Important legal notice

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52005SC0834

Recommendation for a Council opinion in accordance with Article 5(3) of Council Regulation (EC) No 1466/97 of 7 July 1997 on the updated stability programme of Portugal, 2005-2009  /* SEC/2005/0834 final */

	[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |Brussels, 22.6.2005SEC(2005) 834 finalRecommendation for aCOUNCIL OPINIONin accordance with Article 5(3) of Council Regulation (EC) No 1466/97 of 7 July 1997 on the updated stability programme of Portugal, 2005-2009(presented by the Commission)EXPLANATORY MEMORANDUMCouncil Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[1] stipulates that participating Member States, that is, those which have adopted the single currency, had to submit stability programmes to the Council and the Commission by 1 March 1999. In accordance with Article 5 of this Regulation, the Council had to examine each stability programme based on assessments prepared by the Commission and the Committee set up by Article 114 of the Treaty (the Economic and Financial Committee). On the basis of a recommendation from the Commission, and after having consulted the Economic and Financial Committee, the Council delivered an opinion, following its examination of the programme. According to the Regulation, Member States need to submit annual updates of their stability programmes, which may also be examined by the Council in accordance with these same procedures. Portugal’s first stability programme, covering the period 1999-2002, was submitted on 30 December 1998 and assessed by the Council on 8 February 1999. Updates were presented every following year.The Portuguese authorities submitted the most recent update of the Portuguese stability programme on 9 June 2005. The update covers the period from 2005 to 2009 and was submitted by the government that was installed following the general elections of 20 February 2005. It was approved by the government on 2 June in accordance with the Portuguese domestic procedures (Law on Budgetary Stability), and discussed by Parliament on 9 June 2005. The Commission services have carried out a technical evaluation of this update, taking into account the results of their own spring 2005 economic forecasts, having regard to the code of conduct[2], the commonly agreed methodology for the estimation of potential output and cyclically-adjusted balances, the recommendations in the broad economic policy guidelines for the period 2003-2005 and the report of the Ecofin Council of 20 March 2005 on ‘Improving the implementation of the Stability and Growth Pact’, endorsed by the European Council on 22 March 2005[3]. This evaluation warrants the following assessment:-  The update complies with the data requirements of the “code of conduct on the content and format of stability and convergence programmes”[4]. However, it does not present projections on the long-term sustainability of the public finances, but instead only refers to a task force set up by the government to assess the long-term sustainability of the social security system.-  The update of the stability programme is built around the need to correct a government deficit which at 6.2% of GDP in 2005 is planned to be well in excess of 3% of GDP. This figure follows a deficit of 2.9% of GDP in years 2002 to 2004, as recently reported by the Portuguese authorities reflecting discussions with Eurostat, and is considerably worse compared with the target of 2.2% of GDP for 2005 in the previous programme update. This deterioration is explained by weaker-than-expected growth, a reassessment of expenditure growth, over-runs compared to the budget and the non-introduction of one-off measures planned in the previous programme[5], as well by a corrective package of some 0.6% of GDP adopted by the new government in June 2005. For the reduction of the deficit, the update outlines a strategy that envisages the implementation of structural measures rather than the reliance on sizeable one-off and temporary measures, which indicates a change with respect to the budgetary strategy outlined in the previous updates. The government deficit is expected to continuously improve over the coming years, but will exceed the 3% of GDP reference value until at least 2007.-  The macroeconomic scenario presented in the programme projects real GDP growth to increase from 1% in 2004 and 0.8% in 2005 to 1.4% in 2006, 2.2% in 2007, 2.6% in 2008 and 3.0% in 2009. This profile is driven by accelerating domestic demand. The external contribution is expected to diverge little from a neutral position, either on the positive or negative side. The growth projections for 2005 and 2006 are slightly below the Commission services’ forecasts, reflecting the most recent developments. For the outer years, the projected GDP growth is clearly above the trend estimated by the Commission services according to the commonly agreed methodology; the output gap will narrow over the programme period, and is expected to be closed by the programme horizon. However, it cannot be excluded that the budgetary consolidation efforts may weigh on growth to a higher degree than implicitly assumed in the programme. On the other hand, the perception that an unsustainable fiscal situation is being addressed may generate favourable confidence effects. Moreover, weak competitiveness against the background of heightened competition on Portuguese export markets may hurt the net contribution of the external sector to growth. The projected acceleration in economic activity therefore hinges on addressing structural deficiencies in productivity and competitiveness, and on the capacity to restore confidence. All in all, in the light of the experience of past years, the growth projections for 2007 to 2009 seem to reflect optimistic assumptions and therefore contain an element of risk. The programme’s projections for inflation for 2005 and 2006 also appear to be on the low side, given the planned increase in indirect taxes.-  The update projects the general government deficit to reach 6.2% of GDP in 2005, following deficit ratios of 2.9% of GDP in both 2003 and 2004[6] (excluding one-off and temporary measures, these ratios would have been 5.4% and 5.2% of GDP respectively). The deficit is projected to decline to 4.8% of GDP in 2006, 3.9% in 2007 and 2.8% in 2008. For 2009, the programme projects a further decline of the deficit ratio to 1.6% of GDP. The primary balance is projected to follow a similar path: -3.3% in 2005, -1.6% in 2006, and -0.5% of GDP in 2007. Primary surpluses of 0.7 and 1.8% of GDP are projected for 2008 and 2009. The programme focuses on measures having medium-term impact and does not rely on sizeable temporary measures as the means to improve the budget balance. Accordingly, the consolidation effort will take place over the entire programme period with front-loading, since a substantial consolidation effort will take place in 2006. Calculations by the Commission services applying the commonly agreed methodology to the information in the programme show the cyclically-adjusted deficit to widen substantially to 5.3% of GDP in 2005 but to decline gradually to 1.4% of GDP in 2009. The detailed projections of revenue and expenditure until 2009 show that consolidation efforts will be helped by both the tax revenue and primary expenditure sides, with a progressive contribution of the focus on the latter. In the early part of the programme period, consolidation is relying mainly on increasing revenues, through higher tax rates (notably an increase in the standard VAT rate from 19% to 21%), lower tax credits and improved tax collection, which partly offset the one-off revenues foregone. In the outer years, the increased contribution from expenditure restraint is foreseen to come from measures of a permanent nature, such as the reform of the public administration, including the containment of the wage bill and changes in the social security retirement schemes, whose budgetary effects will be significant mainly in the medium term. The share of investment in total government expenditure is to decline slightly over the programme period.-  There are several elements of risk weighing on the budgetary projections. First, the acceleration in economic activity, in particular from 2007 onwards, may be slower than expected. Second, the revenue and expenditure trajectories may be less favourable than planned. Indeed, the higher tax rates heighten the risk of tax evasion, and most of the announced restraint on expenditure still needs to be legally implemented. For 2005, the government plans to submit a corrective budget by the end of June. For the outer years, expenditure reforms may nevertheless take longer to implement, and, as result, their short- and medium-term effects may turn out less significant than expected. In the event, the government might be called to fulfil its commitment to take additional measures in order to avoid the deficit exceeding 3% of GDP for longer than planned. Even if the projected path is adhered to, for 2008 and 2009, the budgetary stance in the programme does not provide a sufficient safety margin against breaching the deficit threshold with normal macroeconomic fluctuations. It is also insufficient to ensure that the Stability and Growth Pact’s medium-term objective of a budgetary position of close to balance is achieved by the end of the programme period.-  The debt-to-GDP ratio breached the 60% of GDP reference value of the Treaty in 2003, moving up to 61.9% in 2004. According to the update, after reaching 66.5% of GDP in 2005, the debt ratio will peak in 2007 at 67.8% of GDP, and decrease thereafter to 64.5% in 2009. The evolution of gross debt may turn out less favourable than projected given the risks to economic activity and to the government deficit targets and the likelihood, based on past experience, of debt-increasing stock-flow adjustments, in particular the accumulation of financial assets.-  With regard to the long-term sustainability of the public finances, Portugal appears to be at risk on grounds of the projected budgetary cost of an ageing population. In the absence of further measures, the high deficit and the rising debt-to-GDP ratio will undermine the sustainability of public finances, hence the timely achievement of a budgetary position close to balance is imperative. The structural reforms measures enacted to date, in particular in the areas of pension and health care, should ease the budgetary impact of ageing. However, these reforms do not appear sufficient to ensure sustainability. The reforms outlined in the update, notably on retirement provisions for the civil service, could contribute to this end if implemented thoroughly.-  Overall, the economic policies outlined in the update are partly consistent with the country-specific Broad Economic Policy Guidelines in the area of public finances. As recommended, the programme projects the consolidation of public finances to take place to a large extent from the expenditure side, albeit in a progressive manner, and does not rely on sizeable one-off or temporary measures. Moreover, its projections, if adhered to, imply an improvement in the cyclically-adjusted primary balance (net of one-off and temporary measures) of more than 0.5% of GDP each year. However, the programme does not plan to reduce the deficit below 3% of GDP before 2008, and the planned expenditure restraint will be insufficient to achieve the Stability and Growth Pact’s medium-term objective of a budgetary position of close to balance by the end of the programme period.