title: Council Recommendation of 13 July 2018 on the 2018 National Reform Programme of Germany and delivering a Council opinion on the 2018 Stability Programme of Germany

text:
               10.9.2018

               EN

               Official Journal of the European Union

               C 320/19

      COUNCIL RECOMMENDATION
      of 13 July 2018
      on the 2018 National Reform Programme of Germany and delivering a Council opinion on the 2018 Stability Programme of Germany
      (2018/C 320/05)
      THE COUNCIL OF THE EUROPEAN UNION,
      Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
      Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
      Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
      Having regard to the recommendation of the European Commission,
      Having regard to the resolutions of the European Parliament,
      Having regard to the conclusions of the European Council,
      Having regard to the opinion of the Employment Committee,
      Having regard to the opinion of the Economic and Financial Committee,
      Having regard to the opinion of the Social Protection Committee,
      Having regard to the opinion of the Economic Policy Committee,
      Whereas:

                  (1)

                  On 22 November 2017, the Commission adopted the Annual Growth Survey, marking the start of the 2018 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 22 March 2018. On 22 November 2017, on the basis of Regulation (EU) No 1176/2011, the Commission also adopted the Alert Mechanism Report, in which it identified Germany 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 22 March 2018. On 14 May 2018, the Council adopted the Recommendation on the economic policy of the euro area (3) (‘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, Germany should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) and (2) below.

                  (3)

                  The 2018 country report for Germany was published on 7 March 2018. It assessed Germany's progress in addressing the country-specific recommendations adopted by the Council on 11 July 2017 (4), the follow-up given to the country-specific recommendations adopted in previous years and Germany's progress towards its national Europe 2020 targets. It also included an in-depth review under Article 5 of Regulation (EU) No 1176/2011, the results of which were also published on 7 March 2018. The Commission's analysis led it to conclude that Germany is experiencing macroeconomic imbalances. In particular, the persistently high current account surplus has cross-border relevance and reflects a subdued level of investment relative to saving in both the private and the public sector. The surplus, which is largely with non-Union countries, has slightly narrowed since 2016 and is expected to gradually decline due to a pick-up in domestic demand in the coming years whilst remaining at historically high levels over the forecast horizon. While there is currently a shift towards more domestic demand-driven growth, both consumption and investment remain muted as a share of GDP despite the favourable cyclical and financing conditions and the infrastructure investment needs for which there is fiscal space. While a number of measures have been taken to strengthen public investment, these efforts have not yet resulted in a sustainable upward trend in public investment as a share of GDP. Progress in addressing recommendations in other areas has also been limited.

                  (4)

                  Germany submitted its 2018 National Reform Programme on 30 April 2018, and its 2018 Stability Programme on 19 April 2018. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

                  (5)

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

                  (6)

               Germany is currently in the preventive arm of the Stability and Growth Pact and subject to the debt rule. In its 2018 Stability Programme, the Government plans a budget surplus of between 1 and 1
                      % of GDP over 2018-2021. The medium-term budgetary objective — a structural deficit of 0,5 % of GDP — continues to be met with a margin throughout the programme period. According to the Stability Programme, the general government debt-to-GDP ratio is expected to gradually decline to 53 % in 2021. While the Stability Programme lists and describes several planned measures of the March 2018 coalition agreement, amounting to around broadly 1
                      % of GDP over the period 2018-2021, those are not yet included in the Stability Programme's projections as they are not yet adopted. The macroeconomic scenario underpinning those budgetary projections, which has not been endorsed by an independent body, is plausible (6). Based on the Commission 2018 spring forecast, the structural balance is forecast to register a surplus of around 1,2 % of GDP in 2018 and 1,0 % of GDP in 2019, above the medium-term budgetary objective. General government debt is forecast to remain on a firm downward path. Overall, the Council is of the opinion that Germany is projected to comply with the provisions of the Stability and Growth Pact in 2018 and 2019. At the same time, while respecting the medium-term objective, there remains scope to use fiscal and structural policies to achieve a sustained upward trend in public and private investment in particular on education, research and innovation.

                  (7)

                  Real public investment increased robustly in 2015-2017. This trend reflects the Government's efforts to strengthen investment. Public investment is picking up, but as a proportion of GDP the increase is still modest, and a significant backlog at municipal level, estimated at 4 % of GDP, remains. The public capital stock is still declining as a proportion of GDP, due to negative net investment at municipal level (around EUR 6 billion annually in 2010-2016). Clearing the investment backlog at municipal level would require additional annual public investment of 0,3 % of GDP over the next decade. Investment as a percentage of the capital stock in the government sector, and public investment as a percentage of public expenditure are below the euro-area average. A service agency set up to support public investment at municipal level became operational in 2017, but additional efforts are needed to address the investment backlog. Together with the favourable budgetary position this indicates that there is scope to increase investment at all levels of government, in particular at regional and municipal levels.

                  (8)

                  Public expenditure on education remained at 4,2 % of GDP in 2016, below the Union average of 4,7 %. Spending on education and research remained at 9,0 % of GDP in 2016, falling short of the national target of 10 %. This corresponds to an estimated investment gap of about EUR 33 billion. While education expenditure has increased in real terms, a considerable investment backlog remains. At the same time, challenges such as growing student numbers, teacher shortages and further expansion of early childhood education and care will require appropriate public financing. Additional spending on education and on research and innovation is crucial for Germany's potential growth.

                  (9)

                  Digitalisation of the German economy is progressing slowly and the country faces considerable challenges. There is an obvious urban-rural digital divide with regard to fast internet (next-generation access up to 30 Mbit) coverage (only 54 % in rural areas). Germany is lagging behind on very-high-capacity broadband (> 100 Mbit) deployment. Only a small proportion of Germany's territory (7,3 %) is covered by high-performance fibre-based access networks, as compared with a Union average of 26,8 %. Instead, upgrading existing copper cable networks (vectoring) continued to be the dominating incumbent's preferred technological solution. Many services rely on very–high-speed connectivity and in 2017 25,3 % of German enterprises found their internet connections too slow for their actual business needs. A lack of such connectivity holds back investment, especially by small and medium-sized businesses, many of which are located in rural and semi-rural areas. Performance in digital public services and in e-health is also far below the Union average.

                  (10)

                  Business research and development investment is growing and Germany is close to achieving its Europe 2020 research and development intensity target. However, investment is increasingly concentrated in large firms and in medium/high-tech manufacturing, while the contribution of small and medium-sized enterprises is declining. A number of measures have been taken to strengthen entrepreneurial activity, especially by attracting private investments in risk capital. However, Germany's venture capital market remains less developed than those of other international innovation leaders.

                  (11)

                  Despite some improvements in recent years, Germany's tax system remains inefficient, in particular because it is complex and distorts decision-making, e.g. on investment, financing and labour market participation. Germany places a relatively strong emphasis on direct taxes to raise revenues and there is potential to reduce distortive direct taxation or for a shift towards less distortive taxes on property, inheritance and consumption. The levels of taxes and social contributions on income from employment were the sixth highest in the Union in 2015. The cost of capital and the effective average corporate tax rate, which differ across regions, are among the highest in the Union (28,2 % as a national aggregate, as compared with a Union average of 20,9 %). Due to the interplay of corporate income tax, local trade tax and the solidarity surcharge, the corporate tax system is complex, involves high tax administration costs and distorts the level and location of investments. In addition, the corporate income tax distorts financing decisions, with a bias towards debt financing. This bias is the seventh highest in the Union. Lowering the capital costs on equity could strengthen private investment and the relatively under-developed venture capital market. Furthermore, loss carry-forward provisions remain relatively strict, limiting the amount to 60 % of taxable income for a given year.

                  (12)

                  Regulation in Germany is still highly restrictive, especially as regards business services, regulated professions and administrative formalities for the cross-border provision of services. Key restrictions concern inter alia legal form and shareholding. Churn rates in key business services sectors such as legal, accounting, architectural and engineering activities are below the Union average, while gross operating rates in those sectors are above average, suggesting lower competitive pressures. Because of services' role as intermediate inputs, less restrictive regulation of services increases productivity in downstream service-intensive industries.

