               12.9.2015

               EN

               Official Journal of the European Union

               C 301/1

         EDPS recommendations on the EU’s options for data protection reform
   (The full text can be found in English, French and German on the EDPS website www.edps.europa.eu)
   (2015/C 301/01)
   On 24 June 2015, the three main institutions of the EU, European Parliament, the Council and the European Commission entered co-decision negotiations on the proposed General Data Protection Regulation (GDPR), a procedure known as an informal ‘trilogue’ (1). The basis for the trilogue is the Commission’s proposal of January 2012, the Parliament legislative resolution of 12 March 2014 and the General Approach of the Council adopted on 15 June 2015 (2). The three institutions are committed to dealing with the GDPR as part of the wider data protection reform package which includes the proposed directive for police and judicial activities. The process should conclude at the end of 2015 and likely allow for formal adoption of both instruments in early 2016, to be followed by a two-year transitional period (3).
   The European Data Protection Supervisor (EDPS) is an independent institution of the EU. The Supervisor is not part of the trilogue, but is responsible under Article 41(2) of Regulation (EC) No 45/2001 ‘With respect to the processing of personal data… for ensuring that the fundamental rights and freedoms of natural persons, and in particular their right to privacy, are respected by the Community institutions and bodies’, and ‘… for advising Community institutions and bodies and data subjects on all matters concerning the processing of personal data’. The Supervisor and Assistant Supervisor were appointed in December 2014 with the specific remit of being more constructive and proactive, and they published in March 2015 a five-year strategy setting out how they intended to implement this remit, and to be accountable for doing so (4).
   This Opinion is the first milestone in the EDPS strategy. Building on discussions with the EU institutions, Member States, civil society, industry and other stakeholders, our advice aims to assist the participants in the trilogue in reaching the right consensus on time. It addresses the GDPR in two parts:

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               the EDPS vision for future-oriented rules on data protection, with illustrative examples of our recommendations; and

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               an annex (‘Annex to Opinion 3/2015: Comparative table of GDPR texts with EDPS recommendation’) with a four-column table for comparing, article-by-article, the text of the GDPR as adopted respectively by Commission, Parliament and Council, alongside the EDPS recommendation.

         The Opinion is published on our website and via a mobile app. It will be supplemented in autumn 2015 with recommendations both for the recitals to the GDPR and, once the Council has adopted its General Position for the directive, on data protection applying to police and judicial activities.
   The EDPS’s comprehensive Opinion on the Commission’s proposed reform package in March 2012 remains valid. Three years on, however, we needed to update our advice to engage more directly with the positions of the co-legislators, and to offer specific recommendations (5). As with the 2012 Opinion, this Opinion is in line with the opinions and statements of the Article 29 Working Party, including the ‘Appendix’ on ‘Core topics in the view of trilogue’ adopted on 17 June, to which the EDPS contributed as a full member of the Working Party (6).

      A rare opportunity: Why this reform is so important

      The EU is in the last mile of a marathon effort to reform its rules on personal information. The General Data Protection Regulation will potentially affect, for decades to come, all individuals in the EU, all organisations in the EU who process personal data and organisations outside the EU who process personal data on individuals in the EU (7). The time is now to safeguard individuals’ fundamental rights and freedoms in the data-driven society of the future.

      Effective data protection empowers the individual and galvanises responsible businesses and public authorities. Laws in this area are complex and technical, requiring expert advice, in particular that of independent data protection authorities who understand the challenges of compliance. The GDPR is likely to be one of the longest in the Union’s statute book, so now the EU must aim to be selective, focus on the provisions which are really necessary and avoid detail which as an unintended consequence might unduly interfere with future technologies. The texts of each of the institutions preach clarity and intelligibility in personal data processing: so the GDPR must practice what it preaches, by being as concise and easy to understand as possible.

      It is for the Parliament and the Council as co-legislators to determine the final legal text, facilitated by the Commission, as initiator of legislation and guardian of the Treaties. The EDPS is not part of the ‘trilogue’ negotiations, but we are legally competent to offer advice, and to do so proactively in line with the Supervisor and Assistant Supervisor’s remit on appointment, and the EDPS recent strategy. This Opinion leverages over a decade of experience in supervision of data protection compliance and policy advice to help guide the institutions towards an outcome which will serve the interests of the individual.

