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

text:
               9.8.2017

               EN

               Official Journal of the European Union

               C 261/46

         COUNCIL RECOMMENDATION
   of 11 July 2017
   on the 2017 National Reform Programme of Italy and delivering a Council opinion on the 2017 Stability Programme of Italy
   (2017/C 261/11)
   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 Italy 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, Italy should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) to (4) below.

               (3)

               The 2017 country report for Italy was published on 22 February 2017. It assessed Italy’s 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 Italy’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 22 February 2017. The Commission’s analysis led it to conclude that Italy is experiencing excessive macroeconomic imbalances. High government debt and protracted weak productivity dynamics imply risks with cross-border relevance, in a context of high non-performing loans and unemployment. The need for action to reduce the risk of adverse effects on the Italian economy and, given its size and cross-border relevance, on the economic and monetary union, is particularly important.

               (4)

               On 27 April 2017, Italy 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. Italy’s 2017 National Reform Programme includes commitments both for the short and medium term. In the short term, the final adoption of the pending laws concerning competition and the reform of criminal process and the statute of limitations, the implementation of the anti-poverty law as well as measures related to firm-level bargaining, tax shift and privatisation are planned. In the medium term, measures concern public finances, taxation, the labour market, the banking and credit system, competition, public administration and justice, and investment. The 2017 National Reform Programme also covers the challenges identified in the 2017 country report and the Recommendation for the euro area, including the need to relaunch investment and ensure the sustainability of public finances. If fully implemented within the indicated timelines, these measures would help address Italy’s macroeconomic imbalances and country-specific recommendations. Based on the assessment of Italy’s policy commitments, the Commission confirms its previous assessment that at this stage no further steps are warranted in the framework of the macroeconomic imbalances procedure provided for in Regulation (EU) No 1176/2011 and Regulation (EU) No 1174/2011 of the European Parliament and of the Council (4). The implementation of the policy reform agenda will be followed closely by means of specific monitoring.

               (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 effectiveness of the ESI Funds to sound economic governance.

               (6)

               Italy 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 improvement in the headline deficit from 2,4 % of GDP in 2016 to 2,1 % in 2017, 1,2 % in 2018, and a broadly balanced budgetary position by 2019. The medium-term budgetary objective, set at a balanced budgetary position in structural terms, is planned to be reached by 2019 and maintained in 2020, whereas the recalculated (6) structural balance points to a small structural deficit (0,3 % of GDP) in both years. After having further increased in 2016 (to 132,6 % of GDP, from 132,1 % in 2015), the general government debt-to-GDP ratio is projected in the 2017 Stability Programme to broadly stabilise in 2017 and to then decline as of 2018, reaching 125,7 % in 2020. The uncertainty on the composition and implementation of the medium-term budgetary strategy of the 2017 Stability Programme entails downside risks for both the growth projections and the achievement of the budgetary targets. In particular, the Commission 2017 spring forecast expects almost the same real GDP growth for 2018 as the 2017 Stability Programme, in spite of a significantly higher deficit. In fact, the Commission forecast does not incorporate a VAT hike (0,9 % of GDP) legislated as a ‘safeguard clause’ to achieve the budgetary targets in 2018, also because the 2017 Stability Programme confirms the intention of not activating it without providing details about alternative compensating measures. Furthermore, the 2017 Stability Programme indicates the intention to find additional room for reducing the tax burden.

               (7)

               The 2017 Stability Programme indicates that the overall budgetary impact of the exceptional inflow of refugees and security-related measures in 2016 and 2017 is significant and provides adequate evidence of the scope and nature of these additional budgetary costs. According to the Commission, the eligible additional expenditure in 2016 amounted to 0,06 % of GDP for the exceptional inflow of refugees and to 0,06 % of GDP for security-related measures. For 2017, the eligible expenditure related to exceptional inflow of refugees is preliminarily estimated at 0,16 % of GDP (7). Moreover, the Italian authorities invoked the unusual-event clause in 2017 for exceptional seismic activity. The eligible expenditure related to exceptional seismic activity is preliminarily estimated at 0,18 % of GDP in 2017 (8). 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 inflow of refugees, the severity of the terrorist threat and the exceptional seismic activity are unusual events, their impact on Italy’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 2016 has been reduced by 0,12 % of GDP to take into account additional refugee-related and security-related costs. Regarding 2017, a final assessment, including on the eligible amounts, will be made in spring 2018 on the basis of observed data as provided by the Italian authorities.

               (8)

               For 2016, Italy was granted a temporary deviation of 0,5 % of GDP from the required adjustment path towards the medium-term budgetary objective to take account of major structural reforms with a positive impact on the long-term sustainability of public finances and a further 0,25 % of GDP to take account of national investment expenditure in projects co-financed by the Union. As regards the investment clause, one of the eligibility criteria is the increase in public investment. Outturn data for 2016 showed a decline in public investment in 2016 compared to 2015 (by EUR 1,6 billion). However, the Council acknowledges that there are specific factors which constrained public investment last year. One factor was uncertainty associated with the transition to the new code of public procurement and concessions, which was revised in line with the 2016 country-specific recommendations. Moreover, and even more importantly, in 2016 there was a sharp fall in investment financed through Union funds as a result of the start of the new programming period, while nationally financed investment marginally increased (by EUR 1,1 billion). Therefore, as nationally financed investment rose in 2016 and the expenditure related to the investment clause did not substitute for it, a temporary deviation of 0,21 % of GDP can be granted to Italy in relation to the investment clause, corresponding to national expenditure eligible for co-financing as reported in the 2017 Stability Programme. Once the overall additional flexibility of 0,83 % of GDP under the unusual event, structural reform and investment clauses is taken into account, the Commission 2017 spring forecast points to some deviation from the recommended adjustment path towards the medium-term objective in 2016.

               (9)

               On 12 July 2016, the Council recommended Italy to achieve an annual fiscal adjustment of 0,6 % or more of GDP towards the medium-term budgetary objective in 2017. Based on the Commission 2017 spring forecast, there is a risk of a significant deviation from the recommended adjustment path towards the medium-term objective in 2017 and for 2016 and 2017 taken together. However, that conclusion would change to a risk of some deviation if the temporary allowance for the unusual-event clause related to the exceptional inflow of refugees and to the preventive investment plan for the protection of the national territory against seismic risks (preliminarily estimated at 0,34 % of GDP, overall) is deducted from the requirement in 2017.

               (10)

               In 2018, in the light of its fiscal situation and in particular of its debt level, Italy is expected to further adjust towards its medium-term budgetary objective of a balanced budgetary position in structural terms. According to the commonly agreed adjustment matrix under the Stability and Growth Pact, that adjustment translates into a requirement of a nominal rate of reduction of net primary government expenditure by at least 0,2 % in 2018. It would correspond to an annual structural adjustment of at least 0,6 % of GDP. Under unchanged policies, there is a risk of a significant deviation from the requirement in 2018. Italy is prima facie not forecast to comply with the debt rule in 2017 and 2018. Overall, the Council is of the opinion that Italy needs to stand ready to take further measures to ensure compliance in 2017 and that further measures will be needed in 2018 to comply with the provisions of the Stability and Growth Pact. However, as foreseen in Regulation (EC) No 1466/97, the assessment of the budgetary plans and outcomes should take account of the Member State’s budgetary balance in the light of the cyclical conditions. As recalled in the Commission Communication on the 2017 European Semester accompanying these country-specific recommendations, the assessment of the 2018 Draft Budgetary Plan and subsequent assessment of 2018 budget outcomes will need to take due account of the goal of achieving a fiscal stance that contributes to both strengthening the ongoing recovery and ensuring the sustainability of Italy’s public finances. In that context, the Council notes that the Commission intends to carry out an overall assessment in line with Regulation (EC) No 1466/97, in particular in the light of the cyclical situation of Italy.