                  (13)

                  Germany's labour market performance has been very strong. Unemployment fell to a record low of 3,6 % in the fourth quarter of 2017 and employment reached 79,8 %. The level of youth unemployment (6,8 % in 2017) is among the lowest in the Union. Germany is experiencing increasing shortages of skilled labour, while certain groups' labour market potential remains under-used. The proportion of people working part-time, particularly women and those with a migrant background and caring responsibilities, is among the highest in the Union. For women, key factors include disincentives to work longer hours, coupled with a lack of sufficient childcare and all-day school facilities. Specific tax rules, particularly for second earners and low-wage workers, and the lock-in effects of the mini-job earning threshold of EUR 450 generated further disincentives to work longer hours. Germany has one of the highest tax wedges on low earners, most of whom are women. The high rate of women working part-time is accompanied by one of the widest gender gaps in part-time employment in the Union (37,5 % versus Union average of 23,1 %). This contributes to a very wide gender pay gap in Germany.

                  (14)

                  Nominal wage growth remained moderate in 2017, at 2,4 %, despite record low unemployment and high job vacancy rates. This relatively subdued rate is partly due to slow productivity increases in services, low collective bargaining coverage in some sectors and a reduction in structural unemployment. The reaction to the pick-up in inflation was limited, with real wage growth declining from 1,8 % in 2016 to 0,7 % in 2017. Collective agreements from early 2018 may lead to some wage acceleration; developments in this area are worth monitoring. The proportion of low-wage earners remains high and there is scope for increases in the number of hours worked in lower wage deciles. Increased immigration did not prevent wage growth in lower wage segments. The introduction of the statutory general minimum wage in 2015, and its subsequent rise in 2017, increased wages at the bottom of the distribution. On top of wage increases, social partners are focusing on working time flexibility in the current round of wage negotiations.

                  (15)

                  Germany has a solid social protection system overall. However, the at-risk of poverty rate for the total population rose steadily until 2015 before the trend was slightly reversed in 2016. Income inequality has also begun to decline in 2015, showing a modest reduction in the S80/S20 ratio owing to an improvement in the incomes of poorer households. The recent improvement of in-work poverty in 2016 was also modest and only benefitted men.

                  (16)

                  Germany can improve the attachment of older workers to the labour market, which would increase old-age income, boost potential output, help adapt to a tight labour market, and reduce the need for precautionary savings for old age. Fiscal sustainability risks are currently low, due in large part to a relatively high primary surplus. Still, Germany is expected to have one of the largest increases in pension expenditure in the Union up to 2070 according the 2018 Ageing Report. At 17,6 % in 2016, the risk of poverty in old age (i.e. above 65) was above the Union average of 14,7 %. The future deterioration of pension adequacy in the statutory first pillar is expected to increase the risk of poverty in old age, particularly for low-wage earners, people with atypical contracts and those with interruptions in their employment histories. The gender pension gap is one of the widest in the Union. At the same time, while the employment rate for workers aged 60-64 (58,4 % in 2017) was among the highest in the Union, the employment rate for workers aged 65-69 was in the middle third of Member States (16,1 %).

                  (17)

                  Socio-economic background remains a considerable determinant of educational outcomes and labour market integration. In science, it contributes to a performance difference of three years of schooling between the lowest and highest social quartiles according to the Programme for International Student Assessment in 2015. National data confirm the substantial correlation also for primary education. Particular challenges exist for students with a migrant background. Compared with native-born students, they are much more likely to underachieve in basic skills and leave school early or drop out of university. Also the labour market potential of people with a migrant background is not fully used. In 2017, the employment rate among non-Union nationals (aged 20-64) was more than 27 percentage points. lower than that for German nationals (32 percentage points lower in the case of female non-Union nationals). The participation of employees in adult learning is a concern for future labour market performance of workers, in particular for the low-skilled adult population of 7,5 million people who lack basic reading and writing skills.

                  (18)

                  In the context of the 2018 European Semester, the Commission has carried out a comprehensive analysis of Germany's economic policy and published it in the 2018 country report. It has also assessed the 2018 Stability Programme, the 2018 National Reform Programme and the follow-up given to the recommendations addressed to Germany in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Germany, but also the extent to which they comply 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 2018 Stability Programme and is of the opinion (7) that Germany is expected to comply with the Stability and Growth Pact.

                  (20)

                  In the light of the Commission's in-depth review and this assessment, the Council has examined the 2018 National Reform Programme and the 2018 Stability Programme. Its recommendations made under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) and (2) below,

            HEREBY RECOMMENDS that Germany take action in 2018 and 2019 to:

                  1.

                  While respecting the medium-term objective, use fiscal and structural policies to achieve a sustained upward trend in public and private investment, and in particular on education, research and innovation at all levels of government, in particular at regional and municipal levels. Step up efforts to ensure the availability of very high-capacity broadband infrastructure nationwide. Improve the efficiency and investment-friendliness of the tax system. Strengthen competition in business services and regulated professions.

                  2.

                  Reduce disincentives to work more hours, including the high tax wedge, in particular for low-wage and second earners. Take measures to promote longer working lives. Create conditions to promote higher wage growth, while respecting the role of the social partners. Improve educational outcomes and skills levels of disadvantaged groups.

         Done at Brussels, 13 July 2018.

               For the Council

               The President

            H. LÖGER

         (1)  OJ L 209, 2.8.1997, p. 1.

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

         (3)  OJ C 179, 25.5.2018, p. 1.

         (4)  OJ C 261, 9.8.2017, p. 1.

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

         (6)  According to the Regulation on the Economic Projections of the Federal Government (Vorausschätzungsverordnung) passed by the Ministry of the Economy and Energy in agreement with the Ministry of Finance and effective from July 2018, the Joint Economic Forecast project group (Gemeinschaftsdiagnose) has been declared the independent body in charge of assessing the economic projections underlying the Draft Budgetary Plans and the Stability Programmes in the sense of the Law on the Economic Projections (Vorausschätzungsgesetz).

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


title: Council Recommendation of 4 December 2018 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania

text:
               21.12.2018

               EN

               Official Journal of the European Union

               C 460/1

      COUNCIL RECOMMENDATION
      of 4 December 2018
      with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania
      (2018/C 460/01)
      THE COUNCIL OF THE EUROPEAN UNION,
      Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(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 the second subparagraph of Article 10(2) thereof,
      Having regard to the recommendation from the European Commission,
      Whereas:

                  (1)

                  On 16 June 2017, the Council decided in accordance with Article 121(4) of the Treaty on the Functioning of the European Union (‘TFEU’) that a significant observed deviation from the medium-term budgetary objective of -1 % of GDP occurred in Romania in 2016. In view of the established significant deviation, on 16 June 2017 it issued a recommendation for Romania to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure did not exceed 3,3 % in 2017, corresponding to an annual structural adjustment of 0,5 % of GDP. On 5 December 2017, the Council found that Romania had not taken effective action in response to the Recommendation of 16 June 2017 and issued a new recommendation. In the new Recommendation, the Council asked Romania to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 3,3 % in 2018, corresponding to an annual structural adjustment of 0,8 % of GDP. On 22 June 2018, the Council found that Romania had not taken effective action in response to the revised Recommendation of 5 December 2017.

                  (2)

                  On 22 June 2018, the Council decided in accordance with Article 121(4) TFEU that a significant observed deviation from the adjustment path toward the medium-term budgetary objective had also occurred in Romania in 2017. In view of the established significant deviation, on 22 June 2018 the Council issued a Recommendation (2) for Romania to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure (3) does not exceed 3,3 % in 2018 and 5,1 % in 2019, corresponding to an annual structural adjustment of 0,8 % of GDP in each year. It also recommended that Romania use any windfall gains for deficit reduction, while budgetary consolidation measures should ensure a lasting improvement in the general government structural balance in a growth-friendly manner. The Council established a deadline of 15 October 2018 for Romania to report on the action taken in response to the Recommendation of 22 June 2018.

