               EUROPEAN COMMISSION
            Brussels, 5.6.2019
            COM(2019) 525 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2019 National Reform Programme of Slovakia and delivering a Council opinion on the 2019 Stability Programme of Slovakia

               Recommendation for a

               COUNCIL RECOMMENDATION

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

               THE COUNCIL OF THE EUROPEAN UNION,

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

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

               Having regard to the recommendation of the European Commission,

               Having regard to the resolutions of the European Parliament,

               Having regard to the conclusions of the European Council,

               Having regard to the opinion of the Employment Committee,

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

               Having regard to the opinion of the Social Protection Committee,

               Having regard to the opinion of the Economic Policy Committee,

               Whereas:

               (1)On 21 November 2018, the Commission adopted the Annual Growth Survey, marking the start of the 2019 European Semester for economic policy coordination. It took due account of the European Pillar of Social Rights, proclaimed by the European Parliament, the Council and the Commission on 17 November 2017. The priorities of the Annual Growth Survey were endorsed by the European Council on 21 March 2019. On 21 November 2018, on the basis of Regulation (EU) No 1176/2011, the Commission also adopted the Alert Mechanism Report, in which it did not identify Slovakia as one of the Member States for which an in-depth review would be carried out. On the same date, the Commission also adopted a recommendation for a Council recommendation on the economic policy of the euro area, which was endorsed by the European Council on 21 March 2019. On 9 April 2019, the Council adopted the recommendation on the economic policy of the euro area (‘Recommendation for the euro area’).

               (2)As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Slovakia should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (2) to (4) below. In particular, measures to tackle corruption and improving the justice system will help address the first euro area recommendation as regards quality of institutions, focusing economic policy related to investment in the specified areas will help address the second euro area recommendation as regards supporting investment, and measures to improve skills will help address the third euro area recommendation as regards functioning of the labour market.

               (3)The 2019 country report for Slovakia
                  2
                was published on 27 February 2019. It assessed Slovakia’s progress in addressing the country-specific recommendations adopted by the Council on 13 July 2018, the follow-up given to the recommendations adopted in previous years and Slovakia's progress towards its national Europe 2020 targets.

               (4)On 25 April 2019, Slovakia submitted its 2019 National Reform Programme and its 2019 Stability Programme. 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
                  3
               , where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking the effectiveness of the ESI Funds to sound economic governance
                  4
               .

               (6)Slovakia is currently in the preventive arm of the Stability and Growth Pact. In its 2019 Stability Programme, the government expects the headline balance to improve from a deficit of 0.7% of GDP in 2018 to a balanced budget in 2019 and to remain unchanged out to 2022. Based on the recalculated structural balance
                  5
               , the medium-term budgetary objective – which has been changed from a structural deficit of 0.5% of GDP in 2019 to 1% of GDP as of 2020 – is planned to be achieved in 2020. According to the 2019 Stability Programme, the general government debt-to-GDP ratio is expected to gradually decline from 47.5% in 2019 to 44.4% by 2022. The macroeconomic scenario underpinning those budgetary projections is plausible. At the same time, the measures needed to support the planned deficit targets from 2019 onwards have not been fully specified. The budget includes a non-specified category of expenditure called budgetary reserves (totalling 0.7% of GDP), which reduces predictability in budget implementation.

               (7)On 13 July 2018, the Council recommended Slovakia to ensure that the nominal growth rate of net primary government expenditure
                  6
                does not exceed 4.1% in 2019, corresponding to an annual structural adjustment of 0.5% of GDP. In view of the Commission autumn 2018 forecast, which projected a closer position to the medium term objective in 2019, and consistent with the rules for unfreezing the required adjustment, the nominal growth rate of net primary government expenditure should not exceed 4.6%, corresponding to an annual structural adjustment of 0.3% in 2019. Based on the Commission 2019 spring forecast, there is a risk of significant deviation from the recommended fiscal adjustment over 2018 and 2019 taken together.

               (8)In 2020, Slovakia should achieve its medium-term budgetary objective. Based on the Commission 2019 spring forecast under unchanged policies, this is consistent with a maximum nominal growth rate of net primary government expenditure of 4.6%, corresponding to a structural adjustment of 0.3% of GDP. Based on the Commission 2019 spring forecast under unchanged policies, there is a risk of a significant deviation from that requirement over 2019 and 2020 taken together. Slovakia is forecast to comply with the debt rule in 2019 and 2020. Overall, the Council is of the opinion that the necessary measures should be taken as of 2019 to comply with the provisions of the Stability and Growth Pact.

               (9)Slovakia’s public finances face medium fiscal sustainability risks in the long term. According to the Commission’s 2018 Fiscal Sustainability Report, a cumulated improvement of 2.5 pps of GDP in the structural primary balance would be required to stabilise the debt-to-GDP ratio over the long term, relative to the no-policy-change scenario. This is due to the projected increase in pension and healthcare expenditure that is driving up ageing costs (joint contribution of 1.8 pps of GDP). As birth rates are low while life expectancy in Slovakia is expected to increase further, the old-age dependency ratio (comparing elderly people with the active population – the share of the population in work of training) is projected to almost triple by 2060. And, while in 2016 there were only about three inactive people above 65 for every ten employed persons, this is projected to rise to more than seven for every ten employed by 2060 (economic old-age dependency ratio). Introducing automatic adjustments of the retirement age to life expectancy had gradually improved the long-term sustainability of the pension system. This was seen as an important tool to ensure intergenerational fairness and long-term sustainability. Concerns over the long-term fiscal sustainability of the pension systems have heightened following the adoption by Parliament on 28 March 2019 of a constitutional amendment instituting retirement age caps (64 for men and women without children, with half a year reductions for women for each of the first three children) and scrapping the automatic adjustments linked to life expectancy. According to Slovakia’s Fiscal Council, the cap will bring an additional expenditure increase of 1.6% of GDP, from 8.6% in 2016 to 11.4% in 2070 compared to the increase to 9.8% projected in the 2018 Ageing Report. This will significantly increase sustainability risks. No counterbalancing measures have been put forward at this moment and the impact on old age income and poverty has not been calculated.

               (10)Despite some progress in fighting tax evasion, tax compliance remains a challenge and the VAT compliance gap was more than twice the EU average in 2016. While measures planned under the Third Action Plan are expected to bring positive results, some of them are still pending implementation. For instance, the introduction of electronic tax returns is likely to reduce the administrative burden on taxpayers, but a failure to implement all planned measures risks diminishing the overall effect. At the same time, a structured framework of policy measures can help to reduce frequent changes in the tax code and encourage its simplification. Finally, the revenue potential of environmental and property taxation is underused relative to other EU countries.

               (11)Positive developments in the labour market continue, marked by increasing employment and historically low levels of unemployment. There has been good progress in implementing the Action plan for the long-term unemployed, which has helped reduce the number of long-term unemployed by one third over two years. Nevertheless, the long-term unemployment rate remains above the EU average, affecting in particular low-skilled people, young people and Roma. In contrast to falling unemployment rates, reports of skilled labour shortages have become a major issue. Severe regional disparities in the labour market continue to be observed, with higher unemployment concentrated in three regions of eastern Slovakia and labour shortages concentrated in the western part of the country. Continued capacity building for employers and trade unions is needed to promote their more active involvement.