-  In the light of the deficit and debt figures for 2005 and following years presented in the updated stability programme, the Commission initiated the excessive deficit procedure for Portugal on 22 June. The Council, when deciding on the existence of an excessive deficit in Portugal, will also issue a recommendation for the correction of the excessive deficit; such recommendation will include, inter alia, a deadline for the correction of the excessive deficit.In view of the above assessment, it would be appropriate for Portugal to: (i) limit the deterioration of the fiscal position in 2005, by ensuring rigorous implementation of the announced corrective measures; (ii) achieve a sustained correction of the excessive deficit as soon as possible, taking a substantial step in 2006 followed by a significant decrease each year, and enacting decisively the planned measures to reduce government expenditure; seize any opportunity to accelerate the reduction of the budget deficit, in particular to create margins to deal with the budgetary impact of possible lower-than-projected growth; (iii) bring the gross debt ratio onto a firm downward path, by ensuring that debt developments reflect progress in the reduction of the deficit and avoiding debt-increasing financial transactions;(iv) control the evolution of expenditure, possibly through the announcement of binding ceilings for specific expenditure categories, within a comprehensive reform programme improving the quality and ensuring the long-term sustainability of public finances.(v) further improve the processing of general government data.On the basis of this assessment, the Commission has adopted the attached recommendation for a Council Opinion on the updated stability programme of Portugal and is forwarding it to the Council.Recommendation for aCOUNCIL OPINIONin accordance with Article 5(3) of Council Regulation (EC) No 1466/97 of 7 July 1997 on the updated stability programme of Portugal, 2005-2009THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[7], and in particular Article 5(3) thereof,Having regard to the recommendation of the Commission,After consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:1.  On […], the Council examined the updated stability programme of Portugal, which covers the period 2005 to 2009. The programme complies with the data requirements of the “code of conduct on the content and format of stability and convergence programmes”[8]. However, the programme does not provide projections on the long-term sustainability of public finances. Accordingly, Portugal is invited to achieve full compliance with the data requirements of the code of conduct.2.  The update of the stability programme is built around the need to correct a government deficit which at 6.2% of GDP in 2005 is planned to be well in excess of 3% of GDP. This figure follows a deficit of 2.9% of GDP in years 2002 to 2004, as recently reported by the Portuguese authorities reflecting discussions with Eurostat, and is considerably worse compared with the target of 2.2% of GDP for 2005 in the previous programme update. This deterioration is explained by weaker-than-expected growth, a reassessment of expenditure growth, over-runs compared to the budget and the non-introduction of one-off measures planned in the previous programme, as well by a corrective package of some 0.6% of GDP adopted by the new government in June 2005. For the reduction of the deficit, the update outlines a strategy that envisages the implementation of structural measures rather than the reliance on sizeable one-off and temporary measures, which indicates a change with respect to the budgetary strategy outlined in the previous updates. The government deficit is expected to continuously improve over the coming years, but will exceed the 3% of GDP reference value until at least 2007.3.  The macroeconomic scenario underlying the programme envisages that real GDP growth will progressively pick up from 0.8% in 2005 to 3.0% in 2009, with growth rates of successively 1.4%, 2.2% and 2.6% in the intermediate years. On the basis of current information, the growth projections for the first part of the programme period are plausible, while there are more risks to the programme’s outer years. Structural measures addressing productivity and competitiveness and restoring confidence are essential if the projected growth path is to be realised. The programme’s projections for inflation for 2005 and 2006 appear to be on the low side, given the planned increase in indirect taxes.4.  The programme aims at reaching a government deficit below the 3% of GDP reference value by 2008. The government deficit ratio is expected to decline from 6.2% of GDP in 2005 to 4.8% in 2006, 3.9% in 2007, 2.8% in 2008 and 1.6% in 2009. Calculations by the Commission services applying the commonly agreed methodology to the information in the programme show that the cyclically-adjusted deficit, after widening to 5.3% of GDP in 2005, will decline progressively to 1.4% in 2009. The consolidation effort will extend over the entire programme period with front-loading, since a substantial consolidation effort will take place in 2006. In the early part of the programme period, consolidation is relying mainly on increasing revenues, through higher tax rates (notably an increase in the standard VAT rate from 19% to 21%), lower tax credits and improved tax collection, which partly offset the one-off revenues foregone. In the outer years, the increased contribution from expenditure restraint is foreseen to come from measures of a permanent nature, such as the reform of the public administration, containment of the wage bill and changes in the social security retirement schemes, whose budgetary effects will be significant mainly in the medium term. The share of investment in total government expenditure is to decline slightly over the programme period.5.  The budgetary outcome as projected in the programme is subject to several risks. First, the acceleration in economic activity may be slower than expected, depending on the effective impact of the fiscal consolidation measures and given the expected increase in international competition in the Portuguese export markets. Second, the revenue-raising and expenditure-restraining measures may be less effective than projected or take longer to produce the desired results. The higher tax rates heighten the risk of tax evasion, and most of the announced restraint on expenditure still needs to be legally implemented. In view of this assessment, the government might be called to fulfil its commitment to take additional measures in order to avoid the deficit exceeding 3% of GDP for longer than planned. Moreover, even if the projected path is adhered to, the budgetary stance in the programme does not provide a sufficient safety margin against breaching the deficit ceiling with normal macroeconomic fluctuations until at least 2009. It is also insufficient to ensure that the Stability and Growth Pact’s medium-term objective of a budgetary position of close to balance is achieved within the programme horizon. A sensitivity analysis shows that the deficit would still be at 3%, or very close to it, in 2009, in the event of unfavourable macroeconomic developments.6.  The debt-to-GDP ratio breached the 60% of GDP reference value of the Treaty in 2003, moving up to 61.9% in 2004. According to the update, after reaching 66.5% of GDP in 2005, it will peak at 67.8% of GDP, declining thereafter until it reaches 64.5% in 2009. The evolution of the gross debt ratio may also turn out less favourable than projected, given the risks to economic activity, the budgetary targets and the likelihood, based on past experience, of debt-increasing stock-flow adjustments, in particular the accumulation of financial assets.7.  With regard to the long-term sustainability of the public finances, Portugal appears to be at risk on grounds of the projected budgetary cost of an ageing population. The structural reform measures enacted to date, in particular in the areas of pension and health care, should ease the budgetary impact of ageing. However, these reforms do not appear sufficient to ensure sustainability. The reforms outlined in the update, notably on retirement provisions for the civil service, could contribute to this end if implemented thoroughly. The government has commissioned a report to assess the long-term sustainability of the social security system.8.  Overall, the economic policies outlined in the update are partly consistent with the country-specific Broad Economic Policy Guidelines in the area of public finances. As recommended, the programme projects the consolidation of public finances to take place to a large extent from the expenditure side and does not rely on sizeable one-off or temporary measures. Its projections, if adhered to, also imply an improvement in the cyclically-adjusted primary balance (net of one-off and temporary measures) by more than 0.5% of GDP each year. However, it does not plan to reduce the deficit below 3% of GDP before 2008, and the planned expenditure restraint will be insufficient to achieve the medium-term objective of the Stability and Growth Pact of a budgetary position of close to balance by the end of the programme period.9.  In the light of the deficit and debt figures for 2005 and following years presented in the updated stability programme, the Commission initiated the excessive deficit procedure for Portugal on 22 June. The Council, when deciding on the existence of an excessive deficit in Portugal, will also issue a recommendation for the correction of the excessive deficit; such recommendation will include, inter alia , a deadline for the correction of the excessive deficit.* * *In view of the above assessment, the Council is of the opinion that Portugal should:(i) limit the deterioration of the fiscal position in 2005, by ensuring rigorous implementation of the announced corrective measures;(ii) achieve a sustained correction of the excessive deficit as soon as possible, taking a substantial step in 2006 followed by a significant decrease each year, and enacting decisively the planned measures to reduce government expenditure; seize any opportunity to accelerate the reduction of the budget deficit, in particular to create margins to deal with the budgetary impact of possible lower-than-projected growth;(iii) bring the gross debt ratio onto a firm downward path, by ensuring that debt developments reflect progress in the reduction of the deficit and avoiding debt-increasing financial transactions;(iv) control the evolution of expenditure, possibly through the announcement of binding ceilings for specific expenditure categories, within a comprehensive reform programme improving the quality and ensuring the long-term sustainability of public finances.(v) further improve the processing of general government data.Comparison of key macroeconomic and budgetary projections2004 | 2005 | 2006 | 2007 | 2008 | 2009 |[1] OJ L 209, 2.8.1997. All the documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm[2] Revised Opinion of the Economic and Financial Committee on the content and format of stability and convergence programmes, endorsed by the ECOFIN Council on 10.7.2001.[3] See Presidency conclusions of the Brussels European Council of 22 and 23 March 2005 (7619/05) and the (Ecofin) Council report to the European Council of 20 March 2005 (7423/05).[4] The Portuguese authorities had submitted an updated programme in December 2004, thereby complying with the formally required date of submission. However, in view of the upcoming general elections in Portugal, it it was at the time decided not to assess that programme, but to wait for the update to be presented by the new government.[5] The government which came into office in March 2005 entrusted an ad-hoc commission under the overall responsibility of the Central Bank Governor with the assessment of the state of government finances for 2005. In mid-May, the commission presented its findings, projecting for 2005 at unchanged policies a deficit of 6.8% of GDP.[6] In its news release No 34/2005 of 18 March 2005, Eurostat communicated the existence of “ongoing discussions between Eurostat and Portugal on the consistency between accrual and cash-based data provided by Portugal, for the period 2001-2004.” Subsequent information provided by the Portuguese authorities indicate small upward revisions for the years 2000, 2002 and 2003, yielding deficit ratios of 2.9% of GDP for each of these years. Eurostat is currently reviewing these revisions.[7] OJ L 209, 2.8.1997, p. 1. The documents referred to in this text can be found at the following website: http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm[8] The Portuguese authorities had submitted an updated programme in December 2004, thereby complying with the formally required date of submission. However, in view of the upcoming general elections in Portugal, it was at the time decided not to assess that programme, but to wait for the update to be presented by the new government.