                  (3)

                  On 13 July 2018, the Council recommended that Romania ensure that, in 2018 and in 2019, it comply with the Council Recommendation of 22 June 2018 with a view to correcting the significant deviation from the adjustment path toward the medium-term budgetary objective (4).

                  (4)

                  On 27 and 28 September 2018, the Commission undertook an enhanced surveillance mission in Romania for the purpose of on-site monitoring under Article -11(2) of Regulation (EC) No 1466/97. After having transmitted its provisional findings to the Romanian authorities for comments, the Commission reported its findings to the Council on 21 November 2018. Those findings were subsequently made public.

                  (5)

                  On 16 October 2018, the Romanian authorities submitted the report on effective action in response to the Council Recommendation of 22 June 2018 (5). Given the information provided by the authorities in their report and the overall assessment based on the Commission autumn 2018 forecast, on 21 November 2018 the Council concluded that Romania has not taken effective action in response to the Council Recommendation of 22 June 2018.

                  (6)

                  In light of the absence of effective action by Romania and the cumulated high deviation from the appropriate adjustment path toward the medium-term budgetary objective, it is appropriate to address to Romania a revised Recommendation on the appropriate measures to be taken under Article 121(4) TFEU.

                  (7)

                  Romania’s structural deficit has increased by 2,1 % of GDP in 2016 and by 1,2 % of GDP in 2017. It reached 3,4 % of GDP in 2017 and is projected in the Commission 2018 autumn forecast to broadly stabilise as of 2018. In order to correct for the cumulated deviation and to bring Romania back on an appropriate adjustment path following the past slippages, an additional effort should complement the structural effort of 0,8 % of GDP recommended by the Council on 22 June 2018. An additional effort of 0,2 % of GDP seems appropriate given the magnitude of the observed significant deviation from the recommended adjustment path towards the medium-term budgetary objective. It will accelerate the adjustment back towards the medium-term budgetary objective without putting economic growth at risk.

                  (8)

                  The required improvement of the structural balance by 1,0 % of GDP in 2019 is consistent with a nominal growth rate of net primary government expenditure not exceeding 4,5 % in 2019.

                  (9)

                  The Commission 2018 autumn forecast projects a deterioration of the structural balance by 0,1 % of GDP in 2019. Therefore, a structural improvement of 1,0 % of GDP translates into the need to adopt measures of a total structural yield of 1,1 % of GDP in 2019 compared to the current baseline in the Commission 2018 autumn forecast.

                  (10)

                  The Commission 2018 autumn forecast projects a general government deficit of 3,4 % in 2019, which is above the 3 %-of-GDP Treaty reference value. The required structural adjustment seems also appropriate to ensure that Romania respects the 3 %-of-GDP Treaty reference value in 2019 with a margin.

                  (11)

                  The failure to act upon earlier recommendations to correct the observed significant deviation and the risk of exceeding the Treaty reference value call for urgent action to put Romania’s fiscal policy back on a prudent path.

                  (12)

                  In order to achieve the recommended budgetary targets, it is crucial that Romania adopts and strictly implements the necessary measures and monitors the development of current expenditure closely.

                  (13)

                  The requirements issued in this recommendation supersede the corresponding elements set out in the fiscal recommendation contained in the Council Recommendation addressed to Romania on 13 July 2018.

                  (14)

                  Romania should report to the Council on action taken in response to this Recommendation by 15 April 2019, possibly as part of its Covergence Programme submitted pursuant to Article 7 of Regulation (EC) No 1466/97.

                  (15)

                  It is appropriate that this Recommendation be made public,

            HEREBY RECOMMENDS THAT ROMANIA:

                  (1)

                  take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 4,5 % in 2019, corresponding to an annual structural adjustment of 1,0 % of GDP, thereby putting Romania on an appropriate adjustment path toward the medium-term budgetary objective;

                  (2)

                  use any windfall gains for deficit reduction, budgetary consolidation measures should secure a lasting improvement in the general government structural balance in a growth-friendly manner;

                  (3)

                  report to the Council by 15 April 2019 on action taken in response to this Recommendation; the report should provide sufficiently specified and credibly announced measures, including the budgetary impact of each of them, as well as updated and detailed budgetary projections for 2019.

         This Recommendation is addressed to Romania.
         Done at Brussels, 4 December 2018.

               For the Council

               The President

            H. LÖGER

         (1)  OJ L 209, 2.8.1997, p. 1.

         (2)  Council Recommendation of 22 June 2018 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Romania (OJ C 223, 27.6.2018, p. 3).

         (3)  Net primary government expenditure is comprised of 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 four-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.

         (4)  Council Recommendation of 13 July 2018 on the 2018 National Reform Programme of Romania and delivering a Council opinion on the 2018 Convergence Programme of Romania (OJ C 320, 10.9.2018, p. 98).

         (5)  Available at http://data.consilium.europa.eu/doc/document/ST-13279-2018-INIT/en/pdf


title: Council Recommendation of 4 December 2018 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Hungary

text:
               21.12.2018

               EN

               Official Journal of the European Union

               C 460/4

      COUNCIL RECOMMENDATION
      of 4 December 2018
      with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Hungary
      (2018/C 460/02)
      THE COUNCIL OF THE EUROPEAN UNION,
      Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(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 10(2), second subparagraph, thereof,
      Having regard to the recommendation from the European Commission,
      Whereas:

                  (1)

                  On 22 June 2018, the Council decided in accordance with Article 121(4) of the Treaty on the Functioning of the European Union (‘TFEU’) that a significant observed deviation from the adjustment path toward the medium-term budgetary objective existed in Hungary and issued a recommendation for Hungary to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure (2) does not exceed 2,8 % in 2018, corresponding to an annual structural adjustment of 1,0 % of GDP (3). It also recommended that Hungary use any windfall gains for deficit reduction, while budgetary consolidation measures should ensure a lasting improvement in the general government structural balance in a growth-friendly manner. The Council established a deadline of 15 October 2018 for Hungary to report on the action taken in response to that Recommendation.

                  (2)

                  On 13 July 2018, the Council recommended Hungary to ensure that, in 2018, it complies with the Council Recommendation of 22 June 2018 (4) with a view to correct the significant deviation from the adjustment path toward the medium-term budgetary objective. For 2019, it was recommended that Hungary ensure that the nominal growth rate of net primary government expenditure does not exceed 3,9 %, corresponding to an annual structural adjustment of 0,75 % of GDP.

                  (3)

                  On 18 and 19 September 2018, the Commission undertook an enhanced surveillance mission in Hungary for the purpose of on-site monitoring under Article -11(2) of Regulation (EC) No 1466/97. After having transmitted its provisional findings to the Hungarian authorities for comments, the Commission reported its findings to the Council on 21 November 2018. Those findings were subsequently made public.

                  (4)

                  On 15 October 2018, the Hungarian authorities submitted the report on effective action in response to the Council Recommendation of 22 June 2018 (5). Given the information provided by the authorities in their report and the overall assessment based on the Commission autumn 2018 forecast, the Council on 21 November 2018 concluded that Hungary has not taken effective action in response to the Council Recommendation of 22 June 2018.

                  (5)

                  In light of the absence of effective action by Hungary and the cumulated high deviation by the latter from the appropriate adjustment path toward its medium-term budgetary objective, it is appropriate to address to Hungary a revised Recommendation under Article 121(4) TFEU on the appropriate measures to be taken.

                  (6)

                  Based on the Commission 2018 autumn forecast, Hungary’s structural deficit increased by 1,7 % of GDP to 3,4 % in 2017 and it is projected to deteriorate further by 0,4 % of GDP to 3,8 % in 2018. As a result, the structural deficit is estimated to be 2,3 % of GDP away from the medium-term budgetary objective of 1,5 % in 2018.