               (12)The range and effectiveness of policies to improve employability is limited. Training and requalification programmes have been strengthened, but are still insufficient and do not target fully the long-term unemployed and disadvantaged groups. The education system does not sufficiently contribute to socio-economic development and is under-funded at all levels. The low quality of educational results, the participation of Roma in inclusive mainstream education as of early childhood and the effective integration of pupils from socio-economically disadvantaged backgrounds in education and training (given the increasing early school leaving rate) are pressing challenges. Educational results and the level of basic skills remain weak by international standards, strongly affected by the pupils' socioeconomic background. Ensuring the Slovak population is equipped with better sets of skills for a changing economy and society is a challenge. Despite progressive salary increases until 2020, the teaching profession remains unattractive and faces increasing shortages. In addition, the quality and relevance of initial training and opportunities for professional development of teachers are limited. Current measures to foster equity and inclusive education have so far fallen short of expectations, and no real progress on desegregation of Roma students was observed. The government has adopted the "National reform plan for education and upbringing" (2018–27) and the first Action Plan (2018-19) (together with an estimated budget), as well as new legislation on quality assurance in higher education. It will be crucial that these measures are effectively implemented and monitored to see if they bring the expected results.

               (13)The low employment rate for women reflects the fact that long parental leave is rarely taken up by men and is further accentuated by limited access to and low availability of affordable childcare and long-term care facilities. For children under the age of three in particular, the overall enrolment rates in childcare are extremely low. The government adopted a new decision on mandatory participation in early childhood education and care as of 5 years old, with the effect as of 2020. However, further investment and encouraging attendance in childcare and pre-school facilities is needed.

               (14)Even though the share of people at risk of poverty or social exclusion is below the EU average, levels are considerably higher in a number of districts in Southern and Eastern Slovakia. A considerable bottleneck exists in access to high-quality and inclusive education, where the regional disparities translate into particularly pronounced early school leaving rates. Other bottlenecks concern access for disadvantaged groups, in particular for Roma, as well as people with disabilities and people that suffer from homelessness and housing exclusion, to healthcare, long-term care, social housing and other essential services. An integrated approach is essential in order to foster social inclusion for these groups.

               (15)Reforms aimed at improving the cost-effectiveness of the healthcare system are gaining momentum, although the degree of implementation has varied across different care areas. Policy measures carried out in the context of the health spending review achieved some positive results, mainly following a series of cost containment measures in the areas for pharmaceuticals and medical devices. However, there is still room for increasing efficiency and delivering better-value care by strategically reallocating resources between areas of care. Health service delivery remains excessively reliant on hospitals, which, despite regular debt relief, continue to accumulate debt and struggle to fund the investments required to improve efficiency and quality of care. While strengthening primary care is key to reducing avoidable use of hospital services, the low number of general practitioners and the limited scope of services offered in primary care act as a bottleneck to improving the efficiency of the health system. As the government has initiated measures to tackle health workforce shortages, it will be important to fit these efforts into a longer-term strategy aimed at gradually decentralising services from acute care, strengthening primary care and reinforcing preventive services.

               (16)A fragmented research system undermines the effectiveness of public research and development investment in raising scientific research quality and does not attract private funding. Research and innovation policy suffers from ineffective coordination among ministries and other actors, leading to delays and failures of major reforms. The suboptimal transformation process of the Slovak Academy of Sciences rasied concerns about the continuity of its operations, which led to the collapse of the whole process. A lack or failure of targeted measures, together with limited engagement by research institutions and limited research capacity, all contribute to low private research and development expenditure. Overall, business research and development remains one of the lowest in the EU and is centred on medium/high-tech manufacturing, areas dominated by multinational firms. Measures to stimulate knowledge transfer, strengthen innovative capacities in industry and improve cooperation between businesses and academia are advancing slowly.

               (17)To increase Slovakia’s productivity and maintain the convergence process, sustained investment efforts are also needed in digital and transport infrastructure, and energy efficiency. There is a need to improve basic fixed broadband and 4G coverage and take-up of ultrafast broadband. Investing into energy efficiency, in particular in the buildings sector, and environmental technology can be a source of green growth and will help preserve scarce environmental resources. In addition, to allow less developed regions to catch up and become more knowledge-based, competitive and productive, more strategic investment is needed to fill in the infrastructure gaps and to improve transport networks. Slovakia is lagging behind with regards to completing both the core road and railway network under the Trans-European Transport Network, such as in the Rhine-Danube corridor. Weaknesses in the transport network could be tackled by enhancing the interconnectivity, multimodality and interoperability of the existing public and urban transport network, and by promoting sustainable modes of transport.

               (18)A heavy administrative and regulatory burden may negatively affect investment and innovation, especially for small and medium-sized enterprises. Despite government efforts, administrative burden is not being reduced enough and the Slovak business environment is losing ground in international comparisons. Quality of legislation and lack of predictability are a concern for businesses. These challenges should be addressed by the full deployment of Slovakia's Better Regulation Strategy (RIA2020) and the strengthening of its Better Regulation Centre. The Slovak professional services sector remains highly regulated. The restrictiveness of regulation is above the weighted EU average for lawyers, patent agents, civil engineers, architects, accountants, tourist guides and estate agents.

               (19)The government is substantially reforming public procurement practices by overhauling the legal framework to simplify procedures and reduce transaction costs. A new focus on professionalisation is welcome; however, general benefits are only emerging slowly. In the context of distrust towards public institutions, public buyers need to make more effort to regain confidence from businesses, media and the public at large. This hinders the introduction of much needed novel practices. Efforts to increase the use of quality criteria need to be stepped-up to achieve better value for money and improve strategic use of public procurement.

               (20)Slovak public administration still faces inefficiencies and bottlenecks caused in particular by ineffective cooperation between government departments. The lack of capacity and strategic planning as well as administrative inefficiencies hamper a smooth delivery of ESI Funds. As a result, Slovakia lost EUR 120 million of funding from the 2014-2020 period, while distribution of funds to final beneficiaries remains low. In addition, sub-optimal preparation of projects funded by ESI funds led to delayed investment and resulted in tight deadlines for public procurement procedures, increasing the risk of irregularities.

               (21)Corruption continues to pose a challenge and there has been only limited determination to prosecute high-level corruption cases. Efforts to combat corruption are hindered by organisational and procedural weaknesses at the police and prosecutor’s level, and weak protection for whistle-blowers. Also, improving the effectiveness of the justice system, including its independence, remains a challenge. Despite some improvements in terms of efficiency and quality, concerns about the independence of the judiciary persist and the delay in the process for appointing judges to the constitutional court could affect the functioning of the justice system.

               (22)The programming of EU funds for the period 2021-2027 could help address some of the gaps identified in the recommendations, in particular in the areas covered by Annex D to the country report
                  7
               . This would allow Slovakia to make the best use of those funds in respect of the identified sectors, taking into account regional disparities. Strengthening the country’s administrative capacity for the management of these funds is an important factor for the success of this investment.

               (23)In the context of the 2019 European Semester, the Commission has carried out a comprehensive analysis of Slovakia’s economic policy and published it in the 2019 country report. It has also assessed the 2019 Stability Programme and the 2019 National Reform Programme and the follow-up given to the recommendations addressed to Slovakia in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Slovakia, 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.

               (24)In the light of this assessment, the Council has examined the 2019 Stability Programme and its opinion
                  8
                is reflected in particular in recommendation (1) below.

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

               1.Achieve the medium-term budgetary objective in 2020. Safeguard the long-term sustainability of public finances, notably that of the healthcare and pension systems.

               2.Improve the quality and inclusiveness of education at all levels and foster skills. Enhance access to affordable and quality childcare and long-term care. Promote integration of disadvantaged groups, in particular Roma.

               3.Focus investment-related economic policy on healthcare, research and innovation, transport, notably on its sustainability, digital infrastructure, energy efficiency, competitiveness of small and medium-sized enterprises, and social housing, taking into account regional disparities. Increase the use of quality-related and lifecycle cost criteria in public procurement operations.

               4.Continue to improve the effectiveness of the justice system, focussing on strengthening its independence, including on judicial appointments. Increase efforts to detect and prosecute corruption, in particular in large-scale corruption cases.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 209, 2.8.1997, p. 1.

                     (2)

                        SWD(2019) 1024 final.

                     (3)

                        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).

                     (4)

                        COM(2014) 494 final.