      Legislation is the art of the possible. The options on the table, in the form of the respective texts preferred by the Commission, Parliament and Council, each contain many worthy provisions, but each can be improved. The outcome will not be perfect in our view, but we intend to support the institutions in achieving the best possible outcome. That is why our recommendations stay within the boundaries of the three texts. We are driven by three abiding concerns:

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               a better deal for citizens,

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               rules which will work in practice,

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               rules which will last a generation.

      This Opinion is an exercise in transparency and accountability, dual principles which are perhaps the most remarkable innovation of the GDPR. The trilogue process is coming under more scrutiny than ever before. Our recommendations are public, and we would urge all EU institutions to seize the initiative and to lead by example, so that this legislative reform is the outcome of a transparent process and not a secret compromise.

      The EU needs a new deal on data protection, a fresh chapter. The rest of the world is watching closely. The quality of the new law and how it interacts with global legal systems and trends is paramount. With this Opinion the EDPS signals its willingness and availability to ensure the EU makes the most of this historic opportunity.
   1.   A better deal for citizens

   EU rules have always sought to facilitate data flows, both within the EU and with its trading partners, yet with an overriding concern for the rights and freedoms of the individual. The internet has enabled an unprecedented degree of connectivity, self-expression and scope for delivering value to businesses and consumers. Nevertheless, privacy matters more than ever to Europeans. According to the Data Protection Eurobarometer survey in June 2015 (8), more than six out of ten citizens do not trust online businesses and two-thirds are concerned at not having complete control over the information they provide online.
   The reformed framework needs to maintain and, where possible, raise standards for the individual. The data protection reform package was proposed firstly as a vehicle for ‘strengthening online privacy rights’ by ensuring people were ‘better informed about their rights and in more control of their information’ (9). Representatives of civil society organisations wrote to the European Commission in April 2015 to urge the institutions to remain true to these intentions (10).
   Existing principles set down in the Charter, primary law of the EU, should be applied consistently, dynamically and innovatively so that they are effective for the citizen in practice. The reform needs to be comprehensive, hence the commitment to a package, but as data processing is likely to fall under separate legal instruments there must be clarity as to their precise scope and how they work together, with no loopholes for compromising on safeguards (11).
   For the EDPS, the starting point is the dignity of the individual which transcends questions of mere legal compliance (12). Our recommendations are based on an assessment of each article of the GDPR, individually and cumulatively, according to whether it will strengthen the position of the individual compared to the current framework. The point of reference is the principles at the core of data protection, that is, Article 8 of the Charter of Fundamental Rights (13).
   1.1.   Definitions: let’s be clear on what personal information is

   Individuals should be able to exercise more effectively their rights with regard to any information which is able to identify or single them out, even if the information is considered ‘pseudonymised’ (14).
   1.2.   All data processing must be both lawful and justified

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               The requirements for all data processing to be limited to specific purposes and on a legal basis are cumulative, not alternatives. We recommend avoiding any conflation and thereby weakening of these principles. Instead, the EU should preserve, simplify and operationalise the established notion that personal data should only be used in ways compatible with the original purposes for collection (15).

               —

               Consent is one possible legal basis for processing, but we need to prevent coercive tick boxes where there is no meaningful choice for the individual and where there is no need for data to be processed at all. We recommend enabling people to give broad or narrow consent, to clinical research for example, which is respected and which can be withdrawn (16).

               —

               The EDPS supports sound, innovative solutions for international transfers of personal information which facilitate data exchanges and respect data protection and supervision principles. We strongly advise against permitting transfers on the basis of legitimate interests of the controller because of the insufficient protection for individual, nor should the EU open the door for direct access by third country authorities to data located in the EU. Any request for transfer issued by authorities in a third country should only be recognised where it respects the norms established in Mutual Legal Assistance Treaties, international agreements or other legal channels for international cooperation (17).

         1.3.   More independent, more authoritative supervision

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               The EU’s data protection authorities should be ready to exercise their roles the moment the GDPR enters into force, with the European Data Protection Board fully operational as soon as the Regulation becomes applicable (18).

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               Authorities should be able to hear and to investigated complaints and claims brought by data subjects or bodies, organisations and associations.