                  (7)

                  In order to correct for the cumulated deviations and to bring Hungary back on an appropriate adjustment path following past slippages, an additional and persistent effort should complement the recommended annual structural adjustment of 0,75 % of GDP for 2019 set out in the Council Recommendation addressed to Hungary on 13 July 2018. An additional effort of 0,25 % of GDP seems appropriate given the magnitude of the observed significant deviation from the recommended adjustment path toward the medium term objective. It will accelerate adjustment back towards the medium-term budgetary objective.

                  (8)

                  The required improvement of the structural balance by 1,0 % of GDP in 2019 is consistent with the nominal growth rate of net primary government expenditure not exceeding 3,3 % in 2019.

                  (9)

                  The structural improvement of 1,0 % of GDP in 2019 translates into a need to adopt measures of a total yield of 0,5 % of GDP in structural terms as compared to the current 2019 baseline of the Commission 2018 autumn forecast, given projected improvement of the structural balance in 2019.

                  (10)

                  The requirements for 2019, issued in this Recommendation, supersede the corresponding elements set out in the fiscal recommendation contained in the Council Recommendation addressed to Hungary on 13 July 2018.

                  (11)

                  Hungary should report to the Council on action taken in response to this Recommendation by 15 April 2019, possibly as part of its Convergence Programme submitted pursuant to Article 7 of Regulation (EC) No 1466/97.

                  (12)

                  It is appropriate that this Recommendation be made public,

            HEREBY RECOMMENDS THAT HUNGARY:

                  (1)

                  take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 3,3 % in 2019, corresponding to an annual structural adjustment of 1,0 % of GDP, thereby putting Hungary on an appropriate adjustment path toward the medium-term budgetary objective;

                  (2)

                  use any windfall gains for deficit reduction; budgetary consolidation measures should secure a lasting improvement in the general government structural balance in a growth-friendly manner;

                  (3)

                  report to the Council by 15 April 2019 on action taken in response to this Recommendation; the report should provide sufficiently specified and credibly announced measures, including budgetary impact of each of them, as well as updated and detailed budgetary projections for 2019.

         This Recommendation is addressed to Hungary.
         Done at Brussels, 4 December 2018.

               For the Council

               The President

            H. LÖGER

         (1)  OJ L 209, 2.8.1997, p. 1.

         (2)  Net primary government expenditure is comprised of 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 four-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.

         (3)  Council Recommendation of 22 June 2018 with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Hungary (OJ C 223, 27.6.2018, p. 1).

         (4)  Council Recommendation of 13 July 2018 on the 2018 National Reform Programme of Hungary and delivering a Council opinion on the 2018 convergence Programme of Hungary (OJ C 320, 10.9.2018, p. 72).

         (5)  https://ec.europa.eu/info/files/hungary-report-council-recommendations-under-significant-deviation-procedure_en


title: Commission Recommendation (EU) 2018/2050 of 19 December 2018 on aligning the scope of and conditions for general transfer licences for the purposes of demonstration and evaluation as referred to in point (c) of Article 5(2) of Directive 2009/43/EC of the European Parliament and of the Council (notified under document C(2018) 8598) (Text with EEA relevance.)

text:
               21.12.2018

               EN

               Official Journal of the European Union

               L 327/89

      COMMISSION RECOMMENDATION (EU) 2018/2050
      of 19 December 2018
      on aligning the scope of and conditions for general transfer licences for the purposes of demonstration and evaluation as referred to in point (c) of Article 5(2) of Directive 2009/43/EC of the European Parliament and of the Council

            (notified under document C(2018) 8598)

      (Text with EEA relevance)
      THE EUROPEAN COMMISSION,
      Having regard to the Treaty on the Functioning of the European Union, and in particular Article 292 thereof,
      Whereas:

                  (1)

                  Pursuant to Article 5 of Directive 2009/43/EC of the European Parliament and of the Council (1) Member States are obliged to publish at least four general transfer licences.

                  (2)

                  General transfer licences are a key element of the simplified licensing system introduced by Directive 2009/43/EC.

                  (3)

                  Differences in the scope of general transfer licences published by Member States in terms of defence-related products covered and diverging conditions applied to transfers of these products could hamper the implementation of Directive 2009/43/EC and the achievement of its simplification objective. Aligning national approaches as to the scope and conditions for transfers under the general transfer licences published by Member States are important to ensure the attractiveness and use of those licences.

                  (4)

                  The Council reiterated in its conclusions of 18 May 2015 the need for the implementation and application of, inter alia, Directive 2009/43/EC. Following the adoption of two previous recommendations on general transfer licences for armed forces (2) and for certified recipients (3), the Commission has announced in the European Defence Action Plan (4) and in the Report on evaluation of the Transfers Directive (5) its focus on the remaining two general transfer licences, covering transfers for the purposes of demonstration, evaluation, exhibition, repair and maintenance.

                  (5)

                  The initiative of this Recommendation has been strongly supported by the representatives of the Member States in the Committee established by Article 14 of Directive 2009/43/EC. The guidelines set out in the Recommendation reflect the discussions of an expert group set up under this Committee.

                  (6)

                  This Recommendation applies to the list of defence-related products (corresponding to the Common Military List of the European Union), as laid down in the Annex to Directive 2009/43/EC. This Recommendation will be updated when necessary to reflect future updates of the list of defence-related products.

                  (7)

                  Based on the discussions with the Member States and taking into account the characteristics of the products (including exceptions), such as for instance their sensitivity, the defence-related products listed under point 1.1. of this Recommendation are a minimum and non-exhaustive list of products, for which Member States allow transfer under their GTL-DE. This means that the GTL-DE published by a Member State may also allow for the transfer of other defence-related products included in the Annex of Directive 2009/43/EC and not listed in this Recommendation.

                  (8)

                  In the context of the discussions on this Recommendation, the Member States have recalled that they are bound by commitments under European law, such as Council Common Position 2008/944/CFSP (6), as well as by international commitments in the area of export control. In this context, Member States have acknowledged the declaration ‘Member States' Political Commitment on Security of Supply’ (7),

            HAS ADOPTED THIS RECOMMENDATION:
      1.   GENERAL TRANSFER LICENCES FOR DEMONSTRATION AND EVALUATION

      Member States are recommended to adapt their general transfer licences for demonstration and evaluation in accordance with the following elements.
      1.1.   Defence-related products eligible for transfer under the general transfer licence for the purposes of demonstration and evaluation set out in point (c) of Article 5(2) of Directive 2009/43/EC

      The following ML categories are a sub set of the list of defence-related products, as laid down in the Annex to Directive 2009/43/EC. The general transfer licence for the purposes of demonstration and evaluation (GTL-DE) should, as a minimum, allow for the transfer of defence-related products specified in the ML categories hereunder. Member States may choose to include in their GTL-DE more ML categories with corresponding defence-related products.
      List of ML categories to be covered as a minimum:

                  —

                  ML 3. All goods are included, except:

                              —

                              Sub munitions which fall within convention on cluster munitions;

                              —

                              Terminally guided projectiles;

                              —

                              Ammunition, projectiles and propelling charges, specially designed for military use.

                  —

                  ML 5. All goods are included, except:

                              —

                              Sub point 5.b) Target acquisition, designation, range-finding, surveillance or tracking systems; detection, data fusion, recognition or identification equipment; and sensor integration equipment;

                              —

                              Sub point 5.c) Countermeasure equipment for items specified by ML5.a or ML5.b.

                        All goods should be delivered without ciphering component and without integrated database.

                  —

                  ML 6. All goods are included, except:

                              —

                              Complete vehicles which fall within sub point ML6.a);

                              —

                              Chassis and turrets which fall within sub point ML6.a);

                              —

                              Equipment and equipment's components excluded in the other ML categories.

                  —

                  ML 7. The following goods are included:

                              —

                              Sub point 7.f) Protective and decontamination equipment, specially designed or modified for military use, components and chemical mixtures;

                              —

                              Sub point 7.g) Equipment specially designed or modified for military use designed or modified for the detection or identification of materials specified by ML7.a, ML7.b or ML7.d, and specially designed components therefor.