                     (5)

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

                     (6)

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

                     (7)

                        SWD(2019) 1024 final.

                     (8)

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


               EUROPEAN COMMISSION
            Brussels, 5.6.2019
            COM(2019) 503 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the 2019 National Reform Programme of the Czech Republic and delivering a Council opinion on the 2019 Convergence Programme of the Czech Republic

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the 2019 National Reform Programme of the Czech Republic and delivering a Council opinion on the 2019 Convergence Programme of the Czech Republic

               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 resolutions of the European Parliament,

               Having regard to the conclusions of the European Council,

               Having regard to the opinion of the Employment Committee,

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

               Having regard to the opinion of the Social Protection Committee,

               Having regard to the opinion of the Economic Policy Committee,

               Whereas:

               (1)On 21 November 2018, the Commission adopted the Annual Growth Survey, marking the start of the 2019 European Semester for economic policy coordination. It took due account of the European Pillar of Social Rights, proclaimed by the European Parliament, the Council and the Commission on 17 November 2017. The priorities of the Annual Growth Survey were endorsed by the European Council on 21 March 2019. On 21 November 2018, on the basis of Regulation (EU) No 1176/2011, the Commission also adopted the Alert Mechanism Report, in which it did not identify the Czech Republic as one of the Member States for which an in-depth review would be carried out.

               (2)The 2019 country report for the Czech Republic
                  2
                was published on 27 February 2019. It assessed the Czech Republic’s progress in addressing the country-specific recommendations adopted by the Council on 13 July 2018, the follow-up given to the recommendations adopted in previous years and the Czech Republic's progress towards its national Europe 2020 targets.

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

               (4)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
                  3
               , where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking the effectiveness of the ESI Funds to sound economic governance.
                  4

               (5)The Czech Republic is currently in the preventive arm of the Stability and Growth Pact. In its 2019 Convergence Programme, the government expects to move from a budgetary surplus of 0.3% of GDP in 2019 to a deficit of 0.2% in 2020, which is projected to gradually deteriorate to 0.5% by 2022. Based on the recalculated structural balance
                  5
               , the medium-term budgetary objective – which has been changed from a structural deficit of 1% in 2019 to 0.75% of GDP as of 2020 – continues to be overachieved throughout the programme period. According to the 2019 Convergence Programme, the general government debt-to-GDP ratio is expected to gradually decline to 29.7% in 2022. The macroeconomic scenario underpinning those budgetary projections is plausible. Risks to the achievement of budgetary targets seem broadly balanced, with expected further growth in public wages and social transfers contrasting with a small reduction in total revenues as a share of GDP. Based on the Commission 2019 spring forecast, the structural balance is forecast to deteriorate to around -0.1% of GDP in 2019 and -0.4% of GDP in 2020, remaining above the medium-term budgetary objective. Overall, the Council is of the opinion that the Czech Republic is projected to comply with the provisions of the Stability and Growth Pact in 2019 and 2020.

               (6)The Czech Republic faces medium risks for fiscal sustainability of public finances in the long term, mainly due to the costs of ageing. Pension expenditure is the main factor negatively affecting long-term sustainability, as it is expected to grow by around 2 percentage points of GDP by 2070. Long-term risks stem from unfavourable demographics combined with the capping of the statutory retirement age at 65 years. As a result, the old-age dependency ratio, comparing elderly people with the active population almost doubles, reaching approximately 50% in 2070. Recent measures improve the adequacy of pensions. Alongside a more generous indexation of pension benefits, the government increased the basic pension amount and topped up pensions for older pensioners. However, these steps are not accompanied by policies that would improve sustainability. For example, the alignment between gains in life expectancy and the statutory retirement age is not automatic. Currently, any change to the retirement age (statutory and early retirement) needs to be proposed by the government and approved by the Parliament. Such measures can also be combined with labour market policies that support longer working careers and the participation of underrepresented groups. The projected increase in age-related public expenditure on healthcare amounts to 1.1 percentage points of GDP by 2070, which also reduces long-term fiscal sustainability. In this context, further consolidation of the hospital sector and investment in primary and integrated health and social care could improve the cost-effectiveness of the healthcare system.

               (7)The Czech National Bank can set recommendatory macro-prudential mortgage lending limits, but according to the current legislation, it has limited sanctioning powers since it lacks the formal authority to enforce them. While in general the Czech banks comply with the recommendations, binding legislative limits would likely increase the level of compliance among banks, ensuring financial stability and reduced risks for borrowers. A legislative proposal, amending the Act on the Czech National Bank, is still under discussion.

               (8)Despite slight improvements, corruption remains a concern for businesses and may hinder economic activity. On the positive side, the reforms introduced in 2017, including on public procurement, are currently being implemented and some pending measures were finally adopted by the government and sent to Parliament for further discussion. These include proposals for extending the role of the Supreme Audit Office to the regions and municipalities, and on nominations to the state owned companies, an area open to conflict of interest and where regulation is essential. However, the proposals on protection of whistleblowers and on lobbying have not yet been adopted.

               (9)The Czech Republic is enjoying strong labour market performance. Employment has risen steadily over the past seven years and unemployment has fallen considerably. Nonetheless, the labour market potential of women with young children, the low-skilled and people with disabilities remains underutilised. Against the background of labour shortages, there is clear scope for increasing their labour market participation. The employment gap and the gender pay gap remain high despite recent measures that have made parental leave more flexible and increased the number of childcare facilities. The employment rate among women remains well below that of men. Low availability of affordable childcare, long parental leave entitlements, low use of flexible working arrangements and the lack of long-term care facilities still have a major impact on labour market participation. In 2017, only 6.5% of children below the age of three were in formal childcare (compared to the EU average of 34.2%). Although the low-skilled make up a small proportion of the population, their employment rate is well below that of the medium- and high-skilled. Similarly, the employment rate of people with disabilities remains low. Due to limited capacity, public employment services currently fall short of providing jobseekers with personalised, continuous support. Increasing the outreach and activation capacities of public employment services, together with effective and well-targeted active labour market policies would help boost the participation of disadvantaged groups.

               (10)Labour and demographic constraints in a manufacturing-intensive economy warrant more investment in education and training, including for employed adults, to ensure the country meets the challenges brought about by structural changes in the economy, such as future technological changes. Qualitative skills mismatches, including those due to future automation and robotisation, could arise, notably in the digital sector. The new jobs will require new competences and significant investment, particularly in higher vocational technical skills and digital skills, expected to be needed following the automation of current mechanical jobs. Although various initiatives to introduce a comprehensive skills strategy have taken place over recent years, these have not yet grown into a genuine comprehensive system.

               (11)Education outcomes continue to be strongly affected by the socioeconomic background of students. A reform to make education more inclusive was introduced in 2016 with the support of the European Social Fund. Its success will depend on the availability of sufficient and sustainable national funding, further teacher and teaching-assistant training, and an increase in public awareness of the benefits of inclusive education. While positive overall, the impact of the inclusive education reform on the participation of Roma children in mainstream education remains limited. Low investment, the limited attractiveness of the teaching profession and socio-economic inequalities are holding back the level of education attained. There is a shortage of teachers due to low job prestige, low salaries compared to other professions despite recent increases, and limited career development opportunities. The teaching profession remains relatively unattractive for talented young people. Given this, the shortages of qualified teachers combined with expected unfavourable demographic developments indicate that it could become more challenging to recruit and retain teaching staff in the future.