title: Commission Recommendation of  18 January 2006  concerning a coordinated Community monitoring programme for 2006 to ensure compliance with maximum levels of pesticide residues in and on cereals and certain other products of plant origin and national monitoring programmes for 2007  (notified under document number C(2006) 11)   (Text with EEA relevance)

text:
               24.1.2006

               EN

               Official Journal of the European Union

               L 19/23

      COMMISSION RECOMMENDATION

   of 18 January 2006
   concerning a coordinated Community monitoring programme for 2006 to ensure compliance with maximum levels of pesticide residues in and on cereals and certain other products of plant origin and national monitoring programmes for 2007
   (notified under document number C(2006) 11)
   (Text with EEA relevance)
   (2006/26/EC)
   THE COMMISSION OF THE EUROPEAN COMMUNITIES,
   Having regard to the Treaty establishing the European Community, and in particular Article 211 thereof,
   Having regard to Council Directive 86/362/EEC of 24 July 1986 on the fixing of maximum levels for pesticide residues in and on cereals (1) and in particular Article 7(2)(b) thereof,
   Having regard to Council Directive 90/642/EEC of 27 November 1990 on the fixing of maximum levels for pesticide residues in and on certain products of plant origin, including fruit and vegetables (2), and in particular Article 4(2)(b) thereof,
   Whereas:

               (1)

               Directives 86/362/EEC and 90/642/EEC provide that the Commission should progressively work towards a system which would permit the estimation of dietary exposure to pesticides. To make realistic estimations possible, data on the monitoring of pesticide residues should be available in a number of food products which constitute major components of the European diet. It is generally recognised that major components of the European diet are constituted by some 20 to 30 food products. In view of the resources available at national level for pesticide residue monitoring, Member States are only able to analyse samples of eight products each year within a coordinated monitoring programme. Pesticide uses show changes within the timescale of three-year cycles. Each pesticide should thus generally be monitored in 20 to 30 food products over a series of three-year cycles.

               (2)

               Residues of the pesticides covered by this Recommendation should be monitored in 2006, as this will allow using these data for the estimation of actual dietary exposure to them.

               (3)

               A systematic statistical approach to numbers of samples to be taken in each coordinated monitoring exercise is necessary. Such an approach has been set out by the Codex Alimentarius Commission (3). On the basis of a binomial probability distribution, it can be calculated that examination of 613 samples allows with a certainty of more than 99 %, the detection of a sample containing pesticide residues above the limit of determination (LOD), provided that less than 1 % of products of plant origin contain residues above that limit. Collection of these samples should be apportioned between Member States on the basis of population and consumer numbers, with a minimum of 12 samples per product and per year.

               (4)

               Guidelines concerning ‘Quality Control Procedures for Pesticide Residue Analysis’ are published on the Commission website (4). It is agreed that these guidelines should be applied as far as possible by the analytical laboratories of the Member States and should be reviewed continuously in the light of experience gained in the monitoring programmes.

               (5)

               Commission Directive 2002/63/EC establishes Community methods of sampling for the official control of pesticide residues in and on products of plant and animal origin and repealing Directive 79/700/EEC (5). The sampling methods and procedures laid down in this Directive incorporate those recommended by the Codex Alimentarius Commission.

               (6)

               Directives 86/362/EEC and 90/642/EEC require Member States to specify the criteria applied in drawing up their national inspection programmes. Such information should include the criteria applied in determining the numbers of samples to be taken and analyses to be carried out and the reporting levels applied, the criteria by which the reporting levels have been fixed and details of accreditation under the Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004, animal health and animal welfare rules on official controls performed to ensure the verification of compliance with feed and food law (6). The number and type of infringements and the action taken should also be indicated.

               (7)

               Maximum residue levels for baby food have been established in accordance with Article 6 of Commission Directive 91/321/EEC of 14 May 1991 on infant formulae and follow-on formulae (7) and Article 6 of Commission Directive 96/5/EC, Euratom of 16 February 1996 on processed cereal-based foods and baby foods for infants and young children (8).

               (8)

               Information on the results of monitoring programmes is particularly appropriate for treatment, storage and transmission by electronic/informatics methods. Formats have been developed for supply of data by e-mail from the Member States. Member States should therefore be able to send their reports to the Commission in the standard format. The further development of such a standard format is most effectively undertaken by the development of guidelines by the Commission.

               (9)

               The measures provided for in this recommendation are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health,

         HEREBY RECOMMENDS:

               1.