                  —

                  ML 8. All goods are included, except:

                              —

                              All substances with all of the following characteristics:

                                          —

                                          Detonating velocity equal or exceeding to 8 000 m/s;

                                          —

                                          Density equal or up to 1,80 g/cm3.

                              —

                              All explosives, as follow, and related mixtures:

                                          —

                                          Sub point 8.a.15) HNS (hexanitrostilbene) (CAS 20062-22-0);

                                          —

                                          Sub point 8.a.21) RDX and derivatives, as follows:

                                                      —

                                                      RDX (cyclotrimethylenetrinitramine, cyclonite, T4, hexahydro-1,3,5-trinitro-1,3,5-triazine, 1,3,5-trinitro-1,3,5-triaza-cyclohexane, hexogen or hexogene) (CAS 121-82-4);

                                                      —

                                                      Keto-RDX (K-6 or 2,4,6-trinitro-2,4,6-triazacyclohexanone) (CAS 115029-35-1);

                                          —

                                          Sub point 8.a.23) TATB (triaminotrinitrobenzene) (CAS 3058-38-6).

                              —

                              All substances that might be used directly or indirectly in production of sub munitions weapon which fall within Convention on Cluster Munitions, signed in Oslo on 3 December 2008, except towards Member States which ratified the Convention on Cluster Munitions.

                  —

                  ML 9. All goods are included, except:

                              —

                              Complete vessels of war (surface or underwater) which fall within sub point ML9.a);

                              —

                              Complete hulls;

                              —

                              Sub point ML9.a)2.d) Active weapon countermeasure systems specified in ML4.b., ML5.c. or ML11.a;

                              —

                              Sub point ML9.b)4. Air independent propulsion (AIP) systems specially designed for submarines;

                              —

                              Sub point ML9.d) Anti-submarine nets and anti-torpedo nets, specially designed for military use;

                              —

                              Items under ML9.c) Underwater detection devices, specially designed for military use, controls therefor and components therefor specially designed for military use.

                  —

                  ML 10. All goods are included, except:

                              —

                              Complete aircraft, lighter-than-air vehicles, unmanned aerial vehicles which fall within sub point ML10.a), ML10.b) or ML10.c);

                              —

                              Fuselage for combat aircraft and combat helicopter;

                              —

                              Engines for combat aircraft;

                              —

                              Equipment and equipment's components excluded in the other ML categories.

                  —

                  ML 11. The following goods are included:

                              —

                              Sub point ML11.a)g. Guidance and navigation equipment except items specially designed for or modified for missiles, rockets, space launchers and Unmanned Aerial Vehicles (‘UAVs’);

                              —

                              Sub point ML11.a)h. Digital troposcatter-radio communications transmission equipment;

                              —

                              Sub point ML11.a)j. Automated command and control systems.

                  —

                  ML 13. All goods are included.

                  —

                  ML 15. All goods are included, except:

                              —

                              Sub point ML15.f).

                  —

                  ML 16. All goods are included, except:

                              —

                              Any items related to goods linked to ballistic technology and CBRN proliferation.

                  —

                  ML 17. The following goods are included:

                              —

                              Sub point ML17.b) Construction equipment specially designed for military use;

                              —

                              Sub point ML17.d) Field engineer equipment specially designed for military use;

                              —

                              Sub point ML17.j) Mobile repair shops specially designed or modified to service military equipment;

                              —

                              Sub point ML17.k) Field generators specially designed or modified for military use;

                              —

                              Sub point ML17.l) Containers specially designed or modified for military use;

                              —

                              Sub point ML17.m) Ferries, other than those specified elsewhere in the EU Common Military list, bridges and pontoons, specially designed for military use;

                              —

                              Sub point ML17.o) Laser protection equipment specially designed for military use.

                  —

                  ML 21. The following goods are included:

                              —

                              Sub point ML21.a) Software specially designed or modified for the use of goods listed in the GTL;

                              —

                              Sub point ML21.b)4. Software specially designed for military use or specially designed for Command, Communications, Control and Intelligence (C3I) or Command, Communications, Control, Computer and Intelligence (C4I) applications.

                  —

                  ML 22. The following is included:

                              —

                              Only the necessary technology for the use of the goods allowed in the same general transfer license.

            1.2.   Conditions to be incorporated into the general transfer licence for demonstration and evaluation

      The following list is not exhaustive. However, other conditions added by a Member State are not to contradict or undermine the conditions listed below.

                  Geographic validity

                  :

                  European Economic Area (8)

                  Transfer for demonstration

                  :

                  Transfer of a defence-related product for use in an environment simulating operational conditions. The term ‘Transfer for Demonstration’ covers test firing of arms.

                  Transfer for evaluation

                  :

                  Transfer of a defence-related product for testing the product and sharing test results. The term ‘Transfer for Evaluation’ covers technology transfer for sharing test results.

                  Re-transfer

                  :

                  Member States are to choose one of the following options for re-transfer of the defence-related product after demonstration or evaluation:

                              (a)

                              Exemption from the obligation of prior authorisation can be implemented in accordance with Article 4(2)(e) of Directive 2009/43/EC;

                              (b)

                              Publication of a specific general transfer licence for return of defence-related products after demonstration or evaluation, as appropriate, with at least the same list of eligible defence-related products;

                              (c)

                              Incorporation of re-transfer into the general transfer licence for demonstration and/or evaluation.

                  Duration

                  :

                  Originating Member States may specify a time-limit for the return of the defence-related product to be observed by the supplier towards the Competent Authority in the originating Member State. The Member States from which the defence-related product is re-transferred may also specify a time-limit for the re-transfer to be observed by the supplier, or its representative.

            2.   FOLLOW UP

      Member States are invited to give effect to this Recommendation by 1 July 2019 at the latest.
      Member States are encouraged to inform the Commission of the measures taken to give effect to this Recommendation.
      3.   ADDRESSEES

      This Recommendation is addressed to the Member States.

         Done at Brussels, 19 December 2018.

               For the Commission

            Elżbieta BIEŃKOWSKA

               Member of the Commission

         (1)  Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community (OJ L 146, 10.6.2009, p. 1).

         (2)  OJ L 329, 3.12.2016, p. 101.

         (3)  OJ L 329, 3.12.2016, p. 105.

         (4)  COM(2016) 950 final.

         (5)  COM(2016) 760 final.

         (6)  Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment (OJ L 335, 13.12.2008, p. 99).

         (7)  Adopted by the Representatives of the Governments of EDA participating Member States meeting within the Council at its 3551st meeting held on 19 June 2017.

         (8)  The EEA Joint Committee Decision No 111/2013 of 14 June 2013 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement (OJ L 318, 28.11.2013, p. 12), which incorporated Directive 2009/43/EC into the EEA Agreement included an explicit adaptation text: ‘This Directive shall not apply to Liechtenstein’.


title: Commission Recommendation (EU) 2018/2051 of 19 December 2018 on aligning the scope of and conditions for general transfer licences for the purposes of repair and maintenance as referred to in point (d) of Article 5(2) of Directive 2009/43/EC of the European Parliament and of the Council (notified under document C(2018) 8610) (Text with EEA relevance.)

text:
               21.12.2018

               EN

               Official Journal of the European Union

               L 327/94

      COMMISSION RECOMMENDATION (EU) 2018/2051
      of 19 December 2018
      on aligning the scope of and conditions for general transfer licences for the purposes of repair and maintenance as referred to in point (d) of Article 5(2) of Directive 2009/43/EC of the European Parliament and of the Council

            (notified under document C(2018) 8610)

      (Text with EEA relevance)
      THE EUROPEAN COMMISSION,
      Having regard to the Treaty on the Functioning of the European Union, and in particular Article 292 thereof,
      Whereas:

                  (1)

                  Pursuant to Article 5 of Directive 2009/43/EC of the European Parliament and of the Council (1) Member States are obliged to publish at least four general transfer licences.

                  (2)

                  General transfer licences are a key element of the simplified licensing system introduced by Directive 2009/43/EC.