               (11)

               Due to Italy’s prima facie non-compliance with the debt rule in 2015, on 22 February 2017 the Commission issued a report under Article 126(3) of the TFEU, which concluded that ‘Unless the additional structural measures, worth at least 0,2 % of GDP, that the Government committed to adopt at the latest in April 2017 are credibly enacted by that time in order to reduce the gap to broad compliance with the preventive arm in 2017 (and thus in 2016), the current analysis suggests that the debt criterion as defined in the Treaty and in Regulation (EC) No 1467/97 should be considered as currently not complied with. However, a decision on whether to recommend opening an excessive deficit procedure would only be taken on the basis of the Commission 2017 spring forecast, taking into account outturn data for 2016 and the implementation of the fiscal commitments made by the Italian authorities in February 2017.’ In April 2017, the Government adopted the requested additional consolidation measures. Therefore, no further steps are deemed to be necessary for compliance with the debt criterion in 2015 at this stage. The Commission will reassess Italy’s compliance with the debt criterion in autumn 2017, based on notified data for 2016 and the Commission 2017 autumn forecast, which will incorporate new information on budgetary implementation in 2017 and actual budgetary plans for 2018.

               (12)

               Italy’s high public debt ratio is set to stabilise, but not decrease, due to the worsening of the structural primary balance and current macroeconomic conditions. At more than 130 % of GDP, this implies that significant resources are earmarked to cover debt servicing costs, to the detriment of more growth-enhancing items including education, innovation and infrastructure.

               (13)

               Italy’s tax system is not supportive of economic growth and efficiency on several grounds. Despite a recent modest reduction, the tax burden on factors of production remains among the highest in the Union. There is scope to shift further towards taxes less detrimental to growth, in a budget-neutral way. The first residence tax was repealed in 2015, which was a step back in the process of achieving a more efficient tax structure. In spite of national legislation requiring it on an annual basis, the long awaited revision of tax expenditures, in particular with respect to the reduced value added tax rates, was further postponed. A reform of outdated cadastral values in line with current market values is still pending. Low tax compliance and the complex tax code increase the burden on compliant firms and households. Recent measures, such as mandatory electronic invoicing and the ‘split payment’ for purchases by government bodies, go in the right direction. However, electronic invoicing is not compulsory for private sector transactions and limits on using cash have recently been raised, so that the use of electronic payments remains well below the Union average, to the detriment of tax compliance.

               (14)

               As regards the budgetary process, a comprehensive reform was passed in 2016. The Commission will continue to monitor implementation of the reform, which would make the spending review a more integral part of the budgeting process.

               (15)

               Italy’s framework conditions, public administration and business environment are still affected by a number of structural inefficiencies. These inefficiencies continue to slow down implementation of reforms, deter investment, create uncertainty and open opportunities for rent-seeking. The reforms of the civil justice system adopted over the past years to increase the efficiency of the justice system, improve case management and ensure procedural discipline, are only slowly starting to show results. The length of civil justice proceedings remains a major challenge. Although decreasing slightly at lower instances, both the disposition time and the backlog for civil and commercial lawsuits continue to be among the highest in the Union at all instances. A pending reform of civil proceedings provides for a further tightening of admissibility criteria for appeals, streamlined civil procedures at all instances and disincentives against vexatious litigation.

               (16)

               Several indicators confirm that corruption is still a major problem in Italy, despite the reforms adopted so far. The long-overdue reform of the statute of limitations to step up the fight against corruption has been pending since 2014. In its current form, the statute of limitations leads to a high proportion of cases getting time-barred after first-instance conviction. Moreover, the national anti-corruption authority has limited financial and human resources to exercise its powers, and the prevention framework remains fragmented.

               (17)

               A comprehensive enabling law reforming the public administration was adopted in 2015. It has the potential to improve the efficiency and effectiveness of the public administration. However, following the November 2016 Constitutional Court ruling that declared the procedure followed for the adoption of some implementing legislative decrees unconstitutional, the implementation of key parts of the reform is still pending. In particular, the ruling concerns three key areas of the reform: local public services, public employment, and publicly-owned enterprises. New legislative initiatives are needed to reform the local public services and public employment at management level, as the deadline for their decrees expired in November 2016. Regarding publicly-owned enterprises, the decree adopted before the ruling needs to be amended. The reform aims to reduce the number of publicly-owned enterprises, improve their efficiency, and ensure that they operate under the same rules as privately-owned entities. The implementation of the planned privatisations would also contribute to the rationalisation of publicly-owned enterprises.

               (18)

               Framework conditions for competition also remain unfavourable. In particular, the 2015 annual competition law has not yet been adopted. Significant barriers to competition persist in certain sectors, such as regulated professions, concessions, public procurement and the system of authorisations as well as local public services, including transport. In particular, progress in fostering an efficient, transparent and competition-driven functioning of the public transport market, in particular for railways under government concessions, is still very limited. According to a new indicator developed by the Commission, the level of restrictiveness is higher in Italy than the Union-weighted average for most of the professions analysed. As part of a package of measures to tackle barriers in services markets, in January 2017 specific guidance by profession to address this issue was made in a Communication from the Commission on reform recommendations for regulation in professional services.

               (19)

               The banking sector’s large stock of non-performing loans remains a drag on bank profits and their ability to generate capital internally. This weighs on credit supply, in particular to small firms. The policy initiatives taken so far have not yet resulted in a significant reduction in non-performing loans. Supervisory guidance on non-performing loan management at national level remains underdeveloped medium-sized and small banks continue to be more vulnerable than large credit institutions. The Commission will therefore monitor the implementation of the corporate governance reform of the largest popolari banks and small mutual banks, which is key to the consolidation of the banking system. Reform measures have been taken recently, but the insolvency and collateral enforcement framework continues to be insufficiently supportive of swift non-performing loan work-out and restructuring, especially in relation to small and micro-firms. A draft enabling law aiming at overhauling and streamlining insolvency and enforcement tools, currently under discussion in Parliament, could help to overcome the existing inefficiencies and contribute to the development of a secondary market for distressed debt in Italy.

               (20)

               Despite the gradual improvement of the labour market, supported by reforms, long-term and youth unemployment remain high (6,7 % and 38 % respectively in 2016) and more than 1,2 million young people are not in education, employment or training. While the implementation of the Youth Guarantee (9) has progressed a lot, some challenges remain to ensure a more effective and a full-scale implementation. The percentage of Youth Guarantee beneficiaries still in employment, education, apprenticeship or traineeship six months after exit is above the Union average. However, the outreach to the target population is still low and regional differences in the delivery remain significant. The reform of the active labour market policies, including its governance system, is still at an early stage and employment services remain weak, with wide regional disparities. Adult learning is not sufficiently developed, which may negatively weigh on labour market outcomes of low-skilled people.

               (21)

               The participation of women in the labour market and their labour force potential remains largely underutilised. The female employment rate is one of the lowest in the Union. Some features of the tax-benefit system continue to discourage second earners from participating in the labour force while access to affordable care services (for children and the elderly) remains limited, with wide regional disparities. Paternity leave is among the lowest in the Union.

               (22)

               Second-level bargaining is not broadly used. This hampers the efficient allocation of resources and the responsiveness of wages to local economic conditions. This is also due to the existing framework rules and practices for collective bargaining, which leave limited scope for local-level bargaining. The agreements signed by social partners since January 2014 setting out procedures and criteria for measuring the representativeness of trade unions, which would reduce uncertainty in industrial relations, have not yet been implemented. Tax rebates on productivity-related pay increases, have not proved effective in extending the use of second-level bargaining significantly.