               (12)Despite the Czech Republic being a transit country, the completion of the European transport networks, including TEN-T corridors, is far from being finalised. Suburban transport infrastructure also remains deficient, limiting housing affordability and people’s ability to commute to work. Weak transport links are also deterring business activity, particularly in remote regions. While the process of suburbanisation is ongoing in metropolitan areas, suburban transport networks are lagging behind, particularly for rail infrastructure. The country scores low in terms of low carbon aspects, particularly the percentage of renewable energy in transport and the take-up of electric vehicles. Furthermore, the planned growth of the recharging infrastructure may not be sufficient to cater for future demand. More investment in sustainable transport could also reduce air and noise pollution, alleviating its impact on public health, especially in urban areas. Digital infrastructure is improving but the divide between urban and rural areas persists, as only 59% of rural households are covered by fast broadband networks. Upgrading older networks based on copper infrastructure along with fixed wireless access solutions will not be sufficient for achieving the 2025 connectivity objectives. To address future connectivity needs, investment is needed in very high capacity networks (i.e. optical fibre) and appropriate demand-side measures.

               (13)The energy intensity of the Czech economy remains one of the highest in the EU as energy efficiency is improving only slowly, in particular in the buildings sector. Energy intensity is the highest in the industrial and residential sectors. Improving energy efficiency is an opportunity to increase the Czech Republic’s competitiveness, by reducing energy costs for households and businesses, developing cleaner industries and moving up the value chain. Coal dominates the power sector and is the largest source of carbon emissions, posing a substantial threat to local air quality. Greenhouse gas emissions from road transport have increased strongly the last 5 years. On climate adaptation and risk prevention, proper action is lacking as regards suitable prevention, preparedness and disaster resilience.

               (14)Administrative and regulatory burden may be hampering investment. Many Czech firms see the administrative and regulatory burden as a major obstacle to investment. Fast-changing legislation and complex administrative procedures remain major obstacles to doing business. The cost of enforcing contracts, frequent changes to the tax and labour regulations and difficulty in obtaining construction permits are potentially discouraging investment in the country. The degree of administrative burden also varies substantially among the regions. Recent proposals aim to reduce the complexity of planning procedures, particularly for large infrastructure projects. Furthermore, the government is preparing to draft a new construction law by 2021, with the involvement of social partners. Responsibility for market surveillance of products is spread over various organisations, suffers from overlaps and poses challenges for efficient coordination and effective cooperation.

               (15)Whilst improving in terms of transparency and provided training, public procurement practices still lag behind in terms of competitiveness, due to the high proportion of procedures with only received bid, use of quality criteria and trust in public institutions. The vast majority of public procurement decisions continue to be based on the lowest price as the adoption of a strategic approach is still pending. There has been more emphasis on centralised procurement and on using shared expertise but their rollout is rather slow, despite their proven potential.

               (16)The Czech Republic has not yet created a fully functioning innovation ecosystem based on domestic research and development. The country remains a moderate innovator at EU level, despite an increase in research and development intensity. This performance may be linked to public investment lacking a fully coherent strategy to increase the modest research performance and improve cooperation between the private sector and academia. Productivity gains are mostly driven by large foreign companies, while domestic firms lag behind in terms of value added generation. Moreover, total factor productivity, an indicator of how efficiently capital and labour are being used in production, has been growing at a relatively slow pace. An increased focus on domestic innovation could boost productivity across the entire business spectrum, including for small and medium-sized enterprises.

               (17)The programming of EU funds for the period 2021-2027 could help address some of the gaps identified in the recommendations, in particular in the areas covered by Annex D to the country report
                  6
               . This would allow the Czech Republic to make the best use of those funds in respect of the identified sectors, taking into account regional disparities. Strengthening the country’s administrative capacity for the management of these funds is an important factor for the success of this investment.

               (18)In the context of the 2019 European Semester, the Commission has carried out a comprehensive analysis of the Czech Republic’s economic policy and published it in the 2019 country report. It has also assessed the 2019 Convergence Programme and the 2019 National Reform Programme and the follow-up given to the recommendations addressed to the Czech Republic in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in the Czech Republic, 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.

               (19)In the light of this assessment, the Council has examined the 2019 Convergence Programme and is of the opinion
                  7
                that the Czech Republic is expected to comply with the Stability and Growth Pact.

               HEREBY RECOMMENDS that the Czech Republic take action in 2019 and 2020 to:

               1.Improve long-term fiscal sustainability of the pension and health-care systems. Adopt pending anti-corruption measures.

               2.Foster the employment of women with young children, including by improving access to affordable childcare, and of disadvantaged groups. Increase the quality and inclusiveness of the education and training systems, including by fostering technical and digital skills and promoting the teaching profession.

               3.Focus investment-related economic policy on transport, notably on its sustainability, digital infrastructure, and low carbon and energy transition, including energy efficiency, taking into account regional disparities. Reduce the administrative burden on investment and enable more quality-based competition in public procurement. Remove the barriers hampering the development of a fully functioning innovation ecosystem.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 209, 2.8.1997, p. 1.

                     (2)

                        SWD(2019) 1002 final.

                     (3)

                        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).

                     (4)

                        COM(2014) 494 final.

                     (5)

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

                     (6)

                        SWD(2019) 1002 final.

                     (7)

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


               EUROPEAN COMMISSION
            Brussels, 18.6.2019
            COM(2019) 281 final
            Recommendation for a
            COUNCIL DECISION
            to authorise the Commission to open negotiations on behalf of the European Union for the conclusion of a Sustainable Fisheries Partnership Agreement and a protocol with the Republic of Seychelles
            {SWD(2019) 209 final} - {SWD(2019) 210 final}

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE PROPOSAL

               •Reasons for and objectives of the proposal

               The Commission proposes to negotiate a new Sustainable Fisheries Partnership Agreement and a new protocol with the Republic of Seychelles, which both meet the needs of the Union fleet and are in line with Regulation (EU) No1380/2013 on the Common Fisheries Policy (CFP) and the 19 March 2012 Council Conclusions on a Communication from the Commission on the External dimension of the Common Fisheries Policy.

               •Consistency with existing policy provisions in the policy area

                  The current Fisheries Partnership Agreement (FPA) between the European Union and Seychelles
                     1
                   was signed on 28 February 2007
                     2
                   and entered into force on 2 November 2007 for a duration of 6 years. The agreement is tacitly renewable, and currently applies until 1 November 2019. It is hereby proposed to negotiate a new Sustainable Fisheries Partnership Agreement in order to integrate some provisions included in Regulation (EU) No1380/2013
                     3
                  , which are not covered by the current FPA. The current 6-year Protocol
                     4
                   to the FPA entered into application on 18th January 2014 and will expire on 17th January 2020. This Protocol fixes the fishing opportunities provided to the Union fleet and the corresponding financial contribution paid by the Union and the ship-owners.

                  The annual EU public financial contribution due to Seychelles amounts to 5 000 000 EUR
                     5
                  , out of which 2 500 000 are earmarked for sectoral support.

               The FPA with Seychelles provides fishing opportunities targeting tuna and highly migratory species for EU vessels from 4 Member States (Spain, France, Italy and Portugal). The European Union has already developed a network of bilateral Sustainable Fisheries Partnership Agreements (SFPAs) in the Indian Ocean, namely with Mauritius and Madagascar.

               SFPAs contribute to promote the objectives of the CFP internationally, ensuring that Union fishing activities outside Union waters are based on the same principles and standards as those applicable under Union law and promoting the sustainable management of oceans in all its dimensions. In addition, SFPAs foster scientific cooperation between the EU and its partner, promote transparency and sustainability for a better management of fishing resources and encourage governance by supporting monitoring, control and surveillance of national and foreign fleets' activities and providing funding to fight against illegal, unreported and unregulated (IUU) fishing. SFPAs contribute also to the sustainable development of local fishing industry and to the promotion of growth and decent work linked to fishing activities. SFPAs strengthen the European Union’s position in international and regional fishing organisations: in the case of Seychelles, in particular in the Indian Ocean Tuna Commission (IOTC)
                  6
               .

               •Consistency with other Union policies

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

               2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

               •Legal basis

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

               •Subsidiarity (for non-exclusive competence)

                  Not applicable, exclusive competence.