                  (3)

                  Differences in the scope of general transfer licences published by Member States in terms of defence-related products covered and diverging conditions applied to transfers of these products could hamper the implementation of Directive 2009/43/EC and the achievement of its simplification objective. Aligning national approaches as to the scope of and conditions for transfers under the general transfer licences published by Member States are important to ensure the attractiveness and use of those licences.

                  (4)

                  The Council reiterated in its conclusions of 18 May 2015 the need for the implementation and application of inter alia Directive 2009/43/EC. Following the adoption of two previous recommendations on general transfer licences for armed forces (2) and for certified recipients (3), the Commission has announced in the European Defence Action Plan (4) and in the Report on evaluation of the Transfers Directive (5) its focus on the remaining two general transfer licences, covering transfers for the purposes of demonstration, evaluation, exhibition, repair and maintenance.

                  (5)

                  The initiative of this Recommendation has been strongly supported by the representatives of the Member States in the Committee established by Article 14 of Directive 2009/43/EC. The guidelines set out in the Recommendation reflect the result discussions of an expert group set up under this Committee.

                  (6)

                  This Recommendation applies to the list of defence-related products (corresponding to the Common Military List of the European Union), as laid down in the Annex to Directive 2009/43/EC. This Recommendation will be updated when necessary to reflect future updates of the list of defence-related products.

                  (7)

                  Based on the discussions with the Member States and taking into account the characteristics of the products (including exceptions), such as for instance their sensitivity, the defence-related products listed under point 1.1 of this Recommendation are a minimum and non-exhaustive list of products, for which Member States allow transfer under their GTL-RM. This means that the GTL-RM published by a Member State may also allow for the transfer of other defence-related products included in the Annex of Directive 2009/43/EC and not listed in this Recommendation.

                  (8)

                  In the context of the discussions on this Recommendation, the Member States have recalled that they are bound by commitments under European law, such as Council Common Position 2008/944/CFSP (6), as well as by international commitments in the area of export control. In this context, Member States have acknowledged the declaration ‘Member States' Political Commitment on Security of Supply’ (7).

            HAS ADOPTED THIS RECOMMENDATION:
      1.   GENERAL TRANSFER LICENCES FOR REPAIR AND MAINTENANCE

      Member States are recommended to adapt their general transfer licences for repair and maintenance in accordance with the following elements.
      1.1.   Defence-related products eligible for transfer under the general transfer licence for the purposes of repair and maintenance set out in point (d) of Article 5(2) of Directive 2009/43/EC

      The following ML categories are a sub set of the list of defence-related products, as laid down in the Annex to Directive 2009/43/EC. The general transfer licence for the purposes of repair and maintenance (GTL-RM) should, as a minimum, allow for the transfer of defence-related products specified in the ML categories hereunder. Member States may choose to include in their GTL-RM more ML categories with corresponding defence-related products.
      List of ML categories to be covered as a minimum:

                  —

                  ML 3. All goods are included, except:

                              —

                              Sub munitions which fall within convention on cluster munitions;

                              —

                              Terminally guided projectiles;

                              —

                              Ammunition, projectiles and propelling charges, specially designed for military use.

                  —

                  ML 4. All goods are included, except:

                              —

                              Sub point 4.a) Bombs, torpedoes, rockets, missiles, other devices and charges and specially designed or modified for military use components;

                              —

                              Sub point 4.b) Specially designed components for the purpose of launching, laying, decoying, jamming, disrupting which fall within sub ML4.a).

                  —

                  ML 5. All goods are included, except:

                              —

                              Sub point 5.b) Target acquisition, designation, range-finding, surveillance or tracking systems; detection, data fusion, recognition or identification equipment; and sensor integration equipment;

                              —

                              Sub point 5.c) Countermeasure equipment for items specified by ML5.a or ML5.b.

                        All goods should be delivered without ciphering component and without integrated database.

                  —

                  ML 6. All goods are included, except:

                              —

                              Complete vehicles;

                              —

                              Chassis and turrets which fall within sub point ML6.a);

                              —

                              Equipment and equipment's components excluded in the other ML categories.

                  —

                  ML 7. The following goods are included:

                              —

                              Sub point 7.f) Protective and decontamination equipment, specially designed or modified for military use, components and chemical mixtures;

                              —

                              Sub point 7.g) Equipment specially designed or modified for military use designed or modified for the detection or identification of materials specified by ML7.a, ML7.b or ML7.d, and specially designed components therefor.

                  —

                  ML 8. All goods are included, except:

                              —

                              All substances with all of the following characteristics:

                                          —

                                          Detonating velocity equal or exceeding to 8 000m/s;

                                          —

                                          Density equal or up to 1,80g/cm3.

                              —

                              All explosives, as follow, and related mixtures:

                                          —

                                          Sub point 8.a.15) HNS (hexanitrostilbene) (CAS 20062-22-0);

                                          —

                                          Sub point 8.a.21) RDX and derivatives, as follows:

                                                      —

                                                      RDX (cyclotrimethylenetrinitramine, cyclonite, T4, hexahydro-1,3,5-trinitro-1,3,5-triazine, 1,3,5-trinitro-1,3,5-triaza-cyclohexane, hexogen or hexogene) (CAS 121-82-4);

                                                      —

                                                      Keto-RDX (K-6 or 2,4,6-trinitro-2,4,6-triazacyclohexanone) (CAS 115029-35-1);

                                          —

                                          Sub point 8.a.23) TATB (triaminotrinitrobenzene) (CAS 3058-38-6).

                              —

                              All substances that might be used directly or indirectly in production of sub munitions weapon which fall within Convention on Cluster Munitions, signed in Oslo on 3 December 2008, except towards Member States which ratified the Convention on Cluster Munitions.

                  —

                  ML 9. All goods are included, except:

                              —

                              Complete vessels of war (surface or underwater) which fall within sub point ML9.a);

                              —

                              Complete hulls;

                              —

                              Items under ML9.c) Underwater detection devices, specially designed for military use, controls therefor and components therefor specially designed for military use.

                  —

                  ML 10. All goods are included, except:

                              —

                              Complete aircraft, lighter-than-air vehicles, unmanned aerial vehicles which fall within sub point ML10.a) or ML10.c);

                              —

                              Fuselage for combat aircraft and combat helicopter;

                              —

                              Engines for combat aircraft;

                              —

                              Equipment and equipment's components excluded in the other ML categories.

                  —

                  ML 11. the following goods are included:

                              —

                              Sub point ML11.a)g. Guidance and navigation equipment except items specially designed for or modified for missiles, rockets, space launchers and Unmanned Aerial Vehicles (‘UAVs’);

                              —

                              Sub point ML11.a)h. Digital troposcatter-radio communications transmission equipment;

                              —

                              Sub point ML11.a)j. Automated command and control systems.

                  —

                  ML 13. All goods are included.

                  —

                  ML 14. All goods are included.

                  —

                  ML 15. All goods are included.

                  —

                  ML 16. All goods are included, except:

                              —

                              Any items related to goods linked to ballistic technology and CBRN proliferation.

                  —

                  ML 17. The following goods are included:

                              —

                              Sub point ML17.b) Construction equipment specially designed for military use;

                              —

                              Sub point ML17.d) Field engineer equipment specially designed for military use;

                              —

                              Sub point ML17.j) Mobile repair shops specially designed or modified to service military equipment;

                              —

                              Sub point ML17.k) Field generators specially designed or modified for military use;

                              —

                              Sub point ML17.l) Containers specially designed or modified for military use;

                              —

                              Sub point ML17.m) Ferries, other than those specified elsewhere in the EU Common Military list, bridges and pontoons, specially designed for military use;

                              —

                              Sub point ML17.o) Laser protection equipment specially designed for military use.

                  —

                  ML 21. The following goods are included:

                              —

                              Sub point ML21.a) Software specially designed or modified for the use of goods listed in the GTL;

                              —

                              Sub point ML21.b)4. Software specially designed for military use or specially designed for Command, Communications, Control and Intelligence (C3I) or Command, Communications, Control, Computer and Intelligence (C4I) applications.