               (23)

               The rate of people at risk of poverty or social exclusion is well above the Union average, especially for children and people with a migrant background. There are also substantial regional disparities. Some progress has been made regarding the national anti-poverty strategy. The recently adopted Inclusion Income scheme is a positive step towards establishing a single comprehensive scheme against poverty. Its effectiveness will depend on its proper implementation with the mobilisation of adequate resources (including through the streamlining of various social allocations), appropriate targeting through means-testing and priority allocation to families with children and effective procedures on the ground, both in delivering income support and in providing well integrated services. At this stage, it is unclear whether the financial resources will be sufficient to address Italy’s poverty challenge. Catering for additional resources while respecting the budgetary targets, reducing the fragmentation of the social assistance system, rationalising social spending, and addressing its current bias towards pensions, remain key challenges.

               (24)

               In the context of the 2017 European Semester, the Commission has carried out a comprehensive analysis of Italy’s 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 Italy in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Italy, 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.

               (25)

               In the light of this assessment, the Council has examined the 2017 Stability Programme and its opinion (10) is reflected in particular in recommendation (1) below.

               (26)

               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) to (4) below,

         HEREBY RECOMMENDS that Italy take action in 2017 and 2018 to:

               1.

               Pursue a substantial fiscal effort in 2018, in line with the requirements of the preventive arm of the Stability and Growth Pact, taking into account the need to strengthen the ongoing recovery and to ensure the sustainability of Italy’s public finances. Ensure timely implementation of the privatisation programme and use windfall gains to accelerate the reduction of the general government debt-to-GDP ratio. Shift the tax burden from the factors of production onto taxes less detrimental to growth in a budget-neutral way by taking decisive action to reduce the number and scope of tax expenditures, reforming the outdated cadastral system and reintroducing the first residence tax for high-income households. Broaden the compulsory use of electronic invoicing and payments.

               2.

               Reduce the trial length in civil justice through effective case management and rules ensuring procedural discipline. Step up the fight against corruption, in particular by revising the statute of limitations. Complete reforms of public employment and improve the efficiency of publicly-owned enterprises. Promptly adopt and implement the pending law on competition and address the remaining restrictions to competition.

               3.

               Accelerate the reduction in the stock of non-performing loans and step up incentives for balance-sheet clean-up and restructuring, in particular in the segment of banks under national supervision. Adopt a comprehensive overhaul of the regulatory framework for insolvency and collateral enforcement.

               4.

               With the involvement of social partners, strengthen the collective bargaining framework to allow collective agreements to better take into account local conditions. Ensure effective active labour market policies. Facilitate the take-up of work for second earners. Rationalise social spending and improve its composition.

      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 1174/2011 of the European Parliament and of the Council of 16 November 2011 on enforcement measures to correct excessive macroeconomic imbalances in the euro area (OJ L 306, 23.11.2011, p. 8).

      (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)  Cyclically-adjusted balance net of one-off and temporary measures, recalculated by the Commission using the commonly agreed methodology.

      (7)  This amount is based on the 0,25 % of GDP overall budgetary cost estimated in the 2017 Stability Programme from which the temporary deviations of 0,03 % of GDP and of 0,06 % already granted in 2015 and 2016, respectively, are deducted. In its opinion on the 2017 Draft Budgetary Plan for Italy the Commission announced that it would stand ready to consider an additional deviation due to the persistent exceptional inflow of refugees in Italy also in light of the European Council of October 2016 which recognised ‘the significant contribution, also of financial nature, made by frontline Member States in recent years’.

      (8)  In its opinion on the 2017 Draft Budgetary Plan for Italy, the Commission considered that expenditure earmarked for emergency management and the preventive investment plan for the protection of the national territory against seismic risks could be considered of integrated nature. For the following years only positive incremental changes in resources earmarked for this purpose would be considered eligible for further possible temporary deviations.

      (9)  Council Recommendation of 22 April 2013 on establishing a Youth Guarantee (OJ C 120, 26.4.2013, p. 1).

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


title: Council Recommendation of 9 July 2013 on the National Reform Programme 2013 of the Czech Republic and delivering a Council opinion on the Convergence Programme of the Czech Republic, 2012-2016

text:
               30.7.2013

               EN

               Official Journal of the European Union

               C 217/14

      COUNCIL RECOMMENDATION

   of 9 July 2013
   on the National Reform Programme 2013 of the Czech Republic and delivering a Council opinion on the Convergence Programme of the Czech Republic, 2012-2016
   2013/C 217/04
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(2) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

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

               (2)

               On 13 July 2010, the Council adopted a recommendation on the broad guidelines for the economic policies of the Member States and the Union (2010 to 2014) and, on 21 October 2010, it adopted a decision on guidelines for the employment policies of the Member States (2), which together form the ‘integrated guidelines’. Member States were invited to take the integrated guidelines into account in their national economic and employment policies.

               (3)

               On 29 June 2012, the Member States’ Heads of State or Government decided on a Compact for Growth and Jobs, providing a coherent framework for action at national, EU and euro area levels using all possible levers, instruments and policies. They decided on action to be taken at the level of the Member States, in particular expressing full commitment to achieving the objectives of the Europe 2020 strategy and to implementing the country-specific recommendations.

               (4)

               On 10 July 2012, the Council adopted a Recommendation (3) (‘the 2012 Recommendation’) on the Czech Republic’s National Reform Programme for 2012 and delivered its opinion on the Czech Republic’s Convergence Programme for 2012-2015.

               (5)

               On 28 November 2012, the Commission adopted the Annual Growth Survey, marking the start of the 2013 European Semester for economic policy coordination. Also on 28 November 2012, the Commission, on the basis of 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 (4), adopted the second Alert Mechanism Report, in which the Czech Republic was not identified as one of the Member States for which an in-depth review would be carried out.

               (6)

               The European Parliament has been duly involved in the European Semester, in accordance with Regulation (EC) No 1466/97, and, on 7 February 2013, adopted a resolution on employment and social aspects in the Annual Growth Survey 2013 and a resolution on the contribution to the Annual Growth Survey 2013.

               (7)

               On 14 March 2013, the European Council endorsed the priorities for ensuring financial stability, fiscal consolidation and action to foster growth. It underscored the need to pursue differentiated, growth-friendly fiscal consolidation, to restore normal lending conditions to the economy, to promote growth and competitiveness, to tackle unemployment and the social consequences of the crisis, and to modernise public administration.

               (8)

               On 17 April 2013, the Czech Republic submitted its 2013 National Reform Programme and, on 26 April 2013, its Convergence Programme for the period 2012-2016. In order to take account of their interlinkages, the two Programmes have been assessed at the same time.

               (9)

               Based on the assessment of the Convergence Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that the Czech Republic has reduced the headline deficit by 1,4 % (5) of GDP from 2009 to 2012 due to substantial consolidation efforts and that, based on current expectations, it is on track to correct the excessive deficit. The macroeconomic scenario underpinning the budgetary projections in the Convergence Programme is plausible. According to the Convergence Programme, real GDP growth is expected to be at 0 % and 1,2 % in 2013 and 2014, respectively, compared to -0,4 % and 1,6 % in 2013 and 2014 respectively in the Commission services 2013 spring forecast. The objective of the budgetary strategy outlined in the Convergence Programme is to keep the general government deficit below the 3 % of GDP Treaty reference value. The general government deficit target of 2,8 % of GDP in 2013 is in line with the deadline for correcting the excessive deficit set out in the Council Recommendation of 2 December 2009. The Commission services 2013 spring forecast projects the government deficit at 2,9 % and 3 % of GDP in 2013 and 2014, respectively. There is a risk of worse-than-expected budgetary outcome in 2013 stemming from additional corrections in EU funds reimbursements. On the positive side, one-off revenues related to the planned auction of new telecom frequency bands could result in a better-than-expected budgetary outcome in 2013.
               The Convergence Programme confirms the previous medium-term objective (MTO) of a deficit of 1 % of GDP, which adequately reflects the requirements of the Stability and Growth Pact. The (recalculated) structural budget deficit is projected to increase by 0,3 %, 0,2 % and 0,5 % of GDP in 2014, 2015 and 2016 respectively; therefore no adjustment towards the MTO is foreseen in the Convergence Programme, which is not in line with the Stability and Growth Pact. The rate of growth of government expenditure complies with the expenditure benchmark of the Stability and Growth Pact in 2014 but deviates by 0,3 % and 0,5 % of GDP in 2015 and 2016 respectively, assuming improvements of 0,5 % of GDP towards the MTO judged as appropriate by the Commission. According to the Convergence Programme, the debt-to-GDP ratio is forecast to continue to increase over the programme period, albeit at a slowing pace, and to reach 51,9 % of GDP in 2016.