               •Proportionality

                  The decision is proportional to the objective.

               •Choice of the instrument

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

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

               •Ex-post evaluations/fitness checks of existing legislation

                  The Commission carried out in 2019 an ex-post evaluation of the current protocol to the FPA Seychelles as well as an ex-ante evaluation of a possible renewal of the protocol. The conclusions of the evaluation are set out in a separate Staff Working Document.

                  The evaluation concluded that the EU fishing sectors are firmly interested in fishing in Seychelles and that the renewal of the Protocol is in the interest of both parties. Furthermore, the renewal of the Protocol would help strengthening monitoring, control and surveillance and would contribute to improved governance of the fisheries in the region.

                  For the EU, it is important to maintain an instrument allowing a deep sectoral cooperation with a major player in ocean governance at the sub-regional level because of the extent of its fishing area under its jurisdiction. Strengthening the relationship with Seychelles is also functional to build alliances in the framework of the IOTC. Furthermore, for the EU fleet this means maintaining access to an important fishing area for the deployment of harvesting strategies under a multi-year international legal framework. Moreover, the importance of Victoria as one of the main landing ports contributes to the relevance of the envisaged new Protocol, both for the EU fishing industry and for the partner country. For Seychelles’ authorities, the aim is to continue relations with the EU for strengthening ocean governance, benefiting from dedicated sectoral support that provides for multi-year funding opportunities.

               •Stakeholder consultations

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

               •Collection and use of expertise

                  Not applicable

               •Impact assessment

                  Not applicable

               •Regulatory fitness and simplification

                  Not applicable

               •Fundamental rights

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

               4.BUDGETARY IMPLICATIONS

               The budgetary implications connected with the new Protocol include the payment of a financial contribution to the Republic of Seychelles. The related budgetary allocations in terms of commitment and payment appropriations need to be included each year in the budget line for Sustainable Fisheries Partnership Agreements (11 03 01) as well as being compatible with the financial programming of the Multiannual Financial Framework for 2014-2020. The annual amounts for commitments and payments are established in the yearly budgetary procedure including the reserve line for protocols not entered into force in the beginning of the year.
                  7

               5.OTHER ELEMENTS

               •Implementation plans and monitoring, evaluation and reporting arrangements

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

               •Detailed explanation of the specific provisions of the proposal

                  The Commission recommends that:

                  - The Council should authorise the Commission to open and conduct negotiations for the conclusion of a new Sustainable Fisheries Partnership Agreement and a protocol with the Republic of Seychelles;

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

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

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

               Recommendation for a

               COUNCIL DECISION

               to authorise the Commission to open negotiations on behalf of the European Union for the conclusion of a Sustainable Fisheries Partnership Agreement and a protocol with the Republic of Seychelles

               THE COUNCIL OF THE EUROPEAN UNION,

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

               Having regard to the recommendation from the European Commission,

               Whereas negotiations should be opened with a view to concluding a new Sustainable Fisheries Partnership Agreement and a new protocol with the Republic of Seychelles,

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to open negotiations with the Republic of Seychelles, with a view to conclude a new Sustainable Fisheries Partnership Agreement and a new protocol with the Republic of Seychelles.

               Article 2

               The negotiations shall be conducted in consultation with the  [name of the special committee designated by the Council] and on the basis of the negotiating directives set out in the annex to this Decision.

               Article 3

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 290 of 20.10.2006, p. 2

                     (2)

                  https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2006084&DocLanguage=en

                     (3)

                        Ref. Reg. (EU) No 1380/2013, Part VI, Title II.

                     (4)

                        OJ L 4 of 9.01.2014, p. 3

                     (5)

                        For the last 4 years of the Protocol. For the 2 first years, it was 5 350 000.

                     (6)

                  https://iotc.org/
                   , intergovernmental organisation responsible for the management of tuna and tuna-like species in the Indian Ocean.

                     (7)

                        Chapter 40 (reserve line 40 02 41) in line with the MFF inter-institutional agreement ((2013/C 373/01).

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 18.6.2019
            COM(2019) 281 final
            ANNEX
            to the
            Recommendation
            for a Council decision to authorise the Commission to open negotiations on behalf of the European Union for the conclusion of a Sustainable Fisheries Partnership Agreement and a protocol with the Republic of Seychelles
            {SWD(2019) 209 final} - {SWD(2019) 210 final}

               ANNEX

               Negotiation directives

               –The objective of the negotiations is the conclusion of a Sustainable Fisheries Partnership Agreement and protocol between the European Union and the Republic of Seychelles in line with Regulation (EU) N° 1380/2013 on the Common Fisheries Policy and with the Council Conclusions of 19 March 2012 on the Commission Communication of 13 July 2011 on the external dimension of the Common Fisheries Policy.

               –The Sustainable Fisheries Partnership Agreement should therefore define the general framework, general principles and objectives that will form the basis for the partnership with the Republic of Seychelles. It should contain a clause repealing the current Fisheries Partnership Agreement between the European Community and the Republic of Seychelles
                  1
               .

               –To promote sustainable and responsible fishing while ensuring mutual benefits for the EU and the Republic of Seychelles through this new Agreement and Protocol, the Commission's negotiation objectives shall be based on the following:

               ·Ensuring access to the Republic of Seychelles' fishing zone and the necessary authorisations for vessels of the EU fleet to fish in that zone, thereby inter alia developing the network of Sustainable Fisheries Partnership Agreements available to EU operators in the Indian Ocean;

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

               ·Seeking an appropriate share of the fisheries resources, fully commensurate with the EU fleets' interests, when they also interest other foreign fleets as well as the application of the same technical conditions to all foreign fleets;

               ·Ensuring that access to fisheries is based on the historical and the expected future activity of the EU fleet in the region, in the light of the most updated and best available scientific assessments, and taking into consideration the interests of EU outermost regions;

               ·Establishing a dialogue to reinforce the sectoral policy with a view to encouraging the implementation of a responsible fisheries policy, in connection with the country's development objectives, in particular as regards the fisheries governance, the fight against illegal, unreported and unregulated fishing, control, monitoring and surveillance of fishing activities and provision of scientific advice; and fostering economic activity;

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

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

               –In particular, the protocol should define:

               ·the fishing opportunities to be granted to European Union vessels;

               ·the financial compensation and the conditions for its payment; and

               ·the mechanisms for implementing sectoral support.

                     (1)

                        OJ L 290 of 20.10.2006, p. 2


               EUROPEAN COMMISSION
            Brussels, 18.6.2019
            COM(2019) 280 final
            Recommendation for a
            COUNCIL DECISION
            to authorise the Commission to open negotiations on behalf of the European Union for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement with the Republic of Senegal
            {SWD(2019) 207 final} - {SWD(2019) 208 final}

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE RECOMMENDATION

               •Reasons for and objectives of the proposal

               The Commission proposes to negotiate a new protocol to the Sustainable Fisheries Partnership Agreement with the Republic of Senegal, which meets the needs of the Union fleet and is in line with Regulation (EU) No1380/2013 on the Common Fisheries Policy (CFP) and the 19 March 2012 Council Conclusions on a Communication from the Commission on the External dimension of the Common Fisheries Policy.

               •Consistency with existing policy provisions in the policy area

                  The current Sustainable Fisheries Partnership Agreement (SFPA) between European Union and Senegal
                     1
                   was signed on 20 November 2014
                     2
                  . The current 5-year Protocol
                     3
                   to the SFPA entered into application on 20 November 2014
                     4
                   and will expire on 19 November 2019. This Protocol fixes the fishing opportunities provided to the Union fleet and the corresponding financial contribution paid by the Union and the ship-owners.

                  The annual EU public financial contribution due to Senegal amounts from 1 058 000 EUR for the first year, 988 000 EUR for the second, third and fourth year, to 918 000 EUR during the fifth year for a total tonnage reference of 14 000 per year. In addition to that, 750 000 EUR per year during 5 years are earmarked for sectoral support.