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               Individual rights enforcement requires an effective system of liability and compensation for damage caused by the unlawful data processing. Given the clear obstacles to obtaining redress in practice, individuals should be able to be represented by bodies, organisations and associations in legal proceedings (19).

         2.   Rules which will work in practice

   Safeguards should not be confused with formalities. Excessive detail or attempts at micromanagement of business processes risks becoming outdated in the future. Here we may take a leaf from the EU’s competition manual, where a relatively limited body of secondary legislation is rigorously enforced and encourages a culture of accountability and awareness among undertakings (20).
   Each of the three texts demands greater clarity and simplicity from those responsible for processing personal information (21). Equally, technical obligations must also be concise and easily-understood if they are to be implemented properly by controllers (22).
   Existing procedures are not sacrosanct: our recommendations aim to identify ways of de-bureaucratising, minimising the prescriptions for documentation and irrelevant formalities. We recommend legislating only where genuinely necessary. This provides room for manoeuvre whether for companies, public authorities or data protection authorities: a space that must be filled by accountability and guidance from data protection authorities. Overall, our recommendations would produce a GDPR text almost 30 % shorter than the average length of the three institutions (23).
   2.1.   Effective safeguards, not procedures

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               Documentation should be a means not an end to compliance; the reform must focus on results. We recommend a scalable approach which reduces documentation obligations on controllers into single policy on how it will comply with the regulation taking into account the risks, with compliance demonstrated transparently, whether for transfers, contracts with processors or breach notifications (24).

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               On the basis of explicit risk assessment criteria, and following our experience of supervising the EU institutions, we recommend requiring notification of data breaches to the supervisory authority and data protection impact assessments only where the rights and freedoms of data subjects are at risk (25).

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               Industry initiatives, whether through Binding Corporate Rules or privacy seals, should be actively encouraged (26).

         2.2.   A better equilibrium between public interest and personal data protection

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               Data protection rules should not hamper historical, statistical and scientific research which is genuinely in the public interest. Those responsible must make the necessary arrangements to prevent personal information being used against the interest of the individual, paying particular attention to the rules governing sensitive information concerning health, for example (27).

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               Researchers and archivists should be able to store data for as long as needed subject to these safeguards (28).

         2.3.   Trusting and empowering supervisory authorities

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               We recommend allowing supervisory authorities to issue guidance to data controllers and to develop their own internal rules of procedure in the spirit of a simplified, easier application of the GDPR by one single supervisory authority (the ‘One Stop Shop’) close to the citizen (‘proximity’) (29).

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               Authorities should be able to determine effective, proportionate and dissuasive remedial and administrative sanctions on the basis of all relevant circumstances (30).

         3.   Rules which will last a generation

   The main pillar of the current framework, Directive 95/46/EC, has been a model for further legislation on data processing in the EU and around the world, and even provided the basis for wording of the right to protection of personal data in Article 8 of the Charter of Fundamental Rights. This reform will shape data processing for a generation which has no memory of living without the internet. The EU must therefore fully understand the implications of this act for individuals, and its sustainability in the face of technological development.
   Recent years have seen an exponential increase in the generation, collection, analysis and exchange of personal information, the result of technological innovations like the internet of things, cloud computing, big data and open data, whose exploitation the EU considers essential to its competitiveness (31). Judging by the longevity of Directive 95/46/EC, it is reasonable to expect a similar timeframe before the next major revision of data protection rules, perhaps not until the late 2030s. Long before this time, data-driven technologies can be expected to have converged with artificial intelligence, natural language processing and biometric systems, empowering applications with machine-learning ability for advanced intelligence.
   These technologies are challenging the principles of data protection. A future-oriented reform must therefore be predicated on the dignity of the individual and informed by ethics. It must redress the imbalance between innovation in the protection of personal data and its exploitation, making safeguards effective in our digitised society.
   3.1.   Accountable business practices and innovative engineering

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               The reform should reverse the recent trend towards secret tracking and decision making on the basis of profiles hidden from the individual. The problem is not targeted advertising or the practice of profiling, but rather the lack of meaningful information about the algorithmic logic which develops these profiles and has an effect on the data subject (32). We recommend fuller transparency from controllers.

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               We strongly support the introduction of the principles of data protection by design and by default as a means of kick-starting market-driven solutions in the digital economy. We recommend simpler wording for requiring the rights and interests of the individual to be integrated in product development and default settings (33).