               (10)

               Swift and durable recovery is hindered in the Czech Republic by repeated cuts in public investment expenditure. Safeguarding growth-enhancing expenditure with a high multiplicative effect, including projects co-financed by EU funds, would not only help buttress recovery but could also contribute to tackling the long-term challenges. Substantial growth effects could follow from prioritising expenditure on measures aiming at increasing employment, research and innovation, education, childcare facilities and infrastructure projects. At the same time, ensuring legality, regularity and efficiency of such spending is the key.

               (11)

               Limited progress was made in 2012 on tax reform. While the real estate transfer tax was increased, no steps were taken to raise the very low level of recurrent property taxes. Plans to introduce a CO2 tax and abolish exemptions from excise duties on natural gas for heating have been dropped. The implicit tax rate on energy is below the EU average and vehicle circulation taxes remain very low. Structural challenges also remain in taxation of labour, in particular affecting low-income earners and part-time workers. Only marginal steps were taken to reduce discrepancies in the tax treatment of employees and the self-employed. The Czech Republic also has room to further improve the efficiency of its tax administration. As regards personal and company income taxes, the Government is planning to establish a Single Collection Point in 2015, which could effectively streamline the tax administration and help reduce the complexity of the current system. However, a drawback of the reform is that the tax bases for personal income tax, health and social contributions will not be harmonised, thereby leaving a large part of the potential benefits of the reform unexploited.

               (12)

               The Czech Republic has a sustainability gap of 5,0 % of GDP, which is above the EU average. This gap largely reflects the projected long-term cost of ageing, which is driven by the expected increases in pension expenditure and in healthcare and long-term care spending. The statutory retirement age is rising slowly in particular for men. Increasing the effective retirement age by better aligning the retirement age or pension benefits to changes in life expectancy, compared to current legislation would significantly strengthen the sustainability of the system. Complementing these changes with a review of the indexation formula basing it on prices, would generate savings when implemented over the long run.

               (13)

               Contrary to the 2012 Recommendation, the Government introduced a pre-retirement scheme in 2013, which offers the possibility of drawing a pension up to five years before reaching the statutory retirement age. The pre-retirement pensions are going to be paid from the (third) pension savings pillar. However, the pillar enjoys a substantial state subsidy through direct co-payments and tax deductibility of contributions. Irrespective of whether the eligibility criteria for gaining access to the scheme will be effectively met by only a limited number of persons, as the Government expects, the measure allows beneficiaries to use the previously accrued public subsidy for a purpose that goes against policies to promote longer working lives.

               (14)

               The expected increase in healthcare and long-term care spending also provides a substantial contribution to the cost of ageing and a large sustainability gap. Reforms aimed at improving the efficiency of the healthcare system via cost containment and more market-oriented solutions have been implemented in recent years in the Czech Republic. However, problems still exist. Compared to other Member States, the Czech healthcare system tends to be excessively centred on hospital care, which gives rise to inefficiencies. There is scope to improve the provision of care in the most clinically appropriate and cost-effective way, for example by moving to day-of-surgery admission and reducing inappropriate lengths of stay in acute care hospitals.

               (15)

               Recent projections of the Organisation for Economic Cooperation and Development (OECD) show that full convergence of the female and male employment rates would halt the projected decline of the total labour force and increase GDP per capita by as much as 16,5 % by 2030. On 22 May 2013, the Government proposed a draft Act to introduce ‘child groups’ led by professional nannies, accompanied by tax subsidies for care providers and participating families. This is a step in the right direction but is only a partial response to the issue. Because of a continued shortage of childcare facilities, in particular for under three year olds, there is a need for further increase of budgetary support to public pre-school childcare facilities. The employability and labour-market participation of disadvantaged people also remains a problem: there is scope for increasing the efficiency and effectiveness of public employment services.

               (16)

               The recommendation in the 2012 Recommendation on public administration specifically mentioned the need to increase the efficiency of public administration and step up the fight against corruption. However, only limited progress has been made in adopting the priority legal acts under the Czech anti-corruption strategy for 2011-2012. A new anti-corruption strategy for 2013-2014, adopted by the Government in January 2013, needs to be followed up by the urgent adoption of outstanding priority acts, such as the Public Servants Act. This new Act will need to adequately separate political appointees from non-political staff, guarantee independence of state officials and create a well-functioning career system to reduce high staff turnover. The Czech Republic has made substantial progress in implementing the Public Procurement Act, which came into force in April 2012. However, difficulties in implementing the Public Procurement Act have been reported by local authorities. As regards the implementation of EU funds, most of the measures included in the action plan to strengthen the management and control system were implemented by the end of 2012. However, the Czech authorities will need to ensure continuous monitoring of the action plan.

               (17)

               At the level of compulsory education, Czech pupils attain broadly average results in international comparisons. In mathematics and science, however, the education outcomes have worsened rapidly over time. The Czech authorities have responded with a set of measures which entails the development of minimum education standards, which are to be used for nationwide testing of pupils. However, a more integrated system should be developed, ensuring that pupils, teachers and schools that underperform in the tests receive systematic support would further raise the level of ambition of the reform. The main challenge facing the Czech higher education system is to ensure that the rising number of students is equipped with the skills needed to succeed in the labour market. A reform of the Higher Education Act is being discussed to introduce differentiated funding arrangements and enhance accreditation. These are relevant and ambitious proposals, although their actual impact will depend on the final design of the reform. The authorities also plan to adopt revised evaluation standards for funding of research institutions. Increasing the share of quality indicators, including enhancing the collaboration with the business sector, would help the Czech research and innovation system reach a higher level of excellence.

               (18)

               The Czech Republic is amongst the Member States with the highest number of regulated professions. A public consultation on the review of the regulatory framework for professions was conducted in 2012 and results are to be presented in 2013. This is an important step in order to reduce or eliminate barriers to those professions for which regulation is not proven necessary or considered excessive (including the length of mandatory traineeships) and for which an easier access could unlock further employment and growth. Despite improvements in recent years, the Czech Republic has still one of the highest energy intensities in the Union and low efficiency in buildings.

               (19)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of the Czech Republic’s economic policy. It has assessed the National Reform Programme and the Convergence Programme. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in the Czech Republic but also their compliance with EU rules and guidance, given the need to reinforce the overall economic governance of the Union by providing EU-level input into future national decisions. Its recommendations under the European Semester are reflected in recommendations (1) to (7) below.

               (20)

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

         HEREBY RECOMMENDS that the Czech Republic take action within the period 2013-2014 to:

               1.

               Implement as envisaged the budget for the year 2013 so as to correct the excessive deficit in 2013 in a sustainable manner and achieve the structural adjustment effort specified in the Council recommendations under the EDP. For the year 2014 and beyond, reinforce and rigorously implement the budgetary strategy, supported by sufficiently specified measures, in order to ensure an adequate fiscal effort to make sufficient progress towards the MTO. Prioritise growth-enhancing expenditure including committing on time remaining projects co-financed by EU funds under the current financial framework.

               2.

               Reduce the high level of taxation on labour by shifting taxation to areas less detrimental to growth, such as recurrent taxes on housing and vehicle circulation taxes. Further reduce discrepancies in the tax treatment of employees and the self-employed. Improve tax compliance and reduce compliance costs by establishing a Single Collection Point and harmonising the tax bases for personal income tax and health and social contributions.

               3.