               The SFPA with Senegal provides fishing opportunities targeting tuna and highly migratory species for EU vessels from two Member States (Spain and France), and fishing opportunities targeting demersal species for two vessels (from Spain). The European Union has already developed a network of bilateral Sustainable Fisheries Partnership Agreements (SFPAs) in the Atlantic Ocean facing West Africa, namely with Morocco, Mauritania, The Gambia, Guinea-Bissau, Liberia, and the Ivory Coast.

                  SFPAs contribute to promote the objectives of the CFP internationally, ensuring that Union fishing activities outside Union waters are based on the same principles and standards as those applicable under Union law. In addition, SFPAs foster scientific cooperation between the EU and its partner, promote transparency and sustainability for a better management of fishing resources and encourage governance by supporting monitoring, control and surveillance of national and foreign fleets' activities and providing funding to fight against illegal, unreported and unregulated (IUU) fishing and to contribute to the sustainable development of local fishing industry. SFPAs strengthen the EU’s position in international and regional fishing organisations: in the case of Senegal, in particular, in the International Commission for the Conservation of Atlantic Tunas (ICCAT)
                     5
                  . Finally, SFPAs are based on the best available scientific advice and contribute to the improvement of compliance with international measures, including combatting illegal, unreported and unregulated (IUU) fishing.

               •Consistency with other Union policies

                  The negotiation of a new protocol  with Senegal is in line with the EU’s external action towards African, Caribbean and Pacific (ACP) countries, and in particular with the Union objectives regarding the respect of democratic principles, human rights.

                  Although at local scale, economic activity generated in the fisheries sector in Senegal will contribute to addressing the causes of irregular migration from the country.

               2.LEGAL ELEMENTS OF THE RECOMMENDATION

               •Legal basis

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

               •Subsidiarity (for non-exclusive competence)

                  Not applicable, exclusive competence.

               •Proportionality

                  The decision is proportional to the objective.

               •Choice of the instrument

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

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

               •Ex-post evaluations/fitness checks of existing legislation

                  The Commission carried out in 2019 an ex-post evaluation of the current protocol to the SFPA Senegal as well as an ex-ante evaluation of a possible renewal of the protocol. The conclusions of the evaluation are set out in a separate Staff Working Document
                     6
                  .

                  The evaluation concluded that the EU fishing sectors (for both tuna and demersal species) are firmly interested in fishing in Senegal and that a renewal of the Protocol would help strengthen monitoring, control and surveillance and would contribute to improved governance of the fisheries in the region. For the EU, it is important to maintain an instrument allowing sectoral cooperation with Senegal, as a main player at the sub-regional level. Moreover, the importance of Dakar as one of the main landing ports contributes to the relevance of the envisaged new Protocol, both for the EU fishing industry and for the partner country. For the Senegalese authorities, the aim is to continue relations with the EU for strengthening ocean governance, benefiting from dedicated sectoral support that provides for multi-year funding opportunities.

               •Stakeholder consultations

                  Member States, industry representatives, international civil society organisations, as well as Senegal's fisheries administration and civil society have been consulted as part of the evaluation. Consultations have also taken place in the framework of the Long Distance Advisory Council.

               •Collection and use of expertise

                  Not applicable

               •Impact assessment

                  Not applicable

               •Regulatory fitness and simplification

                  Not applicable

               •Fundamental rights

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

               4.BUDGETARY IMPLICATIONS

                  The budgetary implications connected with the new Protocol include the payment of a financial contribution to the Republic of Senegal, which is compatible with the 2014-2020 Multiannual Financial Framework (MFF), in particular as regards allocations to the budget line for Sustainable Fisheries Partnership Agreements. The annual amounts for commitments and payments are established in the yearly budgetary procedure, including the reserve line for proposals not entered into force at the beginning of the year
                     7
                  .

               5.OTHER ELEMENTS

               •Implementation plans and monitoring, evaluation and reporting arrangements

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

               •Detailed explanation of the specific provisions of the proposal

                  The Commission recommends that:

                  - The Council should authorise the Commission to open and conduct negotiations for the conclusion of a new protocol to the Sustainable Fisheries Partnership Agreement with the Republic of Senegal;

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

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

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

               Recommendation for a

               COUNCIL DECISION

               to authorise the Commission to open negotiations on behalf of the European Union for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement with the Republic of Senegal

               THE COUNCIL OF THE EUROPEAN UNION,

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

               Having regard to the recommendation from the European Commission,

               Whereas negotiations should be opened with a view to concluding a new protocol to the Sustainable Fisheries Partnership Agreement with the Republic of Senegal,

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to open negotiations with Senegal, with a view to conclude a new protocol to the Sustainable Fisheries Partnership Agreement with the Republic of Senegal.

               Article 2

               The negotiations shall be conducted in consultation with the  [name of the special committee to be inserted by the Council] and on the basis of the negotiating directives set out in the annex to this Decision.

               Article 3

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 304 of 23.10.2014, p.3

                     (2)

                  https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2014055&DocLanguage=en

                     (3)

                        JO L 304 of 23.10.2014, p.9

                     (4)

                  https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2014056&DocLanguage=en

                     (5)

                  http://www.fao.org/fishery/rfb/iccat/en
                  , the body set up under international law for conserving and managing highly migratory species in the region.

                     (6)

                        SWD(2019)208

                     (7)

                        Cf Chapter 40 (reserve line 40 02 41) in line with the MFF interinstitutional agreement (2013/C 373/01).

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 18.6.2019
            COM(2019) 280 final
            ANNEX
            to the
            Recommendation
            for a Council decision to authorise the Commission to open negotiations on behalf of the European Union for the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement with the Republic of Senegal
            {SWD(2019) 207 final} - {SWD(2019) 208 final}

               ANNEX

               –Negotiation directives

               –The objective of the negotiations is the conclusion of a protocol to the Sustainable Fisheries Partnership Agreement between the European Union and the Republic of Senegal in line with Regulation (EU) N° 1380/2013 on the Common Fisheries Policy and with the Council Conclusions of 19 March 2012 on the Commission Communication of 13 July 2011 on the external dimension of the Common Fisheries Policy.

               –To promote sustainable and responsible fishing while ensuring mutual benefits for the EU and the Republic of Senegal through this new protocol, the Commission's negotiation objectives shall be based on the following:

               ·Ensuring access to the Republic of Senegal's fishing zone and the necessary authorisations for vessels of the EU fleet to fish in that zone, thereby inter alia developing the network of Sustainable Fisheries Partnership Agreements available to EU operators in West-Africa;

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

               ·Seeking an appropriate share of the surplus fisheries resources, fully commensurate with the EU fleets' interests, when they also interest other foreign fleets, as well as the application of the same technical conditions to all foreign fleets;

               ·Ensuring that access to fisheries is based on the historical and the expected future activity of the EU fleet in the region, in the light of the most updated and best available scientific assessments;

               ·Establishing a dialogue to reinforce the sectoral policy with a view to: encouraging the implementation of a responsible fisheries policy, in connection with the country's development objectives, in particular as regards the fisheries governance, the fight against illegal, unreported and unregulated fishing, control, monitoring and surveillance of fishing activities and provision of scientific advice; fostering economic activity and job opportunities, contributing inter alia to addressing the causes of irregular migration from Senegal.

               ·Ensuring that the Protocol will contribute to the promotion of growth and decent work linked to maritime activity, taking into account relevant International Labour Organisation (ILO) conventions.

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

               –In particular, the protocol should define:

               ·the fishing opportunities, by category, to be granted to European Union vessels;

               ·the financial compensation and the conditions for its payment; and

               ·the mechanisms for implementing sectoral support.