         3.2.   Empowered individuals

   Data portability is the gateway in the digital environment to the user control which individuals are now realising they lack. We recommend allowing a direct transfer of data from one controller to another on the data subject’s request and entitling data subjects to receive a copy of the data which they themselves can transfer to another controller (34).
   3.3.   Future-proofed rules

   We recommend avoiding language and practices that are likely to become outdated or disputable (35).
   4.   Unfinished business

   The adoption of a future-oriented EU data reform package will be an impressive but nonetheless incomplete achievement.
   All institutions agree that the principles of the GDPR should apply consistently to EU institutions. We have advocated legal certainty and uniformity of the legal framework, while accepting the uniqueness of the EU public sector and the need to avoid any weakening of the current level of obligations (as well the need to provide for the legal and organisational basis for the EDPS). A proposal consistent with the GDPR for the revision of Regulation (EC) No 45/2001 should therefore be made by the Commission as soon as possible after the talks on the GDPR are finalised so that both texts can become applicable at the same time (36).
   Secondly, it is clear that the Directive 2002/58/EC (the ‘ePrivacy Directive’) will have to be amended. Much more importantly, the EU requires a clear framework for the confidentiality of communications, an integral element of the right to privacy, which governs all services enabling communications, not only providers of publicly available electronic communications. This must be done by means of a legally-certain and harmonising regulation which provides for at least the same standards of protection under the ePrivacy Directive in a level-playing field.
   This Opinion therefore recommends calling for a commitment to speedy adoption of proposals in these two areas as soon as possible.
   5.   A defining moment for digital rights in Europe and beyond

   For the first time in a generation the EU has an opportunity to modernise and to harmonise the rules on how personal information is handled. Privacy and data protection are not in competition with economic growth and international trade, nor with great services and products — they are part of the quality and value proposition. As the European Council recognises, trust is a necessary precondition for innovative products and services that rely on the processing of personal data.
   The EU in 1995 was a trailblazer for data protection. Now over 100 countries across the world have data protection laws and less than half of these are European countries (37). The EU nevertheless continues to command the close attention of countries who are considering establishing or revising their legal frameworks. At a time when people’s trust in companies and governments has been shaken by revelations of mass surveillance and data breaches, this confers considerable responsibility on EU lawmakers whose decisions this year can be expected to have an impact not beyond Europe.
   In the view of the EDPS, the GDPR texts are on the right track, but concerns remain, some very serious. There is always a risk with the co-decision process that certain provisions are weakened by well-intentioned negotiators in the search for political compromise. With data protection reform, however, it is different, because we are dealing with fundamental rights and the way they will be safeguarded for a generation.
   On that basis, this Opinion seeks to assist the main institutions of the EU in solving problems. We want not just stronger rights for the individual data subject and greater accountability for the controller; we want to facilitate innovation with a legal framework that is neutral towards the technology but positive towards the benefits the technology can bring to society.
   With negotiations in the final mile, we hope that our recommendations will help the EU get over the finishing line with a reform which will remain fit for purpose over the years and decades to come: a new chapter for data protection with a global perspective, with the EU leading by example.

      Done at Brussels, 27 July 2015.

         Giovanni BUTTARELLI

            European Data Protection Supervisor

      (1)  Joint Declarations European Parliament Council Commission Joint Declaration on Practical Arrangements for the Co-decision Procedure (Article 251 of the EC Treaty) (2007/C 145/02) (OJ C 145, 30.6.2007).

      (2)  COM(2012)11 final; European Parliament legislative resolution of 12 March 2014 on the proposal for a regulation of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation), P7_TA(2014)0212; Proposal for a Regulation of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) — Preparation of a general approach, Council document 9565/15, 11.6.2015.

      (3)  Long title is Proposal for a Directive on the protection of individuals with regard to the processing of personal data by competent authorities for the purposes of prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data, COM(2012)10 final; European Parliament legislative resolution of 12 March 2014 on the proposal for a directive of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data by competent authorities for the purposes of prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data, P7_TA(2014)0219. On the timing and scope of the trilogue, see European Council Conclusions 25-26 June 2015, EUCO 22/15; a ‘road map’ for the trilogue was indicated at a joint Parliament-Council-Commission press conference http://audiovisual.europarl.europa.eu/AssetDetail.aspx?id=690e8d8d-682d-4755-bfb6-a4c100eda4ed [last accessed 20.7.2015] but has not been published officially. The GDPR will enter into force 20 days after its publication in the Official Journal and is expected to be fully applicable two years after its entry into force (Article 91).