               Increase the effective retirement age by aligning retirement age or pension benefits to changes in life expectancy, and review the indexation mechanism. Accompany the increase in retirement age with measures promoting employability of older workers and reduce early exit pathways. In particular, remove the public subsidy for the pre-retirement scheme. Take measures to significantly improve cost-effectiveness of healthcare expenditure, in particular for hospital care.

               4.

               Make additional efforts to strengthen the efficiency and effectiveness of the public employment service. Increase significantly the availability of inclusive childcare facilities with a focus on children up to three years old, and the participation of Roma children, in particular by adopting and implementing the law on provision of childcare services and strengthening the capacities of both public and private childcare services.

               5.

               Ensure implementation of the anti-corruption strategy for 2013-2014. Adopt the Public Servants Act that should ensure a stable, efficient and professional state administration service. Improve the management of EU funds in view of the 2014-2020 programming period. Strengthen the capacity for implementation of public tenders at local and regional level.

               6.

               Establish a comprehensive evaluation framework in compulsory education and take targeted measures to support schools that rank low in educational outcomes. Adopt measures to enhance accreditation and funding of higher education. Increase the share of performance-based funding of research institutions.

               7.

               Drawing on the ongoing review, proceed with a reform of regulated professions, by reducing or eliminating entry barriers and reserves of activities where they are unjustified. Take further measures to improve energy efficiency in the buildings and industry sectors.

      Done at Brussels, 9 July 2013.

            For the Council

            The President

         R. ŠADŽIUS

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Maintained for 2013 by Council Decision 2013/208/EU of 22 April 2013 on guidelines for the employment policies of the Member States (OJ L 118, 30.4.2013, p. 21).

      (3)  OJ C 219, 24.7.2012, p. 17.

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

      (5)  The general government deficit for 2012 includes the one-off deficit-increasing impact of the adoption of the Law on Financial Compensation to Churches (1,5 % of GDP).

      (6)  Under Article 9(2) of Regulation (EC) No 1466/97.


title: Commission Recommendation of  8 May 2006  on the promotion of shore-side electricity for use by ships at berth in Community ports   (Text with EEA relevance)

text:
               12.5.2006

               EN

               Official Journal of the European Union

               L 125/38

      COMMISSION RECOMMENDATION

   of 8 May 2006
   on the promotion of shore-side electricity for use by ships at berth in Community ports
   (Text with EEA relevance)
   (2006/339/EC)
   THE COMMISSION OF THE EUROPEAN COMMUNITIES,
   Having regard to the Treaty establishing the European Community, and in particular Article 211 thereof,
   Whereas:

               (1)

               In November 2002 the Commission adopted a Communication to the European Parliament and the Council on a European Union strategy to reduce atmospheric emissions from seagoing ships (1), which urged port authorities to require, incentivise or facilitate ships’ use of land-based electricity while in port.

               (2)

               The European Parliament, in its resolution on the strategy of 4 December 2003 (2), pointed out that the use of land-based electricity in port could be facilitated by the production of a report describing positive examples of these measures, as well as their costs and benefits.

               (3)

               The Council, in its Conclusions on the strategy of 22 December 2003 (3), recognised that not all environmental problems are properly addressed at international level and that, in particular, the contribution of seagoing ships to the concentration of particulate matter and of ozone and its precursors in ambient air needed further consideration.

               (4)

               The Commission, in the context of its Communication ‘The Clean Air for Europe (CAFE) programme: Towards a thematic strategy for air quality’ (4), re-examined the contribution of shipping to the concentration of air pollutants in ambient air and found it to be significant, particularly in port areas. In some port areas, the attainment of air quality standards may be jeopardised by ship emissions.

               (5)

               CAFE found that reducing ship emissions is increasingly cost-effective compared to further measures in other sectors. Most ship pollutant emissions at berth can only be reduced through engine and after-treatment measures or through the use of shore-side electricity.

               (6)

               Ship engine emissions are regulated at international level through the International Maritime Organisation (IMO). The evolution of these standards is insufficient to respond to port air quality problems in the Community.

               (7)

               Article 4b of Council Directive 1999/32/EC of 26 April 1999 relating to a reduction in the sulphur content of certain liquid fuels and amending Directive 93/12/EEC (5) as regards the sulphur content of marine fuels, exempts ships which switch off all engines and use shore-side electricity while at berth in ports from the requirement to use 0,1 % sulphur marine fuel.

               (8)

               Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (6) permits Member States to apply total or partial exemptions or reductions in the level of taxation to electricity under certain conditions,

         HEREBY RECOMMENDS:

               1.

               Member States should consider the installation of shore-side electricity for use by ships at berth in ports; particularly in ports where air quality limit values are exceeded or where public concern is expressed about high levels of noise nuisance, and especially in berths situated near residential areas.

               2.

               Member States should take note of the advice, set out in the Annex, on the cost-effectiveness and practicality of using shore-side electricity to reduce emissions for different types of ships, routes and ports. Nevertheless, the environmental benefits and cost-effectiveness should be evaluated on a case by case basis.

               3.

               Member States should work within the International Maritime Organization (IMO), in the context of the ongoing review of the International Convention for the Prevention of Pollution from Ships (MARPOL Convention), to promote the development of harmonised international standards for shore-side electrical connections, taking into account ongoing work.

               4.

               Member States should consider offering economic incentives to operators to use shore-side electricity provided to ships, taking advantage of the possibilities set out in Community legislation.

               5.

               Member States should promote awareness of shore-side electricity among local authorities whose responsibility includes port areas, maritime authorities, port authorities, classification societies and industry associations.

               6.

               Member States should encourage port authorities and industry to exchange best practice concerning shore-side electricity supply and harmonising procedures for this service.

               7.

               Member States should report to the Commission on the action they intend to take to reduce ship emissions in ports, particularly where air quality limit values are exceeded.

      Done at Brussels, 8 May 2006.

            For the Commission

         Stavros DIMAS

            Member of the Commission

      (1)  COM(2002) 595 final.

      (2)  OJ C 89 E, 14.4.2004, p. 107.

      (3)  OJ C 8, 13.1.2004, p. 3.

      (4)  COM(2001) 245 final.

      (5)  OJ L 121, 11.5.1999, p. 13. Directive as last amended by Directive 2005/33/EC of the European Parliament and of the Council (OJ L 191, 22.7.2005, p. 59).

      (6)  OJ L 283, 31.10.2003, p. 51. Directive as last amended by Directive 2004/75/EC (OJ L 157, 30.4.2004, p. 100, corrected by OJ L 195, 2.6.2004, p. 31).

      ANNEX
      SHORE-SIDE ELECTRICITY SUMMARY ADVICE
      This Annex provides pertinent information on the costs and benefits of shore-side electricity. More detailed information is contained in the recent report for the Commission, Service Contract on ship emissions assignment, abatement and market-based instruments: Shore-side electricity (1). The emissions and cost figures here are for seagoing ships, but the technique is also well suited to inland vessels.
      1.   Technical requirements — typical configuration
      The diagram below illustrates typical requirements for a shore-side electricity connection. Other configurations are possible, depending on the ship and berth. The International Electrical Commission and International Association of Classification Societies are currently working on industry standards, which can, in the future, be considered by the IMO.

                  1.

                  A connection to the national grid carrying 20-100 kV electricity from a local substation, where it is transformed to 6-20 kV.

                  2.

                  Cables to deliver the 6-20 kV power from the sub-station to the port terminal.

                  3.

                  Power conversion, where necessary. (Electricity supply in the Community generally has a frequency of 50 Hz. A ship designed for 60 Hz electricity might be able to use 50 Hz electricity for some equipment, such as domestic lighting and heating, but not for motor driven equipment such as pumps, winches and cranes. Therefore, a ship using 60 Hz electricity would require 50 Hz electricity to be converted to 60 Hz).

                  4.

                  Cables to distribute electricity to the terminal. These might be installed underground within existing or new conduits.

                  5.