                  —

                  ML 22. The following is included:

                              —

                              The necessary technology for the use of the goods allowed in the same general transfer licence.

            1.2.   Conditions to be incorporated into the general transfer licence for the purposes of repair and maintenance

      The following list of conditions is not exhaustive. However, other conditions added by a Member State are not to contradict or undermine the conditions listed below.

                  Geographic validity

                  :

                  European Economic Area (8)

                  Transfer for repair

                  :

                  Transfer of a defence-related product for the purpose of its repair and not upgrade or improvement in terms of performance enhancement.

                  Transfer for maintenance

                  :

                  Transfer of a defence-related product for the purpose of its maintenance and not upgrade or improvement in terms of performance enhancement.

                  Return

                  :

                  Member States may require the existence of a previous authorisation for the original transfer of the item which is returned after repair. Member States are to choose one of the following options for return of the defence-related product after repair or maintenance:

                              (a)

                              Exemption from the obligation of prior authorisation in accordance with Article 4(2)(e) of Directive 2009/43/EC;

                              (b)

                              Publication of a specific general transfer licence for return of defence-related products after repair or maintenance, with at least the same list of eligible defence-related products;

                              (c)

                              Incorporation of return into the general transfer licence for repair and/or maintenance.

                  Duration

                  :

                  Member States may specify a time limit for the return of the defence-related product.

            2.   FOLLOW UP

      Member States are invited to give effect to this Recommendation by 1 July 2019 at the latest.
      Member States are encouraged to inform the Commission of the measures taken to give effect to this Recommendation.
      3.   ADDRESSEES

      This Recommendation is addressed to the Member States.

         Done at Brussels, 19 December 2018.

               For the Commission

            Elżbieta BIEŃKOWSKA

               Member of the Commission

         (1)  Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community (OJ L 146, 10.6.2009, p. 1).

         (2)  OJ L 329, 3.12.2016, p. 101.

         (3)  OJ L 329, 3.12.2016, p. 105.

         (4)  COM(2016) 950 final.

         (5)  COM(2016) 760 final.

         (6)  Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment (OJ L 335, 13.12.2008, p. 99).

         (7)  Adopted by the representatives of the Governments of European Defence Agency participating Member States meeting within the Council at its 3551st meeting held on 19 June 2017.

         (8)  The EEA Joint Committee Decision No 111/2013 of 14 June 2013 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement (OJ L 318, 28.11.2013, p. 12), which incorporated Directive 2009/43/EC into the EEA Agreement included an explicit adaptation text: ‘This Directive shall not apply to Liechtenstein.’


               30.11.2017

               EN

               Official Journal of the European Union

               C 408/54

         P7_TA(2014)0260
   Role of broadcasting media in projecting the EU and its values
   European Parliament recommendation to the Council, the Commission and the European External Action Service of 2 April 2014 on the role of broadcasting media in projecting the EU and its values (2013/2187(INI))
   (2017/C 408/08)

      The European Parliament,

               —

               having regard to Articles 2 and 21 of the Treaty on European Union (TEU),

               —

               having regard to Article 167 of the Treaty on the Functioning of the European Union,

               —

               having regard to the Universal Declaration of Human Rights adopted by the UN General Assembly on 10 December 1948 and to all relevant international human rights instruments, including the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights,

               —

               having regard to Protocol No 29, annexed to the Treaty of Lisbon, on the system of public broadcasting in the Member States,

               —

               having regard to the Charter of Fundamental Rights of the European Union, in particular Article 11 thereof,

               —

               having regard to the EU guidelines on human rights,

               —

               having regard to the Strategic Framework and Action Plan on Human Rights and Democracy adopted by the Council on 25 June 2012 (1),

               —

               having regard to the Commission communication of 3 October 2007 entitled ‘Communicating Europe in Partnership’ (COM(2007)0568) and to the Commission proposal of 3 October 2007 for an interinstitutional agreement on ‘Communicating Europe in Partnership’ (COM(2007)0569),

               —

               having regard to its resolution of 25 November 2010 on ‘public service broadcasting in the digital era: the future of the dual system’ (2),

               —

               having regard to Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) (3),

               —

               having regard to its resolution of 12 May 2011 on the cultural dimensions of the EU’s external actions (4),

               —

               having regard to its resolution of 11 December 2012 on a digital freedom strategy in EU foreign policy (5),

               —

               having regard to its resolution of 13 June 2013 on freedom of the press and media in the world (6),

               —

               having regard to the its resolution of 24 October 2013 on the Annual Report from the Council to the European Parliament on the Common Foreign and Security Policy (7),

               —

               having regard to its resolution of 11 December 2013 on the Annual Report on Human Rights and Democracy in the World 2012 and the European Union’s policy on the matter (8),

               —

               having regard to the European Charter on Freedom of the Press,

               —

               having regard to its resolutions of 22 November 2012 on ‘Enlargement: policies, criteria and the EU’s strategic interests’ (9), of 12 December 2013 on the 2013 progress report on Albania (10), of 6 February 2014 on the 2013 progress report on Bosnia and Herzegovina (11), of 6 February 2014 on the 2013 progress report on the former Yugoslav Republic of Macedonia (12), of 16 January 2014 on the 2012 progress report on Iceland and the post-election perspectives (13), of 16 January 2014 on the European integration process of Kosovo (14), of 6 February 2014 on the 2013 progress report on Montenegro (15), of 16 January 2014 on the 2013 progress report on Serbia (16), of 12 March 2014 on the 2013 progress report on Turkey (17), of 23 October 2013 on ‘the European Neighbourhood Policy: towards a strengthening of the partnership. Position of the European Parliament on the 2012 reports’ (18), of 23 May 2013 on asset recovery by Arab Spring countries in transition (19), of 14 March 2013 on EU-China relations (20), and of 13 December 2012 containing the European Parliament’s recommendations to the Council, the Commission and the European External Action Service on the negotiations of the new EU-Russia Agreement (21),

               —

               having regard to Rule 97 of its Rules of Procedure,

               —

               having regard to the recommendation of the Committee on Foreign Affairs (A7-0248/2014),

               A.

               whereas independent European broadcasting media offer the public — in Europe and worldwide — a joint vision, support the values enshrined in the EU Treaties, such as human rights and fundamental freedoms, including freedom of expression, and promote pluralism, independent thought, cultural diversity, plurality of vision and the fundamental value of fostering non-violent conflict resolution, tolerance and respect, both within the EU and in the context of its external relations;

               B.

               whereas any threat to media independence, whether through government interference, intimidation of journalists, a lack of transparency in ownership structures or overriding commercial interests, upsets the overall state of media freedom and pluralism in any country;

               C.

               whereas governments bear the primary responsibility for guaranteeing and protecting freedom of expression and the media, notwithstanding the EU’s role in overseeing the application of Article 11 of the EU Charter of Fundamental Rights when Member States are implementing EU law; whereas it is enshrined in EU law, in particular in Protocol No 29 annexed to the TEU, that the system of public broadcasting in the Member States is directly related to the democratic, social and cultural needs of each society and to the need to preserve media pluralism;

               D.

               whereas radio and television broadcasting, increasingly complemented by online media services, is an effective and cost-efficient way to reach the public in Europe and in third countries, and constitutes the main source of information for most citizens in the EU and beyond;

               E.

               whereas new digital and online media platforms have contributed to increased diversity and pluralism and are of special significance in countries where access to more traditional sources of information is restricted;

               F.

               whereas European media broadcasting internationally can play an important role in communicating the values of democracy, media freedom and human rights throughout the world, in explaining different national perceptions, in communicating EU policies, in shaping a genuine European perspective and in providing audiences with reliable and high-quality information, most significantly by means of a firm and unyielding commitment to journalistic objectivity;

               G.

               whereas broadcasting for democratisation and promotion of human rights in third countries does not explicitly fall within the remit of EU media policy;

               H.