               Member States are invited, during the year 2006, to take and analyse samples for the product/pesticide residue combinations set out in Annex I, on the basis of the number of samples of each product allocated to them in Annex II, reflecting as appropriate, national, Community and third country share of the Member State's market.
               The sampling procedure, including the number of units, should be in line with Commission Directive 2002/63/EC.

               2.

               For pesticides posing an acute risk i.e. where an ARfD is set (e.g. OP-esters, endosulfan and N-methylcarbamates) sampling should be done in such a way to allow the selection of two laboratory samples. If the first laboratory sample contains a detectable residue of a targeted pesticide, the units of the second sample should be analysed individually. This applies to the following products:

                           —

                           Aubergines

                           —

                           Grapes (9)

                           —

                           Bananas

                           —

                           Pepper

                     Of these products a reasonable number of samples should also be subjected to individual analysis of the individual units within the second laboratory sample in case such pesticides are detected in the first sample and particularly if it is the produce of a single producer.

               3.

               Of the total amount of samples as given according to Annex I and II, each Member State should take and analyse:

                           (a)

                           at least ten samples of baby food based mainly on vegetables, fruits or cereals;

                           (b)

                           a number of samples (with a minimum of one sample, where available) from produce originating from organic farming that reflects the market share of organic produce in each Member State.

               4.

               Member States are invited to report the results of the analysis of samples tested for the product/pesticide residue combinations set out in Annex I by 31 August 2007 at the latest, indicating:

                           (a)

                           The analytical methods used and reporting levels achieved, in accordance with the quality control procedures set out in the Quality Control Procedures for Pesticide Residue Analysis;

                           (b)

                           The number and type of infringements and the action taken.

               5.

               The report should be produced in a format — including the electronic format — conforming to the guidance to the Member States with regard to implementation of Commission recommendations concerning coordinated Community monitoring programmes provided by the Standing Committee on the Food Chain and Animal Health.
               The result on samples of baby food and on samples taken from produce originating from organic farming should be reported in separate datasheets.

               6.

               Member States are invited to send to the Commission and to the other Member States, by 31 August 2006 at the latest, the information required under Article 7(3) of Directive 86/362/EEC and Article 4(3) of Directive 90/642/EEC concerning the 2005 monitoring exercise to ensure, at least by check sampling, compliance with maximum pesticide residue levels including:

                           (a)

                           The results of their national programmes concerning pesticide residues;

                           (b)

                           Information on their laboratories quality control procedures and, in particular, information concerning aspects of the guidelines concerning Quality Control Procedures for Pesticide Residue Analysis which they have not been able to apply or have had difficulty in applying;

                           (c)

                           Information on accreditation in accordance with the provisions of Article 12 of Regulation (EC) No 882/2004 (including scope of the accreditation, accreditation body and copy of accreditation certificate) of the laboratories carrying out the analyses;

                           (d)

                           Information about the proficiency tests and ring tests in which the laboratory has participated.

               7.

               Member States are invited to send to the Commission, by 30 September 2006 at the latest, their intended national programme for monitoring maximum pesticide residue levels fixed by Directives 90/642/EEC and 86/362/EEC for the year 2007, including information on:

                           (a)

                           The criteria applied in determining the number of samples to be taken and analyses to be carried out,

                           (b)

                           The reporting levels applied and the criteria by which the reporting levels have been fixed, and

                           (c)

                           Details of accreditation, under Regulation (EC) No 882/2004, of the laboratories carrying out analyses.

      Done at Brussels, 18 January 2006.

            For the Commission

         Markos KYPRIANOU

            Member of the Commission

      (1)  OJ L 221, 7.8.1986, p. 37. Directive as last amended by Commission Directive 2005/76/EC (OJ L 293, 9.11.2005, p. 14).

      (2)  OJ L 350, 14.12.1990, p. 71. Directive as last amended by Directive 2005/76/EC.

      (3)  Codex Alimentarius, Pesticide Residues in Foodstuffs, Rome 1994, ISBN 92-5-203271-1; Vol. 2, p. 372.

      (4)  Document number SANCO/10476/2003, http://europa.eu.int/comm/food/plant/protection/resources/qualcontrol_en.pdf

      (5)  OJ L 187, 16.7.2002, p. 30.

      (6)  OJ L 165, 30.4.2004, p. 1, corrected by OJ L 191, 28.5.2004, p. 1.

      (7)  OJ L 175, 4.7.1991, p. 35. Directive as last amended by Directive 2003/14/EC (OJ L 41, 14.2.2003, p. 37).

      (8)  OJ L 49, 28.2.1996, p. 17. Directive as last amended by Directive 2003/13/EC (OJ L 41, 14.2.2003, p. 33).

      (9)  For grapes the unit (i.e. standard bunch) is considered to have a size of about 500 g.

      ANNEX I
      PESTICIDE/PRODUCT COMBINATIONS TO BE MONITORED

                  Pesticide residue to be analysed for

                  2006

                  2007 (1)

                  2008 (1)

                  Acephate

                  (b)

                  (c)

                  (a)

                  Acetamiprid

                  (c)

                  (a)

                  Aldicarb

                  (b)

                  (c)

                  (a)

                  Azinphos-methyl

                  (b)

                  (c)

                  (a)

                  Azoxystrobin

                  (b)

                  (c)

                  (a)

                  Benomyl group

                  (b)

                  (c)

                  (a)

                  Bifenthrin

                  (b)

                  (c)

                  (a)

                  Bromopropylate

                  (b)

                  (c)

                  (a)

                  Bupirimate

                  (b)

                  (c)

                  (a)

                  Buprofezin

                  (c)

                  (a)

                  Captan + Folpet
                  Captan
                  Folpet

                  (b)

                  (c)

                  (a)

                  Carbaryl

                  (b)

                  (c)

                  (a)

                  Chlormequat (2)

                  (b)

                  (c)

                  (a)

                  Chlorothalonil

                  (b)

                  (c)

                  (a)

                  Chlorpropham

                  (b)

                  (c)

                  (a)

                  Chlorpyriphos

                  (b)

                  (c)

                  (a)

                  Chlorpyriphos-methyl

                  (b)

                  (c)

                  (a)

                  Cypermethrin

                  (b)

                  (c)

                  (a)

                  Cyprodinil

                  (b)

                  (c)

                  (a)

                  Deltamethrin

                  (b)

                  (c)

                  (a)

                  Diazinon

                  (b)

                  (c)

                  (a)

                  Dichlofluanid

                  (b)

                  (c)

                  (a)

                  Dichlorvos

                  (c)

                  (a)

                  Dicofol

                  (b)

                  (c)

                  (a)

                  Dimethoate + Omethoate
                  Dimethoate
                  Omethoate

                  (b)

                  (c)

                  (a)

                  Diphenylamine

                  (b)

                  (c)

                  (a)

                  Endosulfan

                  (b)

                  (c)

                  (a)

                  Fenhexamid

                  (b)

                  (c)

                  (a)

                  Fenitrothion

                  (c)

                  (a)

                  Fludioxonil

                  (b)

                  (c)

                  (a)

                  Hexythiazox

                  (c)

                  (a)

                  Imazalil

                  (b)

                  (c)

                  (a)

                  Imidacloprid

                  (b)

                  (c)

                  (a)

                  Indoxacarb

                  (c)

                  (a)

                  Iprodione

                  (b)

                  (c)

                  (a)

                  Iprovalicarb

                  (c)

                  (a)

                  Kresoxim-methyl

                  (b)

                  (c)

                  (a)

                  Lambda-cyhalothrin

                  (b)

                  (c)

                  (a)

                  Malathion

                  (b)

                  (c)

                  (a)

                  Maneb group

                  (b)

                  (c)

                  (a)

                  Mepanipyrim

                  (c)

                  (a)

                  Metalaxyl

                  (b)

                  (c)

                  (a)

                  Methamidophos

                  (b)

                  (c)

                  (a)

                  Methidathion

                  (b)

                  (c)

                  (a)