               EUROPEAN COMMISSION
            Brussels, 3.7.2019
            COM(2019) 314 final
            Recommendation for a
            COUNCIL DECISION
            supplementing the negotiating directives for the Doha Development Agenda regarding the negotiations of a multilateral framework on investment facilitation

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE PROPOSAL

               •Reasons for and objectives of the proposal

                  On 13 December 2017, at the Eleventh Ministerial Conference of the World Trade Organisation (WTO), 70 WTO Members adopted a Joint Statement on Investment Facilitation for Development
                     1
                   that called for ‘structured discussions with the aim of developing a multilateral framework on investment facilitation.’ These discussions seek to identify and develop the elements of a framework for facilitating foreign direct investment (FDI). The European Union (EU) and its Member States strongly supported and joined the initiative.

                  The EU actively participated in the structured discussions that took place during 2018 in the WTO. The discussions were transparent and open to all WTO Members, and resulted in a ‘Checklist of Issues Raised by Members’ containing possible elements of a framework for facilitating FDI identified by WTO members. This ‘Checklist’ was endorsed at a stock-taking meeting on 6 December 2018.

                  In 2019, a new phase of discussions has started. WTO members agreed on a schedule of meetings for the first half of the year, which will be devoted to the development of the elements included in the Checklist. This exploratory work on the development of such elements remains transparent and open to all WTO Members. The discussion will cover all the elements of the ‘Checklist’ on the basis of examples of existing provisions in bilateral or multilateral agreements that are relevant to investment facilitation. These examples are collected in a “Compendium of text-based examples”. A stock-taking meeting will be held in July 2019. In autumn 2019, members are likely to start proposing specific texts for a multilateral framework on investment facilitation. This means that the first phase of negotiations is likely to start as from September-October 2019.

                  The negotiations should take place within the WTO framework, and remain transparent and open to any WTO Member that decides to join. During the negotiations, the participating Members may put on the table any negotiating proposal in the realm of facilitating FDI, at the beginning or at a later stage of the negotiating process in the WTO.

                  The Commission obtained authorisation from the Council under the Doha Development Agenda (DDA), for negotiations in the WTO inter alia on trade and investment.
                     2
                   Given that FDI is a major vehicle for international trade, and investment facilitation is a way to foster cross-border investment by helping to secure a stable and predictable climate for FDI worldwide,
                     3
                   the new WTO negotiations on investment facilitation are covered by the existing authorisation, as they belong to the field of trade and investment.
                     4
                   Therefore, a new Council decision authorising the opening of negotiations pursuant to Article 218(3) of the Treaty on the Functioning of the European Union (TFEU) is not required.

                  Nonetheless, while trade and investment is not a new issue on the agenda of the WTO,
                     5
                   the negotiations on investment faciliation could potentially be novel in some aspects and may address some topics on which the EU has specific priorities. Consequently, in order to frame more accurately the negotiations, the Commission recommends to the Council the adoption of supplementary negotiating directives specific to the WTO negotiations on investment facilitation.

                  The proposed negotiating directives aim to ensure that the EU is in a position to engage in the negotiation of any investment facilitation element proposed by the participating WTO Members in the course of negotiations, in full respect of the acquis and the EU’s policy choices in trade and investment negotiations.

                  For the EU, the objectives of the negotiations are to facilitate FDI by investors and businesses, including micro, small and medium enterprises, and create new opportunities to promote inclusive growth and sustainable development. A multilateral investment facilitation framework could facilitate global investment in the same way that the WTO is helping to facilitate global trade with the Trade Facilitation Agreement. In order to achieve a high-standard outcome with the participation of the largest possible number of WTO Members, the rules and commitments should provide for appropriate flexibility for Members.

               •Consistency with existing policy provisions in the policy area

                  The above objectives are consistent with the Treaty on the European Union (TEU) that provides that the EU should ‘encourage the integration of all countries into the world economy, including through the progressive abolition of restrictions on international trade’.
                     6

                  The European Council of 28-29 June 2018 authorised the Commission to pursue WTO modernisation in pursuit of the objectives of (1) making the WTO more relevant and adaptive to a changing world, and (2) strengthening the WTO's effectiveness. Modernising the WTO’s rulemaking activities, which is one of the main objectives of the prospective negotiations on investment facilitation, forms the central pillar of this process.

                  On 18 September 2018, the Commission presented a concept paper
                     7
                   on the WTO modernisation. In the context of strengthening the WTO’s rulemaking function, the Commission inter alia underlined that ‘following the Joint Statements agreed in Buenos Aires, work is already ongoing in the areas of […] investment facilitation but further efforts will be needed to address gaps and to update the WTO rule book.’

                  The EU systematically puts forward ambitious disciplines on transparency and domestic regulation in the services and non-services sectors in its free trade negotiations. The negotiating directives proposed for the investment facilitation negotiations would be based on the same approach as the EU follows in its FTAs.

               •Consistency with other Union policies

                  The disciplines that the EU may propose in the WTO, would be fully in line with, and build on the EU’s relevant internal market legislation, and reflect the proposals made by the EU in bilateral negotiations

                  The proposed negotiating directives confirm that any rule or commitment agreed upon by the EU should be in line with the EU legal framework (point 5 in the Annex).

               2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

               •Legal basis

                  Article 207(4) first subparagraph in conjunction with Article 218(3) and (4) of the TFEU.

                  Pursuant to Article 207, where agreements concerning the common commercial policy are to be negotiated, the Commission shall make recommendations to the Council. The Commission shall conduct such negotiations in consultation with a special committee appointed by the Council to assist the Commission in this task and within the framework of such directives as the Council may address to it.

                  Article 218(3) TFEU stipulates that the Commission shall submit recommendations to the Council. The Council is empowered to adopt decisions authorising the opening of negotiations and pursuant to Article 218(4) TFEU, it may address directives to the negotiator and designate a special committee in consultation with which the negotiations must be conducted.

                  As regards the WTO negotiations on investment facilitation, the Council has already authorised the opening of negotiations, and issued directives to the Commission, on trade and investment in the WTO. However, the adoption of supplementary negotiating directives is necessary to frame more accurately these negotiations. Accordingly, the Commission recommends to the Council to adopt a Decision on the basis of Article 207(4) first subparagraph in conjunction with Article 218(3) and (4) TFEU.

               •Subsidiarity (for non-exclusive competence)

                  The common commercial policy is an area of exclusive EU competence under Article 3 TFEU. Accordingly, the subsidiarity principle does not apply (Article 5(3) TEU).

               •Proportionality

                  The recommendation of the Commission is in line with the principle of proportionality (Article 5(4) TEU).

               •Choice of the instrument

                  Decision of the Council of the European Union on negotiating directives on investment faciliation in the WTO to supplement the directives issued to the Commission on the Doha Development Agenda.

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

               •Ex-post evaluations/fitness checks of existing legislation

                  Not applicable.

               •Stakeholder consultations

                  Public consultation has not been carried out, as the substantive elements of the WTO negotiations are not known yet.

                  The Commission regularly consults stakeholders inter alia in the Expert Group on Trade Agreements
                     8
                   and the Civil Society Dialogue.
                     9

               •Collection and use of expertise

                  Not applicable.

               •Impact assessment

                  An impact assessment has not been carried out for the following reason: The WTO negotiations on investment faciliation are based on the existing authorisation of the Commission by the Council for WTO negotiations (see Section 1). The substance of the negotiations does not represent a new policy area; they are the continuation of wider WTO negotiations that have now been narrowed down to a more specific area, not including investment liberalisation or investment protection.

                  Based on the possible elements of a multilateral framework for investment facilitation identified in the “Checklist”, there is no indication that a ratification of such an agreement would lead to any significant impact for the EU. It would rather translate into a codification of pratices that are already well-established within the EU. The impacts of possible new rules and commitments resulting from the negotiations in the WTO are likely to be more substantial for certain third countries, notably developing countries and least developed countries. However, they cannot be identified ex-ante. Firstly, because negotiating proposals have not been put on the table yet by the participating WTO Members. Secondly, because it is not known which Members will take commitments on the new WTO rules and obligations and, if so, in which time span.