      (4)  Vacancy notice for the European Data Protection Supervisor COM/2014/10354 (2014/C 163 A/02), OJ C 163 A/6 28.5.2014. The EDPS Strategy 2015-2019 promised to ‘seek workable solutions that avoid red tape, remain flexible for technological innovation and cross-border data flows and enable individuals to enforce their rights more effectively on- and offline’; Leading by example: The EDPS Strategy 2015-2019, March 2015.

      (5)  EDPS Opinion on the data protection reform package, 7.3.2015.

      (6)  See annex to Letter from Article 29 Working Party to Vĕra Jourová, Commissioner for Justice, Consumers and Gender Equality, 17.6.2015.

      (7)  The material and territorial scope of the GDPR is difficult to summarise succinctly. The institutions seem to agree, at least, that the scope covers organisations established in the EU which are responsible for processing personal data either in the EU or outside it, organisations established outside the EU who process personal data of individuals in the EU in the course of offering goods or services to or monitoring individuals in the EU (see Article 2 on material scope and Article 3 on territorial scope).

      (8)  Other results included seven out of ten being concerned about their information being used for a different purpose from the one it was collected for, one in seven saying they their explicit approval should be required in all cases before their data is collected and processed, and two-thirds thinking it important to be able to transfer personal information from an old service provider to a new one; Special Eurobarometer 431 on data protection, June 2015. Comparable results from Pew Research in 2014 which found 91 % Americans feel they have lost control over how companies collect and use person info, of social network users 80 % are concerned about third parties like advertisers or businesses getting their data and 64 % say government should do more to regulate advertisers; Pew Research Privacy Panel Survel, January 2014.

      (9)  Commission proposes a comprehensive reform of data protection rules to increase users’ control of their data and to cut costs for businesses.

      (10)  Letter from NGOs to President Juncker, 21.4.2015 https://edri.org/files/DP_letter_Juncker_20150421.pdfand response from Head of Cabinet of Vice President Timmermans, 17.7.2015 https://edri.org/files/eudatap/Re_EC_EDRi-GDPR.pdf [accessed 23.7.2015]. The EDPS met with representatives of several of these NGOs to discuss their concerns on May 2015; PRESS RELEASE EDPS/2015/04, 1.6.2015, EU Data Protection Reform: the EDPS meets international civil liberties groups; full length recording of discussion available on EDPS website (https://secure.edps.europa.eu/EDPSWEB/edps/EDPS/Pressnews/Videos/GDPR_civil_soc).

      (11)  Article 2.2 (e).

      (12)  Article 1.

      (13)  Article 8 of the Charter reads [emphasis added]

               ‘1.

                  Everyone has the right to the protection of personal data concerning him or her.

                  2.

                  Such data must be processed fairly for specified purposes and on the basis of the consent of the person concerned or some other legitimate basis laid down by law. Everyone has the right of access to data which has been collected concerning him or her, and the right to have it rectified.

                  3.

                  Compliance with these rules shall be subject to control by an independent authority.’

      (14)  Article 10. Unless and until there exists a clear and legally-binding definition for ‘pseudonymised data’ as distinct from ‘personal data’, this type of data must remain within the scope of data protection rules.

      (15)  Articles 6.2 and 6.4. Given that there has been some uncertainty as to the meaning of ‘compatibility’ we recommend, following the WP29 Opinion on Purpose Limitation, general criteria for assessing whether processing is compatible (see Article 5.2).

      (16)  Effective functional separation is one means of ensuring lawful processing in the absence of consent, but legitimate interest should be not be interpreted excessively. An unconditional right to opt out may also be an appropriate alternative in some situations. Assessing whether consent is freely given depends in part on (a) whether there is a significant imbalance between the data subject and the controller and (b) in cases of processing under Article 6.1(b), whether the execution of a contract or the provision of a service is made conditional on the consent to the processing of data that is not necessary for the these purposes (see Article 7.4.) This mirrors the provision in EU consumer law: under Article 3.1 of the Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer, ‘A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer’.

