medium-term objective, there remains scope to support potential growth and domestic demand by using fiscal and structural policies, including investment in research and development, and by creating conditions for higher real wage growth, also in the context of persistent external imbalances.

               (7)

               The recent growth in employment can be largely attributed to an increase in the number of people employed on temporary contracts and of the self-employed. The high and increasing percentage of temporary contracts as well as the rapid increase in self-employment without employees is observed in the context of great differences in applicable labour regulations, labour protection, as well as differences in tax and social security legislation. Although some measures have been taken, some of these factors still create a financial incentive for employees to start working as self-employed or favours hiring them under a temporary contract. This may have particularly distortive effects at the margin of the labour market and may have contributed to the observed moderation in aggregate real wage growth. Self-employed are more often under-insured against disability, unemployment and old age. This could affect the sustainability of the social security system in the long run. The enforcement of measures to tackle bogus self-employment is suspended until 2018. The employment situation of people with a migrant background remains an important challenge. The employment rate for non-EU-born migrants is 20 percentage points lower than for people born in the Netherlands, only a small part of which is explained by differences in age and educational achievement.

               (8)

               The rise in recent years in the household saving rate was partly due to higher saving in the second pillar of the pension system (mandatory supplementary private schemes), to which the regulatory environment contributed. An appropriate intra- and inter-generational distribution of costs and risks beyond the adopted rules on indexation and financial buffers (financial assessment framework) would help households to allocate their financial means in more growth-friendly ways. The Government announced its intention to substantially reform the second pension pillar in order to improve the coverage and to create a more transparent, more flexible and actuarially fairer system.

               (9)

               Rigidities and distortive incentives that have built up over decades shape house financing and sectoral savings patterns. Households’ tendency to leverage up gross mortgage debt against housing wealth largely reflects long-standing fiscal incentives, in particular the full tax deductibility of mortgage interest. Despite the strengthening of the economic recovery, no further measures have been taken to address this since 2012.

               (10)

               Investment declined strongly during the crisis and has recovered only partially since. The weakness in economy-wide investment appears to have a strong cyclical character, and was driven by a downturn in the housing market as well as fiscal consolidation choices. While barriers to investment seem to be minor, procedures to obtain building permits are relatively lengthy. Low investment in renewable energy appears linked to past market dynamics, market uncertainty and regulatory factors. Public and private expenditure on R & D is low given the educational attainment, academic achievement and the level of economic development compared to the top performing Member States. Government expenditure in this area has stagnated since 2014, while private R & D spending remains low. No progress has been made on the related 2016 Council Recommendation.

               (11)

               In the context of the 2017 European Semester, the Commission has carried out a comprehensive analysis of the Netherlands’ economic policy and published it in the 2017 country report. It has also assessed the 2017 Stability Programme, the 2017 National Reform Programme and the follow-up given to the recommendations addressed to the Netherlands in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in the Netherlands, 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.

               (12)

               In the light of this assessment, the Council has examined the 2017 Stability Programme and is of the opinion (5) that the Netherlands is expected to comply with the Stability and Growth Pact.

               (13)

               In the light of the Commission’s in-depth review and this assessment, the Council has examined the 2017 National Reform Programme and the 2017 Stability Programme. Its recommendations made under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) and (2) to the Netherlands below,

         HEREBY RECOMMENDS that the Netherlands take action in 2017 and 2018 to:

               1.

               While respecting the medium-term objective, use fiscal and structural policies to support potential growth and domestic demand, including investment in research and development. Take measures to reduce the remaining distortions in the housing market and the debt bias for households, in particular by decreasing mortgage interest tax deductibility.

               2.

               Tackle remaining barriers to hiring staff on permanent contracts. Address the high increase in the self-employed without employees, including by reducing tax distortions favouring self-employment, without compromising entrepreneurship, and by promoting access of the self-employed to affordable social protection. Based on the broad preparatory process already launched, make the second pillar of the pension system more transparent, inter-generationally fairer and more resilient to shocks. Create conditions to promote higher real wage growth, respecting the role of the social partners.

      Done at Brussels, 11 July 2017.

            For the Council

            The President

         T. TÕNISTE

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  OJ C 92, 24.3.2017, p. 1.

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

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