                  When the potential impacts are clearer, i.e. when the content of the multilateral framework and commitments of WTO members is better known, the Commission will reassess the need for a more thorough analysis. This should happen no later than at the conclusion of the WTO negotiations.

                  The EU will actively participate and submit proposals from the early stages of the negotiations to influence the outcome.

               •Regulatory fitness and simplification

                  Not applicable.

               •Fundamental rights

                  The initiative fully respects the Charter of Fundamental Rights of the European Union.

               4.BUDGETARY IMPLICATIONS

                  The initiative does not have budgetary implications.

               5.OTHER ELEMENTS

               •Implementation plans and monitoring, evaluation and reporting arrangements

                  Not applicable.

               •Explanatory documents (for directives)

                  Not applicable.

               •Detailed explanation of the specific provisions of the proposal

                  Not applicable.

               Recommendation for a

               COUNCIL DECISION

               supplementing the negotiating directives for the Doha Development Agenda regarding the negotiations of a multilateral framework on investment facilitation

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(4) first subparagraph in conjunction with Article 218(3) and (4) thereof,

               Having regard to the recommendation from the European Commission,

               Whereas:

               (1)Under the Doha Development Agenda, the Council authorised the opening of negotiations in the World Trade Organisation (WTO), and addressed directives to the Commission, inter alia on trade and investment,

               (2)On 13 December 2017, at the Eleventh Ministerial Conference of the World Trade Organisation, 70 Members of the WTO adopted a Joint Statement on Investment Facilitation for Development
                  10
                calling for structured discussions with the aim of developing a multilateral framework on investment facilitation.

               (3)The current phase of discussions, aimed at developing the possible elements of a multilateral framework on investment facilitation, will conclude in July 2019 according to the latest schedule
                  11
               , and is likely to be followed by a first negotiating phase in autumn 2019.

               (4)The adoption of supplementary negotiating directives is necessary to further frame the position of the Union in the prospective WTO negotiations on investment facilitation.

               (5)Pursuant to Article 207(3), the Trade Policy Committee should continue to be designated as the committee in consultation with which the negotiations shall be conducted,

               HAS ADOPTED THIS DECISION:

               Article 1

               The negotiating directives addressed to the Commission on the Doha Development Agenda are supplemented by the negotiating directives for the negotiations of a multilateral framework on investment facilitation set out in the Annex.

               Article 2

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        WT/MIN(17)/59 of 13 December 2017.

                     (2)

                        A set of Council conclusions form the DDA authorisation, which date from 25 October 1999 to 18 July 2008.

                     (3)

                        The latest Schedule of Meetings of the Structured Discussions on Investment Facilitation for Development (INF/IFD/W/3) of 17 April 2019 on the basis of the “Checklist of Issues Raised by Members” provides that investment facilitation concerns providing a stable, transparent and predictable business climate for FDI worldwide. The latest version of the "Checklist of Issues Raised by Members" dated 9 November 2018, was circulated to all Members as an annex to the Informal Note on Stock-taking and Next Steps on 27 November 2018.

                     (4)

                        Reference is made in particular to the Council conclusions of 26 October 1999, 8 December 1999, 29 October 2001, 21 November 2001, 21 July 2003 (which specifically provided that the Singapore and Doha Ministerial Declarations and related texts adopted as well as the earlier Council conclusions constitute the basis for action by the Union in DDA negotiations), 5 December 2003, 6 October 2004, 19 July 2005, 18 October 2005 (which specifically recalled that the Council conclusions from October 1999 to July 2005 remain valid and together constitute the Commission's mandate for the DDA negotiations), 21 November 2005, 12 June 2006, 10 March 2008 and 18 July 2008.

                     (5)

                        The WTO Working Group on the Relationship between Trade and Investment was launched in 1997.

                     (6)

                        Article 21(2)(e) TEU.

                     (7)

                  http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157331.pdf

                     (8)

                  http://ec.europa.eu/trade/trade-policy-and-you/expert-groups/

                     (9)

                  http://trade.ec.europa.eu/civilsoc/meetdetails.cfm?meet=11531

                     (10)

                        WT/MIN(17)/59.

                     (11)

                        INF/IFD/W/3.

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 3.7.2019
            COM(2019) 314 final
            ANNEX
            to the
            Recommendation for a Council Decision
            supplementing the negotiating directives for the Doha Development Agenda regarding the negotiations of a multilateral framework on investment facilitation

               ANNEX

               1.NATURE AND SCOPE OF THE RULES AND COMMITMENTS

               1.Based on the existing authorisation by the Council for negotiations in the World Trade Organisation (WTO) under the Doha Development Agenda, the aim of the multilateral negotiations on investment facilitation should be to establish a multilateral framework of rules with a view to facilitating foreign direct investment (FDI) worldwide. The objective is to create a more transparent, efficient, and predictable climate for facilitating cross-border investment. Such a framework should focus on FDI to the exclusion of short-term capital movements, and should aim at ensuring the right conditions for international investment to be conducive to sustainable development, while preserving the ability of host countries to regulate the activity of investors in their respective territories.

               2.In accordance with the Joint Ministerial Statement on Investment Facilitation for Development adopted by 70 WTO Members at the Eleventh WTO Ministerial Conference on 13 December 2017, these negotiations will not address market access, investment protection, and investor-state dispute settlement.

               3.The negotiations should be conducted and concluded with due regard to the rights and obligations of Members under the WTO, respecting the principles of transparency and inclusiveness and building on existing WTO agreements.

               4.The negotiations should aim to develop high-standard disciplines and commitments with the participation of the largest possible number of WTO Members. The negotiations should take into account the unique opportunities for, and challenges faced by, WTO Members in relation to investment facilitation. Accordingly, the rules and commitments should provide for appropriate flexibility.

               5.The rules and commitments agreed upon by the European Union (EU) should take account of the non-discrimination obligation in existing WTO agreements to the extent that these are relevant and applicable in an investment facilitation context.

               2.PROPOSED CONTENT OF THE RULES AND COMMITMENTS

               6.The negotiations should develop a new framework of disciplines in the WTO aimed at facilitating FDI. This framework should create a transparent, efficient and predictable environment for international investments to the benefit of EU businesses of all sizes, including micro, small and medium enterprises, and it should also strengthen the capacity of developing and least developed countries to attract FDI thereby increasing their participation in global value chains.

               7.The negotiations will be conducted in an open and inclusive manner. Therefore, they may cover any aspect of investment facilitation that is proposed by the participating Members. Recognising the crosscutting nature of investment facilitation, the negotiations may cover matters such as:

               –Elements aimed at improving the transparency and predictability of investment measures, including of the rules and conditions applicable to the entry and operation of FDI (publication and availability of measures and information; notification to the WTO; enquiry points);

               –Elements aimed at streamlining and speeding up administrative procedures and requirements (administrative procedures and documentation requirements; time limits for administrative procedures; treatment of incomplete applications; fees and charges; review of administrative procedures; use of e-government; one-stop shop/single window types of mechanisms; focal point/contact point/ombudsperson types of mechanisms, including relations with relevant stakeholders and dispute prevention);

               –Elements aimed enhancing international cooperation, information sharing, the exchange of best practices (international cooperation among Members; international cooperation at the multilateral level through a WTO Committee on investment facilitation matters);

               –The development dimension (challenges faced by less developed countries; sharing best practices; special and differential treatment provisions; technical assistance and capacity building) and the promotion of corporate social responsibility and sustainable development.

               8.The European Union may also engage in negotiations on other aspects relevant for facilitating FDI, as proposed by the participating Members, in line with these directives.

               9.Any rule or commitment agreed upon by the European Union should be in line with the EU legal framework.