                  A cable reel system, to avoid handling of high voltage cables. This might be built on the berth supporting a cable reel, davit and frame. The davit and frame could be used to raise and lower the cables to the vessel. The cable reel and frame could be electro-mechanically powered and controlled.

                  6.

                  A socket onboard the vessel for the connecting cable.

                  7.

                  A transformer on board the vessel to transform the high voltage electricity to 400 V.

                  8.

                  The electricity is distributed around the ship, and the auxiliary engines switched off.

            2.   Benefits — emissions reductions
      Shore-side electricity is a tool that can be used to achieve local air quality improvements. The benefits from its use vary greatly depending on a range of factors. The Impact Assessment accompanying this Recommendation provides an illustration of the benefits that could be achieved through a larger use of this tool within the EU. Before proceeding with individual installations it will be necessary to perform an analysis of the costs and benefits for the specific circumstances.
      The Impact Assessment illustrates the reduction in air pollutant emissions for 500 berths assuming medium-sized engines. One important factor influencing the benefits is the sulphur content of the fuel. Community law sets tighter limits on the content of sulphur in fuel used at berth in most conditions from 2010. Therefore illustrations are provided for fuel sulphur content of 2,7 and 0,1 %. It is shown that the use of shore-side electricity would realise total monetised benefits in a range of between EUR 252 and 708 million per annum where 2,7 % sulphur fuel would have been used and between EUR 103 and 284 million per annum where 0,1 % sulphur fuel would have been used. These reflect improved human health and reduced material damage as a result of reductions in air pollutant emissions (2).
      Switching to shore-side electricity will also result in other benefits that are not included in these figures. It will reduce carbon dioxide (CO2) emissions by over 50 %, carbon monoxide (CO) emissions by about 99 %, and nitrous oxide emissions (N20) by over 50 %. It will eliminate vibrations and noise from auxiliary engines, which has been measured at 90-120 dB in close proximity and improve maintenance conditions for the ships’ engineers.
      3.   Costs — capital expenditure and operating costs
      The costs of installing and using shore-side electricity are split between the port and the ship, and will vary significantly depending on existing infrastructure, particularly on the port side. The Impact Assessment provides indicative calculations of the total annualised system costs for an average berth and for new and retrofit vessels with different auxiliary engine sizes. The results are shown in table 1.
      It can be seen that overall costs are much lower for ships with larger auxiliary engines, which are also likely to result in the greatest pollutant emission reduction. Costs are also much lower where shore-side electricity is installed in newly built ships as opposed to retrofitting. Fuel and electricity costs are a very significant factor in the cost to ships. Fuel costs vary, but lower sulphur fuel will be more expensive than higher sulphur fuel. Lowering taxation on electricity supplied to ships at berth increases the attractiveness of shore-side electricity.
      Table 1

                  SHIP TYPE
                  Auxiliary engine size

                  Annualised total system costs

                  with tax
                  low fuel price

                  no tax
                  high fuel price

                  (EUR/berth/year)

                  (EUR/berth/year)

                  NEWBUILD

                  Small

                  164 659

                  82 315

                  Medium

                  269 416

                  39 904

                  Large

                  521 630

                  –72 298

                  RETROFIT

                  Small

                  202 783

                  120 439

                  Medium

                  324 402

                  94 890

                  Large

                  617 999

                  24 071

            4.   Comparison of benefits and costs
      The annual monetised benefits of reducing the four pollutants at 500 berths are estimated to be between EUR 103 and 284 million where 0,1 % sulphur fuel would have been used and between EUR 252 and 708 million where 2,7 % sulphur fuel would have been used. The range of values depends on various methodological factors including the assumed value of statistical life. For more detail see the Thematic Strategy on Air Pollution (3) impact assessment.
      The annualised total system costs per berth set out in table 1 depend on three factors: the size of the ships’ engines, whether the technology is introduced to a new or an old ship and on electricity and marine fuel costs. The Impact Assessment shows that the cost of ships using shore-side electricity at 500 berths is estimated to be EUR 185 million more annually than ships using marine fuel, in a scenario with a low marine fuel price and full electricity tax paid by vessels. In a scenario with a higher fuel price and electricity tax were fully exempt, the total cost would reduce by 80 % to about EUR 34 million per annum.
      These figures show that for many situations the benefits of shore-side electricity outweigh the costs. In many case the benefits are a large multiple of the costs.
      5.   Conclusion
      The benefits and costs of shore-side electricity vary significantly depending on the existing configuration and location of the port, berth and ship. This means that its cost-effectiveness needs to be studied on a case-by-case basis, and that direct reduction of marine engine emissions should continue to be pursued.
      In environmental terms, shore-side electricity achieves emission reductions well beyond those achieved from switching to 0,1 % sulphur fuel at berth (as Directive 2005/33/EC requires from 2010), particularly for NOx and PM. It therefore merits particular consideration in ports where ship NOx and PM emissions are contributing to local air quality problems, such as exceedances of ambient air quality limit values for ozone and particles.
      In general the figures suggest that for ships with larger engines regularly visiting the same port, switching to shore-side electricity should be both environmentally and economically preferable to using 0,1 % sulphur fuel. In economic terms, shore-side electricity should generate savings compared to low sulphur fuel for new-build ships regularly visiting the same ports, especially, but not only, if electricity tax reductions are offered as allowed under Directive 2003/96/EC. Member States and local authorities might wish to consider other means to encourage ports to invest in shore-side electricity infrastructure and to ensure its use.

         (1)  See: http://www.europa.eu.int/comm/environment/air/pdf/task2_shore-side.pdf

         (2)  See http://europa.eu.int/comm/environment/air/cafe/activities/pdf/cafe_cba_externalities.pdf (page 4). Values are national averages (urban and rural combined) so benefits may be higher in city centre ports.

         (3)  SEC(2005) 1133.


Avis juridique important

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31995K0393

Commission Recommendation No 393/95/ECSC of 24 February 1995 amending Commission Recommendation No 3118/94/ECSC (Text with EEA relevance)

Official Journal L 043 , 25/02/1995 P. 0023 - 0038

COMMISSION RECOMMENDATION No 393/95/ECSC of 24 February 1995 amending Commission Recommendation No 3118/94/ECSC (Text with EEA relevance)THE COMMISSION OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 74 thereof,  Whereas it is necessary, in accordance with Article 3 of Recommendation No 3118/94/ECSC (1), whereby the Commission made imports into the Community of certain iron and steel products covered by the Treaty establishing the European Coal and Steel  Community subject to Community surveillance, to list those countries and the products for which export licences shall be required in an Annex to that Recommendation;  Whereas, pursuant to Commission Recommendation No 73/95/ECSC (2), an export licence and certificate of origin are to be issued by the competent Russian and Ukrainian authorities or organizations in relation to the double-checking system applicable to  the import into the Community of certain steel products originating in those countries and whereas it is appropriate to publish models of these export documents for the information of economic operators;  Whereas pending the entry into force of the Decisions of the EC-Republic of Bulgaria Joint Committee and the EC-Romania Joint Committee as well as of the corresponding Commission Decisions establishing a double-checking system for the import into the  Community of the steel products covered by these Decisions, the Republic of Bulgaria, Romania and the Community have agreed that an export licence issued by the competent Bulgarian and Romanian authorities will be required for the import into the  Community of the steel products covered by these Decisions with effect from 1 March 1995;  Whereas, following consultations with the Swiss authorities, it is necessary to amend Article 1 of Recommendation No 3118/94/ECSC to exclude from the scope of the Recommendation the countries of the European Free Trade Association (EFTA),  MAKES THE FOLLOWING RECOMMENDATION:   Article 1  Annex I, which contains models of the export licence and certificate of origin to be issued by the competent Russian and Ukrainian authorities or organizations in relation to the double-checking system applicable to the import into the  Community of certain steel products originating in those countries, shall be added as Annex V to Recommendation 3118/94/ECSC.   Article 2  1. Annex II, which contains a further list of the countries and products in respect of which export licences shall be required, shall be added as Annex VI to Commission Recommendation 3118/94/ECSC.  2. Annex III, which contains models of the export licence to be issued by the competent authorities listed in Annex VI, shall be added as Annex VII to Commission Recommendation 3118/94/ECSC.   Article 3  Article 1 (1) of Commission Recommendation No 3118/94/ECSC is hereby amended by the addition, after the words '. . . originating in non-member countries other than', of the words 'the countries of the European Free Trade Association (EFTA)  or'.   Article 4  This Recommendation shall enter into force on the day following its publication in the Official Journal of the European Communities.  Done at Brussels, 24 February 1995.  For the Commission Leon BRITTAN Vice-President  (1) OJ No L 330, 21. 12. 1994, p. 6.  (2) OJ No L 13, 19. 1. 1995, p. 1.      ANNEX I 'ANNEX V   ANNEX II 'ANNEX VI Products originating in the Republic of Bulgaria and Romania requiring export licences ECSC products listed in Annex I of Recommendation No 3118/94/ECSC originating in the Republic of Bulgaria or Romania'    ANNEX III 'ANNEX VII