                  Methiocarb

                  (b)

                  (c)

                  (a)

                  Methomyl

                  (b)

                  (c)

                  (a)

                  Myclobutanil

                  (b)

                  (c)

                  (a)

                  Oxydemeton-methyl

                  (b)

                  (c)

                  (a)

                  Parathion

                  (b)

                  (c)

                  (a)

                  Penconazole

                  (c)

                  (a)

                  Phosalone

                  (b)

                  (c)

                  (a)

                  Pirimicarb

                  (b)

                  (c)

                  (a)

                  Pirimiphos-methyl

                  (b)

                  (c)

                  (a)

                  Prochloraz

                  (c)

                  (a)

                  Procymidone

                  (b)

                  (c)

                  (a)

                  Profenofos

                  (c)

                  (a)

                  Propargite

                  (b)

                  (c)

                  (a)

                  Pyretrins

                  (b)

                  (c)

                  (a)

                  Pyrimethanil

                  (b)

                  (c)

                  (a)

                  Pyriproxyfen

                  (c)

                  (a)

                  Quenoxifen

                  (c)

                  (a)

                  Spiroxamine

                  (b)

                  (c)

                  (a)

                  Tebuconazole

                  (c)

                  (a)

                  Tebufenozide

                  (c)

                  (a)

                  Thiabendazole

                  (b)

                  (c)

                  (a)

                  Tolcloflos-methyl

                  (b)

                  (c)

                  (a)

                  Tolylfluanid

                  (b)

                  (c)

                  (a)

                  Triademefon + Triadimenol
                  Triademefon
                  Triadimenol

                  (b)

                  (c)

                  (a)

                  Vinclozolin

                  (b)

                  (c)

                  (a)

                              (a)

                              Beans (fresh or frozen), carrots, cucumber, oranges or mandarins, pears, potatoes, rice, spinach (fresh or frozen).

                              (b)

                              Aubergines, bananas, cauliflower, grapes, orange juice (), peas (fresh/frozen, without pod), peppers (sweet), wheat.

                              (c)

                              Apples, head cabbage, leek, lettuce tomatoes, peaches including nectarines and similar hybrids; rye or oats, strawberries.

         (1)  Indicative for 2007 and 2008, subject to programmes which will be recommended for these years.

         (2)  Chlormequat should be analysed in cereals, carrots, fruiting vegetables and pears.

         (3)  For orange juice Member States should specify the source (concentrates or fresh fruits).

      ANNEX II
      Number of samples of each product to be taken and analysed by each Member State.

                  Code country

                  Samples

                  AT

                  12 (1)

                  15 (2)

                  BE

                  12 (1)

                  15 (2)

                  CY

                  12 (1)

                  15 (2)

                  CZ

                  12 (1)

                  15 (2)

                  DE

                  93

                  DK

                  12 (1)

                  15 (2)

                  ES

                  45

                  EE

                  12 (1)

                  15 (2)

                  EL

                  12 (1)

                  15 (2)

                  FR

                  66

                  FI

                  12 (1)

                  15 (2)

                  HU

                  12 (1)

                  15 (2)

                  IT

                  65

                  IE

                  12 (1)

                  15 (2)

                  LU

                  12 (1)

                  15 (2)

                  LT

                  12 (1)

                  15 (2)

                  LV

                  12 (1)

                  15 (2)

                  MT

                  12 (1)

                  15 (2)

                  NL

                  17

                  PT

                  12 (1)

                  15 (2)

                  PL

                  45

                  SE

                  12 (1)

                  15 (2)

                  SI

                  12 (1)

                  15 (2)

                  SK

                  12 (1)

                  15 (2)

                  UK

                  66

                     Total minimum number of samples: 613

         (1)  Minimum number of samples for each single residue method applied.

         (2)  Minimum number of samples for each multi-residue method applied.


Avis juridique important

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31996Y0919(08)

Council Recommendation of 24 July 1995 on the guiding principles to be followed in drawing up protocols on the implementation of readmission agreements