               whereas there is a need to establish a coherent European media broadcasting strategy in the EU’s external relations in order to promote the EU’s underpinning values and its goals as a global actor, as well as to shape debates and build understanding of foreign policy issues;

               I.

               whereas the EU’s provision of initial funding for ‘European Radio for Belarus’ and of continuous project-based support for independent broadcasting media in third countries are good examples of promoting freedom of expression and other fundamental rights and freedoms in the framework of the common foreign and security policy (CFSP);

               J.

               whereas setting up a worldwide European radio service could be very useful as a comprehensive tool for the EU’s external relations and the promotion of universal democratic values and human rights; whereas the use of online technologies could facilitate such an initiative;

               K.

               whereas the EU supports the international news channel Euronews, which is broadcast in 13 languages, is understood by 53 % of the world’s population, is distributed to 410 million households in 155 countries, has worldwide satellite coverage, is the leading channel in terms of potential audience in Europe and among non-Arabic news channels in Arab countries and sub-Saharan Africa, and is accessible free of charge worldwide via various mobile devices;

               L.

               whereas the EU has had a service contract with Euronews since 2005, providing it with core funding of EUR 5 million per year to produce and broadcast a number of programmes on European affairs; whereas two other service contracts, worth EUR 5 million per year over five years, were signed in 2007 and 2009 for Euronews broadcasts in Arabic and Farsi respectively; whereas in December 2010 the EU and Euronews signed a multiannual framework partnership agreement; whereas the Commission’s financial contribution to Euronews for 2013 was established by the Commission decision of 8 May 2013 concerning the adoption of the amended 2013 work programme in the field of communication, serving as a financing decision (C(2013)2631); whereas Euronews’s estimated revenue for 2014 is made up of shareholders’ licence fees (9 %), commercial profits (49 %) and funding from the Commission and its various directorates-general (42 %);

               M.

               whereas editorial independence from any political interference, along with impartiality, diversity and respect for viewers, is a key element of Euronews’s annual statement of commitment to viewers (22);

               N.

               whereas in 2009 the Commission carried out an evaluation of the Euronews core contract, which confirmed the unique and cost-effective status of Euronews as a pan-European news provider, reaching out to more viewers in Europe than its rival international news channels (23);

               1.

               Addresses the following recommendations to the Council, the Commission and the European External Action Service:

                           (a)

                           to understand the importance of free European media, and in particular of financially sustainable and independent public service broadcasting, in promoting EU democratic values and informing the public about policies and goals in the sphere of the CFSP, notably by enhancing understanding of the issues that unite and divide Europe and bringing European citizens closer together as regards their understanding of foreign policy;

                           (b)

                           to establish a coherent and robust EU media broadcasting strategy in the context of the EU’s external relations, thereby promoting freedom of expression and media pluralism and upholding and strengthening democracy and human rights in Europe and in third countries; to make this broadcasting strategy an integrated tool of the CFSP;

                           c)

                           to define, as part of this strategy, a specific approach to European broadcasting media — notwithstanding the independence of the media and the competence of Member States to confer, define and organise the public service broadcasting remit — which:

                                       (i)

                                       fosters an enabling media environment in third countries for the development of independent and professional broadcasting media;

                                       (ii)

                                       encourages European media broadcasting internationally to:

                                                   —

                                                   operate in a pluralistic and competitive media environment — having immediate access to first-hand current news, being able to make use of the advantages of the latest technologies and staying at the forefront of the digital revolution — and create authentic and diversified content;

                                                   —

                                                   be editorially independent;

                                                   —

                                                   adhere to a broadcasting charter requiring accurate and objective news coverage and a balanced and comprehensive projection of the diversity of the EU and its Member States, to adhere to a journalistic code with a special emphasis on policies aimed at guaranteeing journalistic independence, accuracy and balance, and in this respect to establish their own independent codes of conduct and to define editorial lines;

                                                   —

                                                   offer a platform for the exchange of opinions and debate pertaining to socially and/or politically relevant issues, thus leading and shaping the debate from a European perspective, thanks to a wide network of correspondents, and stimulating public interest and participation by citizens;

                                                   —

                                                   use the various methods of broadcasting news and opinion programmes, including TV, radio, the internet, online broadcasting, the social media and mobile platforms, in order to ensure the broadest possible outreach to public audiences outside the EU;

                                                   —

                                                   reflect appropriately the diversity of opinions and contexts in the EU, including the views and realities of the newer Member States;

                                                   —

                                                   be active in training future leading European and non-European journalists;

                                                   —

                                                   not be afraid of tackling serious issues in depth and presenting the objective reality from multiple perspectives;

                           (d)

                           to consider that Euronews, with its broad network of national broadcasters and its wide distribution, has the potential to play an important role in the media landscape and in stimulating the debate on Europe, including in third countries; to acknowledge also, however, that in order to play such a role Euronews should:

                                       (i)

                                       have the means to continue to operate in various languages, including non-European languages;

                                       (ii)

                                       continue to strive to strengthen its editorial independence;

                                       (iii)

                                       have the means to promote education and training opportunities for journalists in connection with European issues, and to continue to offer training opportunities for external journalists, especially through its Euronews Network project;

                                       (iv)

                                       be further strengthened financially and structurally in order to be able to perform at a level comparable to that of worldwide news channels;

                                       (v)

                                       publish on its website an overview of its revenue so as to provide transparency of its operations;

                           (e)

                           to direct project-based EU external aid funding towards those broadcasters that already respect and work in accordance with the highest standards of journalistic independence, accuracy and balance and promote EU values, as well as to projects which would enable those broadcasters that lag behind in terms of independence, accuracy and sustainability to reach these standards, bearing in mind that evaluation of performance on the basis of measurable criteria should be a precondition for any further funding;

                           (f)

                           to launch a reflection process at EU level with the aim of establishing a worldwide European radio service;

                           (g)

                           to systematically address, in order to maximise the impact of the proposed EU broadcasting strategy in the context of the EU’s external relations, the issue of restrictions on media freedom in all bilateral meetings with the relevant third countries;

                           (h)

                           to raise the Member States’ awareness of the importance of broadcasting media for the EU’s external relations, and to seek ways to coordinate the proposed EU strategy with Member States’ actions and strategies in this field in order to enhance coherence;

                           (i)

                           to work towards the creation of an enabling media environment in third countries, along with the development of independent and professional broadcasting media;

                           (j)

                           to react swiftly when satellite signals from European media broadcasting internationally are jammed in third countries, and when third-country governments suspend broadcasting by European media;

               2.

               Instructs its President to forward this recommendation to the Council, the Commission and the European External Action Service and, for information, to the Member States.

      (1)  Council document 11855/2012.

      (2)  OJ C 99 E, 3.4.2012, p. 50.

      (3)  OJ L 95, 15.4.2010, p. 1.

      (4)  OJ C 377 E, 7.12.2012, p. 135.

      (5)  Texts adopted, P7_TA(2012)0470.

      (6)  Texts adopted, P7_TA(2013)0274.

      (7)  Texts adopted, P7_TA(2013)0453.

      (8)  Texts adopted, P7_TA(2013)0575.

      (9)  Texts adopted, P7_TA(2012)0453.

      (10)  Texts adopted, P7_TA(2013)0596.

      (11)  Texts adopted, P7_TA(2014)0102.

      (12)  Texts adopted, P7_TA(2014)0103.

      (13)  Texts adopted, P7_TA(2014)0041.

      (14)  Texts adopted, P7_TA(2014)0040.

      (15)  Texts adopted, P7_TA(2014)0104.

      (16)  Texts adopted, P7_TA(2014)0039.

      (17)  Texts adopted, P7_TA(2014)0235.

      (18)  Texts adopted, P7_TA(2013)0446.

      (19)  Texts adopted, P7_TA(2013)0224.

      (20)  Texts adopted, P7_TA(2013)0097.

      (21)  Texts adopted, P7_TA(2012)0505.

      (22)  http://www.euronews.com/services-ue/

      (23)  http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2010-3324