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		52013DC0365

			Recommendation for a COUNCIL RECOMMENDATION on Lithuania’s 2013 national reform programme and delivering a Council opinion on Lithuania’s convergence programme for 2012-2016 /* COM/2013/0365 final - 2013/ () */

Recommendation for a
COUNCIL RECOMMENDATION
on Lithuania’s 2013 national reform
programme
and delivering a Council opinion on Lithuania’s convergence programme for
2012-2016
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning
of the European Union, and in particular Articles 121(2) and 148(4) thereof,
Having regard to Council Regulation (EC) No
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary
positions and the surveillance and coordination of economic policies[1], and in particular Article 9(2)
thereof,
Having regard to the recommendations of the
European Commission[2],
Having regard to the resolutions of the
European Parliament[3],
Having regard to the conclusions of the
European Council,
Having regard to the opinion of the
Employment Committee,
After consulting the Economic and Financial
Committee,
Whereas:
(1)       On 26 March 2010, the
European Council agreed to the Commission’s proposal to launch a new strategy
for growth and jobs, Europe 2020, based on enhanced coordination of economic
policies, which will focus on the key areas where action is needed to boost Europe’s potential for sustainable growth and competitiveness.
(2)       On 13 July 2010, on the
basis of the Commission's proposals, the Council adopted a recommendation on
the broad guidelines for the economic policies of the Member States and the
Union (2010 to 2014) and, on 21 October 2010, adopted a decision on guidelines
for the employment policies of the Member States[4],
which together form the ‘integrated guidelines’. Member States were invited to
take the integrated guidelines into account in their national economic and
employment policies.
(3)       On 29 June 2012, the Heads
of State or Government decided on a Compact for Growth and Jobs, providing a
coherent framework for action at national, EU and euro area levels using all
possible levers, instruments and policies. They decided on action to be taken
at the level of the Member States, in particular expressing full commitment to
achieving the objectives of the Europe 2020 Strategy and to implementing the
country-specific recommendations.
(4)       On 6 July 2012, the
Council adopted a recommendation on Lithuania’s national reform programme for
2012 and delivered its opinion on Lithuania’s updated convergence programme for
2011-2015.
(5)       On 28 November 2012, the
Commission adopted the Annual Growth Survey[5],
marking the start of the 2013 European Semester of economic policy
coordination. Also on 28 November 2012, the Commission, on the basis of
Regulation (EU) No 1176/2011, adopted the Alert Mechanism Report[6], in which it did not identify Lithuania as one of the Member States for which an in-depth review would be carried out.
(6)       On 14 March 2013, the
European Council endorsed the priorities for ensuring financial stability,
fiscal consolidation and action to foster growth. It underscored the need to
pursue differentiated, growth-friendly fiscal consolidation, to restore normal
lending conditions to the economy, to promote growth and competitiveness, to
tackle unemployment and the social consequences of the crisis, and to modernise
public administration.
(7)       On 9 April 2013, Lithuania submitted its updated 2013 national reform programme and, on 26 April 2013, its
convergence programme covering the period 2012-2016. In order to take account
of their interlinkages, the two programmes have been assessed at the same time.
(8)       Based on the assessment of
the 2013 convergence programme pursuant to Council Regulation (EC) No 1466/97,
the Council is of the opinion that the macroeconomic scenario underpinning
the budgetary projections in the programme is plausible and broadly in line
with the assessment in the Commission's spring forecast. Following an ambitious
fiscal consolidation since 2009, the general government deficit has been
brought to 3.2% of GDP in 2012, which is considered sufficient for abrogation
of the decision on the existence of an excessive deficit, taking into account
the cost of the systemic pension reform. The deficit reduction was to some
extent also based on robust economic growth and temporary expenditure freezes. The
programme has changed the medium-term objective (MTO) from +0.5% to ‑1.0%,
which is still in line with the objectives of the Stability and Growth Pact.
The budgetary strategy outlined in the programme aims to reach the MTO by 2016.
Based on the (recalculated) structural budget balance, annual progress towards
the MTO in structural terms is higher than 0.5% of GDP. The expenditure
benchmark over the programme period is met. The adjustment is slightly
front-loaded and relies mainly on expenditure restraint, but is only partially
supported by concrete measures, including one-offs that are not always
specified. According to the Commission's forecast, the structural adjustment in
2013 and 2014 is expected to be at 0.3% and 0.0% of GDP respectively and thus
below the required progress of 0.5% of GDP, which also casts doubt on the
programme's adjustment path. Further consolidation measures have yet to be specified, and structural reforms including a
shift to revenue based measures, should be considered. General government debt
remains below 60% of GDP with 40.7% in 2012 and is expected to drop slightly
over the programme period. While the convergence programme expects debt to ease
to 39.7% in 2013 and to decline further to 34.5% by 2016, the Commission's
forecast projects it to drop to 40.1% of GDP in 2013 and 39.4% in 2014.
Differences are above all the result of lower assumed deficits in the
convergence programme.
(9)       Although its deficit
position has improved over the years, Lithuania still lacks sufficient fiscal
space to react to adverse shocks. There is, however, scope for a
less-distortive taxation and further improvements in tax compliance. Lithuania continues to have the lowest tax-to-GDP ratio in the EU and consolidation has
mainly been focused on the expenditure side. There is still scope to look at
additional tax revenue sources that are least detrimental to growth, such as
environmental and recurrent immovable property taxation. While Lithuania has taken steps to increase recurrent property tax revenue, there seems to be
scope for further effort. Lithuania's revenues from environmental taxes are on
a downward trend and were the second lowest in the EU in 2011, also due to the
lowest level of transport taxes in the EU; this does not facilitate reductions
in the high energy intensity of the Lithuanian economy. At the same time,
growth-enhancing expenditure, for example on research and education, should be
prioritised in fiscal consolidation. The implementation of laws strengthening
the fiscal framework has been delayed. Lithuania’s fiscal framework has failed
to prevent pro-cyclical fiscal policy in years of high growth, and the rules
are not sufficiently binding. There is a need to improve monitoring,
accountability and execution of the budgetary process, and reinforce the
binding character of the medium-term framework.
(10)     Demographic developments are
a challenge for Lithuania’s long-term fiscal sustainability. A comprehensive
pension reform, targeting both sustainability and adequacy of pensions,
therefore remains important. Adequacy of pensions is a challenge as the older
population is at a high risk of poverty and exclusion. The
2012 reform of the pension accumulation system encourages
2nd pillar pension accumulation with financial incentives from the
state budget. It also introduces the possibility to opt out from private pension accumulation and return to the state social insurance fund
during a transitional period as well as a gradual increase
of retirement age. The reform will enter into force as
of 1 January 2014. These are important but isolated steps in the right
direction and more significant changes are needed, particularly
within the 1st pension pillar. In addition, measures that promote
the employability of older workers and age friendly working environments are
necessary.
(11)     Tackling unemployment and
low labour force participation remains a key challenge. Young and unskilled
workers in particular suffer from high unemployment rates. Skill mismatches
became especially evident during the crisis and represent a growing problem,
hinting at structural shortcomings in education and labour market policies.
Ensuing shortages of skilled labour are compounded by high emigration rates. Hence,
additional measures to improve labour market flexibility and to boost
participation in the labour market, especially for young people, unskilled
persons and older workers are necessary. The overall coverage of active labour
market measures and the financial allocation per individual measure remain
insufficient and measures are poorly targeted for low skilled and long term
unemployed. A comprehensive review of labour law, with the involvement of
social partners, could identify unnecessary restrictions and administrative
hurdles affecting flexible contractual agreements, dismissal provisions and
flexible working time arrangements. To ensure a better transfer from education
to the labour market, apprenticeships and internships could be made more
attractive.
(12)     Poverty and social
exclusion are still worryingly high. In particular, the increase in child
poverty is of concern. Cash social assistance reform measures designed to
increase work incentives (in-work benefits for the long-term unemployed,
gradual reduction of social benefits for people of working age who are inactive)
and reduce poverty were launched in 2012. A pilot project in five
municipalities delivered impressive results on saving expenditure and better
targeting beneficiaries. It is now necessary to put in place a monitoring
system to assess its efficiency and impact on tackling poverty and exclusion.
The reform should also be linked with activation measures that enhance
participation, in particular for long-term social beneficiaries. Measures taken
to reduce poverty include increased coverage of social benefits and a new
method for calculating the benefit amounts. Moreover, on 1 January 2013 the
minimum wage increased by 18 %, which might help reduce the inactivity
trap and in-work poverty. However, these measures appear insufficient given the
size of the challenge and a comprehensive strategy or action plan to fight
poverty is lacking.
(13)     The government has been
undertaking an ambitious reform of state-owned enterprises (SOEs) since 2010.
The reform is relevant and credible, involving legislative as well as
organisational changes. The regulatory aspects of the reform have been put in
place and broad compliance with reporting requirements has been achieved. The
challenge now is to avoid conflicts of interest, with respect to regulatory and
non-regulatory functions, and to distinguish between commercial and
non-commercial activities of SOEs. Once fully implemented, the reform could
help to boost competitiveness and growth. Monitoring of compliance will
therefore be key.
(14)     Electricity and gas links to neighbours remain underdeveloped. As a
result, competition in the energy sector is very limited and energy prices are
high. Furthermore, energy efficiency continues to be an issue. Progress has been
sluggish as regards the renovation of buildings, including with respect to
investments under the JESSICA holding fund, and major challenges in the
renovation of private housing remain.
(15)     In the context of the
European Semester, the Commission has carried out a comprehensive analysis of Lithuania’s economic policy. It has assessed the convergence programme and national reform
programme. It has taken into account not only their relevance for sustainable
fiscal and socio-economic policy in Lithuania but also their compliance with EU
rules and guidance, given the need to reinforce the overall economic governance
of the European Union by providing EU-level input into future national
decisions. Its recommendations under the European Semester are reflected in
recommendations (1) to (6) below.
(16)     In the light of this
assessment, the Council has examined Lithuania’s convergence programme, and its
opinion[7]
is reflected in particular in recommendation (1) below,
HEREBY RECOMMENDS that Lithuania should take action within the period 2013-2014 to:
1.           Ensure growth friendly
fiscal consolidation and implement the budgetary strategy as planned, pursuing
a structural adjustment effort that will enable Lithuania to reach the
medium-term objective. Prioritise growth-enhancing expenditure. Strengthen the
fiscal framework, in particular by introducing enforceable and binding
expenditure ceilings in the medium-term budgetary framework. Review the tax
system and consider increasing those taxes that are least detrimental to growth,
such as recurrent property and environmental taxation, including introducing
car taxation, while continuing to reinforce tax compliance.
2.           Adopt and implement
legislation on a comprehensive pension system reform. Align the statutory
retirement age with life expectancy, restrict access to early retirement, establish
clear rules for the indexation of pensions, and promote the use of complementary
savings schemes while ensuring implementation of ongoing reforms. Underpin
pension reform with measures that promote the employability of older workers.
3.           Tackle high unemployment amongst
low-skilled and long-term by refocusing resources on active labour market
policies while improving their coverage and efficiency. Improve the
employability of young people, for example through a Youth Guarantee, enhance
the implementation and effectiveness of apprenticeship schemes, and address
persistent skill mismatches. Review the appropriateness of labour legislation
with regard to flexible contract agreements, dismissal provisions and flexible
working time arrangements, in consultation with social partners.
4.           Implement concrete
targeted measures to reduce poverty and social exclusion. Strengthen the links
between the cash social assistance reform and activation measures.
5.           Complete the
implementation of the reform of the State-Owned Enterprises, in particular to
ensure separation of ownership and regulatory functions, and closely monitor
compliance with the requirements of the reform.
6.           Step up measures to
improve the energy efficiency of buildings, including through removing
disincentives and rapid implementation of the holding fund. Promote competition
in energy networks by improving interconnectivity with other Member States for
both electricity and gas.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 2.8.1997, p. 1.
[2]               COM(2013) 365 final.
[3]               P7_TA(2013)0052 and P7_TA(2013)0053.
[4]               2013/208/EU of 22 April 2013
[5]               COM(2012) 750 final.
[6]               COM(2012) 751 final.
[7]               Under Article 9(2) of Council Regulation (EC) No
1466/97.