Official Journal C 274 , 19/09/1996 P. 0025 - 0033

ANNEX II.3COUNCIL RECOMMENDATION of 24 July 1995 on the  guiding principles to be followed in drawing up protocols on the implementation of readmission  agreements THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on European Union, and in particular Article K.1 (3) thereof, Recalling that the Council has adopted a recommendation concerning a specimen bilateral readmission  agreement between a Member State and a third Country (1); Whereas such readmission agreements are often accompanied by protocols laying down certain  technical details for their implementation; whereas a series of guiding principles should therefore  be adopted for Member States to use as a basis when negotiating such protocols; RECOMMENDS that, as from 1 July 1995, the Member States should use the following  guiding principles as a basis for negotiations with third countries when drawing up protocols on  implementing readmission agreements. I. Readmission procedures 1. Common forms For the return/readmission of persons residing without authorization, it is recommended that  provision be made for the Contracting Parties to use common forms. The forms concerned are as  follows: - record of the return/readmission of a person under the simplified procedure, - request for the readmission/transit of a person, - record of the return/readmission of a person. Member States could use the three documents annexed hereto as a basis for drawing up such forms,  incorporating the relevant headings from them according to the specific nature of relations with  the third country party to the agreement and the resulting information requirements. The need for simplicity and speed should be the prime concern. 2. Return/readmission under the simplified procedure Persons apprehended in a border area are to be returned/readmitted under the simplified procedure. A provision allowing this should therefore be included in the protocol. The Contracting Parties will determine the total time taken by the simplified readmission procedure  (comprising the submission and answering of all requests), which should in any event be very short.  Member States may take as a basis agreements already signed by some of them in which that time does  not exceed 48 hours. Formalities for the return of a person should be simplified in the case of this procedure.  Notification of the return would be given in any form (by telephone, fax, telex or orally) and it  would be carried out directly by the local border authorities. If necessary, a record (see I.1) may be drawn up. 3. Return/readmission under the normal procedure This procedure is applicable where a person cannot be returned or readmitted under the simplified  procedure. The readmission request should be made and the answer given in writing. The Parties could take as a  basis the document annexed hereto. Answers should be compulsory and be given within a short time determined by the Parties. In  accordance with the specimen draft bilateral agreement, the time in question must not exceed 15  days. However, it would be desirable for Member States to take as a basis agreements already signed  in which this time is shorter. II. Means of identifying persons to be readmitted 1. Effect of proof or a presumption Proof produced of nationality and entry should have to be accepted by the Parties without further  investigation. A presumption established of nationality and entry should be deemed accepted by the Parties unless  the requested party proves otherwise. 2. Proof or a presumption of nationality or of entry via an external frontier The protocol should clearly lay down the means of proving or establishing a presumption of  nationality. Nationality may be proved by means of: - nationality papers which can be definitely ascribed to a particular person, - any type of passport (national, diplomatic or official duty passport or officially issued  passport substitutes with a photograph) or any other travel document indicating nationality, - consular registration cards, - identity cards (even if provisional or temporary), - a minor's travel document in lieu of passport, - provisional identity papers, - service record books and military passes. A presumption of nationality may be established in particular by means of: - specific information from the official authorities, - an official service pass, - a company pass, - a driving licence, - an extract from register office records, - a seaman's book, - a bargeman's identity document, - photocopies of any of the above documents, - statements by witnesses, - particulars supplied by the person concerned, - the language of the person concerned. The protocol should also clearly lay down the means of proving or establishing a presumption of  entry via an external frontier, under Article 2 of the specimen readmission agreement. Entry via an external frontier may be proved by means of: - an entry stamp or equivalent entry in a travel document, - an exit stamp of a State adjacent to a Member State, taking into account the travel route and the  date of the frontier crossing, - an entry stamp in a false or falsified passport, - travel tickets which can formally establish entry across an external frontier, - fingerprints taken by authorities at the time of crossing an external frontier. A presumption of entry via an external frontier may be established in particular by means of: - statements by the person to be transferred, - statements by officials and other persons, - fingerprints other than those taken by the authorities at the time of crossing an external  frontier, - travel tickets, - hotel bills, - cards for access to public or private amenities in the Member States, - appointment cards for doctors, dentists etc., - data showing that the person to be transferred has used the services of a facilitator or travel  agency. III. Designation of the competent authorities The protocol should stipulate that Ministers with responsibility for border controls are to  designate the border posts which may be used for aliens' readmission and entry in transit and the  central or local authorities competent to deal with readmission and transit requests. The choice should be geared to efficiency and speed. IV. Conditions for transit of third-country nationals under escort In their relations with third-country Contracting Parties, Member States could make provision for  the use of a readmission/transit form for requests for transit under escort in accordance with  Article 7 of the specimen readmission agreement. They could use the appropriate form annexed hereto  as a basis. However, the parties could dispense with such formalities for the transit of a third-country  national being repatriated by one of the Contracting Parties via an airport in the other  Contracting Party. In that event, the competent authority of the requesting party would notify the  competent authority of the other party in good time of the intended repatriation, informing it of  the identity of the person concerned, the flight details and the particulars of any official  escorts. V. Data protection An article on data protection could be inserted; its content will largely depend on the legislation  in force within Member States. It should in any event be stipulated that information must be supplied only for the purposes for  which the agreement has been concluded. VI. Conditions of applicability of the protocol It should be stipulated that the protocol is to enter into force at the same time as the  readmission agreement, that its application is to be suspended upon suspension of the agreement's  application and that it will cease to be applicable once the agreement is no longer applicable. Annex 1 to Annex II.3 (*) RECORD of the return/readmission of a person under the  simplified procedure >START OF GRAPHIC>1. On ......................... (date) at  .................... (time) in . (place) the following person was transferred to . (Name of readmitting country) Forename and surname: . Date and place of birth: . Place of residence (. . .): . Nationality: . Identity established on the basis of: . . . (Designation, series and number of document; when, where and by whom issued; other means of  establishing identity if any) 2. Time, place, manner and motive of illegal entry . . . . (Brief description of the act) 3. Other reasons for transfer (applies to nationals of the Contracting Parties) . . . 4. Evidence or circumstances substantiating presumption of illegal entry . . . 5. Documents, money and other items to be transferred with the transferee . . . 6. Minors (. . .) to be transferred together with the person referred to in point 1 (Forename,  surname, date of birth) . . . (*) Where space is insufficient write on separate sheets and list them in point 7.7. Annexes: (a) . (b) . (c) . (d) . (e) . This record was drafted in . copies in the . language(s) . . . . . Forename, surname and position of the transferring official Forename, surname and position of the receiving official . . (Signature) (Signature) >END OF GRAPHIC>Annex 2 to Annex II.3 >START OF GRAPHIC>From: . . (Place and date) . (Designation of requesting authority) Reference . To: . . (Designation of receiving authority) REQUEST FOR READMISSION/TRANSIT OF A PERSON 1. Personal details 1.1. Surname: . 1.2. Forenames: . 1.3. Maiden name: . 1.4. Also known as: . 1.5. Nationality: ....................................... Language: . 1.6. Date of birth: .............................. 1.7. Place of birth: . 1.8. Residence in country of departure: . 1.9. Designation and number of international travel document, by whom issued, expiry date: . 2. Circumstances of entry into the transferring State 2.1. Date and time of entry: . 2.2. Place: . 2.3. Circumstances of entry (in detail): . . . . 3. Stay in receiving State: . 3.1. Date and time of entry: . 3.2. Place of entry: . 3.3. Duration of stay: . 3.4. Place of stay: . 3.5. Route to frontier: . . . . . . . 3.6. Proof or grounds for presumption that a person not meeting or no longer meeting entry or  residence requirements (illegal entry) entered via the external frontier: . . . . . . 4. Special circumstances relating to the transferee: . 4.1. Interpreter required for (indicate language): . 4.2. Accompanying items (documents, cash, etc.): . . 4.3. Indication of particularly dangerous person: (e. g. suspected of a serious offence, aggressive  behaviour): . . 4.4. State of health: (possible reference to special medical care): . . 4.5. Minors (. . .) being transferred together with the person referred to in point 1 (forenames,  surname and date of birth): . . . . 4.6. Applications submitted to the competent authorities of the requesting State by the transferee  and position of the competent authority, including any applications for recognition of refugee  status or right of asylum: . . . 5. Transit: (1) 5.1. Is the person to be admitted in transit? . 5.2. State of destination: . 5.3. Possible additional transit States . . 5.4. Admission guaraneed in any transit States and the States of destination: Yes/No (Underline whichever applies) 5.5. Is direct repatriation of the person to the country of origin possible? Yes/No (Underline whichever applies) 6. Proposed place, date and time of transfer . . . 7. Annexes . . 8. Confirmation of receipt of request (place, date, signature) . . . (Signature) >END OF GRAPHIC>Annex 3 to Annex II.3 RECORD OF THE RETURN/READMISSION OF A PERSON >START OF  GRAPHIC>Place of transfer . Time and date of transfer . Returning authority . Readmitting authority . In response to the request submitted on . (Date) by . the person(s) listed below was/were readmitted by (Returning State) . (Readmitting State) 1. . (Surname, forename(s)) (Date of birth) 2. . (Surname, forename(s)) (Date of birth) 3. . (Surname, forename(s)) (Date of birth) 4. . (Surname, forename(s)) (Date of birth) 5. . (Surname, forename(s)) (Date of birth) The following Annexes were handed over: 1. . 2. . 3. . 4. . 5. . Remarks: . . (Forename(s), surname and position of returning official) (Forename(s), surname and position of  readmitting official) . (Signature) (Signature) >END OF GRAPHIC>(1) See page 20 of this Official Journal. (1) In matters of transit, particular attention must be paid to the recommendation regarding  transit for the purposes of expulsion adopted by Ministers in 1992 (OJ No C 5, 10. 1. 1996, p. 5),  above all with respect to the protection of human rights.


title: Recommendation for a Council opinion in accordance with the first paragraph of Article 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 on the stability programme of Slovenia, 2006-2009

text:
Important legal notice

|

52007SC0069

Recommendation for a Council opinion in accordance with the first paragraph of Article 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the stability programme of Slovenia, 2006-2009  /* SEC/2007/0069 final */