      (17)  Such rules include adequacy decisions for specified sectors and territories, periodic reviews of adequacy decisions and Binding Corporate Rules. See Articles 40-45.

      (18)  Article 73.

      (19)  Article 76. On difficulty in obtaining redress for violations of data protection rules, see Fundamental Rights Agency report, Access to data protection remedies in EU Member States, 2013.

      (20)  EU rules place the emphasis on companies’ self-assessment regarding compliance with TFEU Article 101 prohibition on anti-competitive agreements, while dominant firms in a market have a ‘special responsibility’ to avoid any action which might impair effective competition (Paragraph 9 of Commission Guidance 2009/C 45/02); see EDPS Preliminary Opinion on Privacy and Competitiveness in the Age of Big Data, 14.3.2014.

      (21)  The three texts refer variously to ‘intelligible manner and form, using clear and plain language’ (recital 57, EP; Article 19, COM and Council), being ‘clear and unambiguous’ (recital 99, EP; Article 10a EP) and providing ‘clear and easily understandable information’ (Article 10 EP, Article 11 EP), and information which is ‘concise, transparent, clear and easily accessible’ (recital 25, EP, COM and Council; Article 11 EP).

      (22)  Provisions for delegated acts have been largely removed in the versions of the Parliament and the Council. We believe the EU could go further and leave these technical matters to the expertise of independent authorities.

      (23)  Our recommendations would produce a text of around 20 000 words; the average length of the texts of the three institutions is around 28 000 words.

      (24)  Article 22.

      (25)  Articles 31 and 33.

      (26)  Article 39.

      (27)  Article 83. Research and archiving in themselves do not constitute a legal basis for processing, which is why we recommending deleting Article 6.2.

      (28)  Article 83a.

      (29)  The WP29 has outlined a vision for governance, the consistency mechanism and the one-stop-shop based on trust in independent DPAs and formulated in three layers:

               —

               the individual DPA which is strong and fully resourced for dealing with cases within their sphere of competence;

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               effective cooperation between DPA with a clear lead in cross border cases;

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               the EDPB which must be autonomous, with its own legal personality, provided with sufficient means, consisting of equal DPAs working in a spirit of solidarity, with the power to make binding decisions and supported by a secretariat which serves the board through the chair.

      (30)  We also recommend clarifying the competence of the supervisory authorities and the designation of a lead authority in cases of transnational processing, whilst preserving the ability of the supervisory authorities to handle purely local cases. We recommend a simplified version of the consistency mechanism with more clarity on how to identify the cases where the supervisory authorities would need to consult the European Data Protection Board and where the Board would need to issue a binding decision in order to ensure the consistent application of the Regulation.

      (31)  Commission Communication on A Digital Single Market Strategy for Europe, COM(2015) 192 final; European Council Conclusions June 2015, EUCO 22/15; Council Conclusions on the Digital Transformation of European Industry, 8993/15.

      (32)  Article 14(h).

      (33)  Article 23.

      (34)  Article 18. We further recommend that, in order to be effective, the right to data portability must have a wide scope of application, and not only be applied to the processing operations that use data provided by the data subject.

      (35)  We recommend, for example, omitting terms like ‘online’, ‘in writing’ and ‘the information society’.

      (36)  One option, which we would prefer, is for this to be done by means of a provision in the GDPR itself.

      (37)  Greenleaf, Graham, Global Data Privacy Laws 2015: 109 Countries, with European Laws Now a Minority (January 30, 2015); (2015) 133 Privacy Laws & Business International Report, February 2015; UNSW Law Research Paper No 2015-21.


title: Recommendation for a Council opinion in accordance with the third paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 on the updated convergence programme of United Kingdom, 2006/2007-2011/2012

text:
Important legal notice

|

52007SC0191

Recommendation for a Council opinion in accordance with the third paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated convergence programme of United Kingdom, 2006/2007-2011/2012  /* SEC/2007/0191 final */