Avis juridique important

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31998Y0617(01)

Council Recommendation of 28 May 1998 on the provision of forgery detection equipment at ports of entry to the European Union

Official Journal C 189 , 17/06/1998 P. 0019 - 0020

COUNCIL RECOMMENDATION of 28 May 1998 on the provision of forgery detection equipment at ports of entry to the European Union (98/C 189/02)THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty on European Union, and in particular Article K.3(2), point (a) thereof,Having regard to the initiative presented by the United Kingdom,Whereas it is important to establish uniform levels of expertise and equipment for detecting forged documents at points of entry to the European Union,HEREBY RECOMMENDS TO THE GOVERNMENTS OF THE MEMBER STATES:to take the following steps to ensure uniform levels of equipment at ports of entry:1. Determining factorsThe equipment to be made available at points of entry should be determined by reference to the following factors:- amounts of passenger traffic,- current levels of abuse,- availability of reference material,- presence of control officers and standards of training provided.2. Recommended levels of provision(a) MINIMUM level: small entry points, or those not permanently manned, using staff trained only to a basic standard.Equipment required:Ultra-violet light source- fixed, for office use,- portable, for mobile use, e. g. on board trains, coaches, etc.;Magnification- Hand-held lenses,- large illuminated bench magnifying glass;Reference material- Manual of genuine EU documents,- European fraud bulletin;(b) INTERMEDIATE level: small to medium-sized entry points permanently manned by staff with basic training and the additional presence or availability of a document specialist trained to an intermediate standard.Equipment required:Ultra-violet light source- fixed, on each control desk and for office use,- portable, for mobile use, e. g. on board trains, coaches, etc.;Magnification- low power stereozoom microscope,- light source with flexible fibre-optic light guide,- light box;Reference material- manual of genuine EU documents,- European fraud bulletin;(c) UPPER level: permanently manned entry points encountering high levels of document abuse, staffed by a variety of trained personnel and document specialists.Equipment required:Ultra-violet light source- fixed, on each control desk and for office use,- portable, for mobile use, e. g. on board trains, coaches, etc.;Magnification- low power stereozoom microscope,- light source with flexible fibre-optic light guide,- light box;Infra-red scanning equipment- infra-red document examination apparatus;Reference material- manual of genuine EU documents,- European fraud bulletin.Done at Brussels, 28 May 1998.For the CouncilThe PresidentJ. STRAW