	[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |Brussels, 23.1.2007SEC(2007) 69 finalRecommendation for aCOUNCIL OPINIONin accordance with the first paragraph of Article 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the stability programme of Slovenia, 2006-2009(presented by the Commission)EXPLANATORY MEMORANDUM1. GENERAL BACKGROUNDThe Stability and Growth Pact, which entered into force on 1 July 1998, is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth conducive to employment creation. The 2005 reform of the Pact acknowledged its usefulness in anchoring fiscal discipline but sought to strengthen its effectiveness and economic underpinnings as well as to safeguard the sustainability of the public finances in the long run.Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[1], which is part of the Stability and Growth Pact, stipulates that Member States have to submit, to the Council and the Commission, stability or convergence programmes and annual updates thereof (Member States that have already adopted the single currency submit (updated) stability programmes and Member States that have not yet adopted it submit (updated) convergence programmes). The first convergence programme of Slovenia was submitted in May 2004. In accordance with the Regulation, the Council delivered an opinion on it on 5 July 2004 on the basis of a recommendation from the Commission and after having consulted the Economic and Financial Committee. In accordance with the same procedure, updated stability and convergence programmes are assessed by the Commission and examined by the Committee mentioned above, while the Council may examine them.2. BACKGROUND FOR THE ASSESSMENT OF THE NEW PROGRAMMEThe Commission has examined the first stability programme of Slovenia[2] submitted on 7 December 2006, and has adopted a recommendation for a Council opinion on it (see box for the main points of the assessment).In order to set the scene against which the budgetary strategy in the stability programme is assessed, the following paragraphs summarise:1.  the economic and budgetary performance over the last ten years2.  the most recent assessment of the country’s position under the preventive arm of the Stability and Growth Pact (summary of the Council opinion on the last update of the convergence programme) and3.  the Commission’s assessment of the October 2006 national reform programme.2.1. Recent economic and budgetary performanceOver the last decade, the Slovene economy has been remarkably stable. The absence of any major imbalances testifies to the strength of the economy and soundness to deal with economic shocks. However, the introduction of the euro will put the robustness and flexibility of markets to the test. In particular, inflation was brought down, but price developments need to be closely monitored although wage pressures are expected to stay contained based on the recent pay agreements for both the public and the private sector. The labour market developments have generally been positive but a few structural shortcomings remain, as evidenced, in particular, by low employment of older workers. Job creation could have benefited from further measures to improve the business environment, encourage R&D activities and foster active ageing.2.2. The assessment in the Council opinion on the previous programmeOn 14 February 2006, the Council adopted its opinion on the last update of the convergence programme, covering the period 2005-2008. The Council was of the opinion that “the programme aims at containing inflation close to the EU average while projecting a gradual fiscal adjustment path”. The Council invited Slovenia to “make a more rapid progress towards achieving the programme’s MTO, especially by implementing the measures underlying the planned reduction of the expenditure ratio as well as by frontloading the adjustment effort” and to “undertake measures to improve the long-term sustainability of the public finances, particularly in relation to the pension system”.2.3. The Commission assessment of the October 2006 national reform programmeThe implementation report of the National Reform Programme of Slovenia, provided in the context of the renewed Lisbon strategy for growth and jobs, was submitted on 16 October 2006. Slovenia's national reform programme gears policies toward five key challenges: a competitive economy and faster growth; a knowledge-based society; an efficient state; a modern social state and higher employment; and sustainable development.The Commission’s assessment of the recent update of this programme (adopted as part of its December 2006 annual Progress Report[3]) showed that Slovenia is making good progress in implementing its National Reform Programme. Benefiting from relatively favourable macroeconomic conditions, Slovenia has taken appropriate measures in some key areas such as entrepreneurship and better regulation and has launched most of the major reforms of employment policies. However, progress on the implementation of the active ageing strategy and on the removal of barriers to youth employment has so far not been rapid enough. In the microeconomic area, stronger measures would be needed to enhance the innovation and competition framework. Greater effort would also be desirable also as regards restructuring public expenditure.Against the background of strengths and weaknesses identified, Slovenia was recommended to take action in the areas of: long-term sustainability of public finances, in particular with regard to strengthening the pension system and increasing employment of older workers, as well as employment services in relation with flexible contractual arrangements and increased conditionality of benefits.Box: Main points of the assessment As required by Article 5(1) (for stability programmes) and Article 9(1) (for convergence programmes) of Council Regulation (EC) No 1466/97, the assessment covers the following points: whether the economic assumptions on which the programme is based are plausible; the medium-term budgetary objective (MTO) presented by the Member State and whether the adjustment path towards it is appropriate; whether measures being taken and/or proposed to respect that adjustment path are sufficient to achieve the MTO over the cycle; when assessing the adjustment path towards the MTO, whether a higher adjustment effort is made in economic good times, whereas the effort may be more limited in economic bad times, and, for euro-area and ERM II Member States, whether the Member State pursues an annual improvement of the cyclically-adjusted balance, net of one-off and other temporary measures, of 0.5% of GDP as a benchmark to meet its MTO; when defining the adjustment path to the MTO (for Member States that have not yet reached it) or allowing a temporary deviation from the MTO (for Member States that have), the implementation of major structural reforms which have direct long-term cost-saving effects (including by raising potential growth) and therefore a verifiable impact on the long-term sustainability of public finances (subject to the condition that an appropriate safety margin with respect to the 3% of GDP reference value is preserved and that the budgetary position is expected to return to the MTO within the programme period), with special attention for pension reforms introducing a multi-pillar system that includes a mandatory, fully-funded pillar; whether the economic policies of the Member State are consistent with the broad economic policy guidelines. The plausibility of the programme’s macroeconomic assumptions is assessed by reference to the Commission services’ autumn 2006 forecast, using also the commonly agreed methodology for the estimation of potential output and cyclically-adjusted balances. The assessment of consistency with the broad economic policy guidelines is made against the broad economic policy guidelines in the area of public finances as included in the integrated guidelines for the period 2005-2008. The assessment also examines: the evolution of the debt ratio and the outlook for the long-term sustainability of the public finances, which should be given “sufficient attention in the surveillance of budgetary positions” according to the Council report of 20 March 2005 on “Improving the implementation of the Stability and Growth Pact”. A Commission Communication of 12 October 2006 sets out the approach to the assessment of long-term sustainability[4]; the degree of integration with the national reform programme, submitted by Member States in the context of the Lisbon strategy for growth and jobs. In its cover note of 7 June 2005 to the European Council on the broad economic policy guidelines for the period 2005-2008, the ECOFIN Council stated that the national reform programmes should be consistent with the stability and convergence programmes; compliance with the code of conduct[5], which inter alia prescribes a common structure and set of data tables for the stability and convergence programmes. |-  Recommendation for aCOUNCIL OPINIONin accordance with the first paragraph of Article 5 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the stability programme of Slovenia, 2006-2009THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies[6], and in particular Article 5(1) thereof,Having regard to the recommendation of the Commission,After consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:4.  On [27 February 2007] the Council examined the first stability programme of Slovenia, which covers the period 2006 to 2009.5.  The macroeconomic scenario underlying the programme envisages that real GDP will grow steadily at above 4% over the programme period. Assessed against currently available information, this scenario appears to be based on plausible growth assumptions. The programme’s projections for inflation also appear realistic.6.  For 2006, the general government deficit is estimated at 1.6% of GDP in the Commission services’ autumn 2006 forecast, against a target of 1.7% of GDP set in the December 2005 update of the convergence programme. The planned reduction of the expenditure ratio seems to have been broadly achieved, but the revenue shortfall is estimated to be higher than budgeted despite the cyclical improvement of the economy and the deficit slightly wider compared to 2005.7.  The programme's budgetary strategy is geared to achieving the medium-term objective (MTO) for the budgetary position as meant in the Stability and Growth Pact by 2009 through a back-loaded consolidation. Reflecting the ongoing tax reform and a number of cost-saving expenditure measures, revenues and expenditure as a percentage of GDP fall significantly throughout the programme period. Until 2008, when the respective ratios decrease in broadly equal measure, the general government deficit is planned to linger at around 1.5% of GDP. In 2009, the deficit declines to 1.0% as expenditure reduction outweighs the revenue loss. The primary balance initially deteriorates from 0.1% of GDP in 2006 to -0.3% of GDP in 2008 before improving to 0.3% of GDP in 2009. Compared with the last update of the convergence programme, the stability programme postpones the target of achieving a nominal deficit of 1% of GDP by one year against a more favourable macroeconomic scenario.8.  Over the programme period, the structural balance (i.e. the cyclically-adjusted balance net of one-off and other temporary measures) calculated according to the commonly agreed methodology is planned to improve by around ¼% of GDP. As in the December 2005 update of the convergence programme, the medium-term objective (MTO) for the budgetary position presented in the stability programme is a structural deficit of 1% of GDP to be achieved by 2009, one year later than in the previous programme. The delay is attributed in the programme to a major railway project with an estimated cost of 0.4% of GDP in 2007, 0.5% of GDP in 2008 and 0.2% of GDP in 2009. Since the MTO is more demanding than the minimum benchmark (estimated at a deficit of around 1½% of GDP), reaching it should fulfil the aim of providing a safety margin against the occurrence of an excessive deficit. The MTO lies within the range indicated for euro-area and ERM II Member States in the Stability and Growth Pact and the code of conduct and adequately reflects the debt ratio and average potential growth in the long term.9.  The risks to the budgetary projections in the programme appear broadly balanced for 2007 and 2008 but in 2009 the budgetary outcome could be worse than projected in the programme. On the one hand, the assumptions on growth and tax revenues seem plausible. Furthermore, Slovenia has established a track record of better-than-projected budgetary outcomes in recent years, also supported by an effective budgetary mechanism of containing general government expenditures in response to an unexpected revenue shortfall. On the other hand, notwithstanding the efforts to restructure the general government expenditure, the share of mandatory expenditure remains very high. The measures that underpin the considerable cut in primary expenditure as a percentage of GDP announced for 2009 remain to be specified in detail.10.  In view of this risk assessment, the budgetary stance in the programme may not be sufficient to ensure that the MTO is achieved by 2009, as envisaged in the programme. However, it seems to provide a sufficient safety margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations throughout the programme period. The pace of the adjustment towards the MTO implied by the programme is insufficient and should be strengthened to be in line with the Stability and Growth Pact, which specifies that, for euro-area and ERM II Member States, the annual improvement in the structural balance should be 0.5% of GDP as a benchmark and that the adjustment should be higher in good economic times and could be lower in bad economic times. In particular, good times are expected to occur throughout the programme period but the structural balance is not planned to improve noticeably before the last year of the programme. In 2009, however, there may be a risk that the outcome is worse than targeted.11.  Government gross debt is estimated to have reached 28.5% of GDP in 2006, well below the 60% of GDP Treaty reference value. The programme projects the debt ratio to decline by 0.8 percentage point over the programme period.12.  The long-term budgetary impact of ageing in Slovenia is among the largest in the EU, influenced notably by a considerable increase in pension expenditure as a share of GDP. While some action is being taken, implementation of further reform measures aimed at containing the substantial increase in age-related expenditures would contribute, as recognised by the authorities, to reducing risks to the sustainability of public finances Although the initial budgetary position contributes to stabilising the debt ratio over the medium term, the low structural improvement over the programme period will not be sufficient to contain the expected budgetary impact of ageing. Overall, Slovenia appears to be at high risk with regard to the sustainability of public finances.13.  The stability programme contains a qualitative assessment of the overall impact of Slovenia's October 2006 national reform programme within the medium-term fiscal strategy. In addition, it provides some information on the direct budgetary costs or savings of the main reforms envisaged in the national reform programme but its budgetary projections do not explicitly take into account the public finance implications of all actions outlined in the national reform programme. The measures in the area of public finances envisaged in the stability programme seem consistent with those foreseen in the national reform programme. In particular, the stability programme provides details of the tax reform announced in the national reform programme and complements the actions envisaged in the national reform programme with expenditure measures.14.  The budgetary strategy in the programme is partly consistent with the broad economic policy guidelines included in the integrated guidelines for the period 2005-2008. In particular, the adjustment path towards the MTO is insufficient and should be strengthened.15.  As regards the data requirements specified in the code of conduct for stability and convergence programmes, the programme has some gaps in the required and optional data[7].The overall conclusion is that, while the programme recognises that containing inflationary pressures and continued fiscal consolidation are necessary to preserve the resilience of the economy, it envisages insufficient progress towards the MTO in spite of the upbeat growth prospects. In view of the above assessment, Slovenia is invited to:(i) use the good economic conditions to hasten the achievement of the MTO by frontloading the adjustment effort; and(ii) in view of the projected increase in age related expenditure, improve the long-term sustainability of public finances by strengthening the ongoing pension reform with additional measures, geared especially to increasing labour participation of older workers and encouraging the development of private pension saving schemes.Comparison of key macro economic and budgetary projections2005 | 2006 | 2007 | 2008 | 2009 |Real GDP (% change) | SP Dec 2006 | 4.0 | 4.7 | 4.3 | 4.2 | 4.1 |COM Nov 2006 | 4.0 | 4.8 | 4.2 | 4.5 | n.a. |CP Dec 2005 | 3.9 | 4.0 | 4.0 | 3.8 | n.a. |HICP inflation (%) | SP Dec 2006 | 2.5 | 2.7 | 2.7 | 2.5 | 2.2 |COM Nov 2006 | 2.5 | 2.5 | 2.5 | 2.6 | n.a. |CP Dec 2005 | 2.2 | 1.5 | 2.2 | 2.5 | n.a. |Output gap (% of potential GDP) | SP Dec 20061 | -1.2 | -0.5 | -0.3 | -0.1 | 0.3 |COM Nov 20065 | -1.1 | -0.3 | 0.0 | 0.4 | n.a. |CP Dec 20051 | -1.2 | -0.7 | -0.3 | 0.0 | n.a. |General government balance (% of GDP) | SP Dec 2006 | -1.4 | -1.6 | -1.5 | -1.6 | -1.0 |COM Nov 2006 | -1.4 | -1.6 | -1.6 | -1.5 | n.a. |CP Dec 2005 | -1.7 | -1.7 | -1.4 | -1.0 | n.a. |Primary balance (% of GDP) | SP Dec 2006 | 0.4 | 0.1 | -0.1 | -0.3 | 0.3 |COM Nov 2006 | 0.3 | -0.1 | -0.2 | -0.3 | n.a. |CP Dec 2005 | -0.2 | -0.3 | -0.1 | 0.2 | n.a. |Cyclically-adjusted balance (% of GDP) | SP Dec 20061 | -0.9 | -1.4 | -1.4 | -1.6 | -1.1 |COM Nov 2006 | -0.9 | -1.5 | -1.6 | -1.7 | n.a. |CP Dec 20051 | -1.2 | -1.4 | -1.3 | -1.0 | n.a. |Structural balance2 (% of GDP) | SP Dec 20063 | -0.9 | -1.4 | -1.4 | -1.6 | -1.1 |COM Nov 20064 | -0.9 | -1.5 | -1.6 | -1.7 | n.a. |CP Dec 2005 | -0.4 | -1.4 | -1.4 | -1.0 | n.a. |Government gross debt (% of GDP) | SP Dec 2006 | 28.0 | 28.5 | 28.2 | 28.3 | 27.7 |COM Nov 2006 | 28.0 | 28.4 | 28.0 | 27.6 | n.a. |CP Dec 2005 | 29.0 | 29.6 | 29.8 | 29.4 | n.a. |Notes: 1 Commission services calculations on the basis of the information in the programme. 2 Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures. 3 There are no one-off or other temporary measures in the programme. 4 There are no one-off or other temporary measures in the Commission services' autumn 2006 forecast. 5 Based on estimated potential growth of 3.8% in 2005 and 4% in 2006-2008. Source: Convergence/stability programme (CP/SP); Commission services’ autumn 2006 economic forecasts (COM); Commission services’ calculations |[1] OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). All the documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm[2] Article 4 of Council Regulation (EC) No 1466/97 stipulates that "a Member State adopting the single currency at a later stage [i.e. later than 1 January 1999, when the first EU Member States adopted the single currency] shall submit a stability programme within six months of the Council decision on its participation in the single currency". On 11 July 2006, the Council adopted a decision on introduction of the single currency in Slovenia as of 1 January 2007, in accordance with Article 122(2) of the Treaty (Council Decision 2006/495/EC, OJ L 195, 15.7.2006, p. 25).[3] Communication from the Commission to the Spring European Council, “Implementing the renewed Lisbon strategy for growth and jobs - A year of delivery” - COM(2006) 816, 12.12.2006.[4] Communication from the Commission to the Council and the European Parliament, “The long-term sustainability of public finances in the EU” - COM(2006) 574, 12.10.2006 - and European Commission, Directorate-General for Economic and Financial Affairs (2006), “The long-term sustainability of public finances in the European Union”, European Economy No 4/2006.[5] “Specifications on the implementation of the Stability and Growth Pact and guidelines on the format and content of stability and convergence programmes”, endorsed by the ECOFIN Council of 11 October 2005.[6] OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm[7] In particular, net external balances for 2006-2007 as well as certain optional data concerning sectoral balances, labour market developments, general government expenditure by function and debt evolution are not provided.