	[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |Brussels, 13.2.2007SEC(2007) 191 finalRecommendation for aCOUNCIL OPINIONin accordance with the third paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated convergence programme of United Kingdom, 2006/2007-2011/2012(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 the United Kingdom was submitted in December 1998. In accordance with the Regulation, the Council delivered an opinion on it on 8 February 1999 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 UPDATED PROGRAMMEThe Commission has examined the most recent update of the convergence programme of the United Kingdom, submitted on 18 December 2006, and has adopted a recommendation for a Council opinion on it (see box for the main points covered by the assessment).In order to set the scene against which the budgetary strategy in the updated convergence programme is assessed, the following paragraphs summarise:1.  the economic and budgetary performance over the last ten years2.  the country’s position under the corrective arm of the Stability and Growth Pact (excessive deficit procedure)3.  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 previous update of the convergence programme)4.  the Commission’s assessment of the October 2006 national reform programme.2.1. Recent economic and budgetary performanceThe United Kingdom's economic performance over the past ten years has been strong, with relatively high rates of growth, low inflation and resilient labour markets that have weathered a number of economic shocks. Improved stability has been a particularly significant feature, with a flattening of cyclical fluctuations in output and with lower inflation volatility. Strong output growth has been mainly supported by robust household consumption, which has been matched by relatively low household saving. Despite flexibility in labour, capital and product markets being remarkable on most measures, some supply-side weaknesses have proved resistant to improvement. The relatively lacklustre productivity can be explained to some extent by comparatively high levels of employment, although lack of intermediate skills and underinvestment in infrastructure such as transport are likely also to play a role. Compared with the marked fiscal consolidation seen in the first part of the period, the public finances have significantly deteriorated from 2001 onwards, partly planned, reflecting the government's decision to address some of these issues through not fully funded increased expenditure on public services, but also due to shortfalls in planned revenues.2.2. The excessive deficit procedure for the United KingdomOn 24 January 2006, the Council decided that the United Kingdom was in excessive deficit in accordance with Article 104(6) and addressed a recommendation under Article 104(7) that the excessive deficit be corrected by financial year 2006/07 and that the authorities take effective action by 24 July 2006, i.e. within six months as specified in the Pact. On 20 September 2006, the Commission published a communication to the Council assessing the action taken by the United Kingdom. On the basis of then available information, the Commission judged that the United Kingdom appeared to be just on track to correct its excessive deficit, although this outcome was subject to large uncertainties and the structural adjustment appeared to fall short of the recommended 0.5% of GDP. On 10 October 2006 the Council endorsed the Commission's view and concluded that no further steps were needed at that time.2.3. The assessment in the Council opinion on the previous programmeOn 14 March 2006, the Council adopted its opinion on the previous update of the convergence programme, covering the period from financial year 2005/06 to 2011/12[2]. The Council was of the opinion that “the projected adjustment path is subject to risks” and invited the United Kingdom, under Article 104(7), and in order to address the risks to long-term sustainability, to “ensure that the deficit is brought below 3% of GDP by 2006/07 in a credible and sustainable manner” and pursue budgetary consolidation thereafter, especially by implementing the projected reduction in expenditure growth after 2007/08” and “attain a medium-term objective that ensures rapid progress towards sustainability, a prudent debt ratio well below 60% of GDP, and provides a sufficient safety margin against breaching the 3% of GDP deficit reference value, which the UK is under the obligation to endeavour to avoid, and allows room for budgetary manoeuvre, in particular taking into account the needs for public investment”.2.4. The Commission assessment of the October 2006 national reform programmeThe implementation report of the national reform programme of the United Kingdom, provided in the context of the renewed Lisbon strategy for growth and jobs, was submitted on 16 October 2006. The United Kingdom's national reform programme identifies as key priorities: maintaining fiscal sustainability in the face of demographic challenges; building an enterprising and flexible business sector, promoting innovation and R&D; widening opportunities for the acquisition of skills; increasing innovation and adaptability in the use of resources; and ensuring fairness through a modern and flexible welfare state.The Commission’s assessment of this programme (adopted as part of its December 2006 Annual Progress Report[3]) showed that the United Kingdom is making good progress in the implementation of its national reform programme. Solid progress has been made in all policy areas, particularly in micro-economic and employment policy. In macro-economic policy, plans for fiscal consolidation and pension reform have been drawn up and still need to be implemented. The United Kingdom has made greater efforts to involve stakeholders.Against the background of strengths and weaknesses identified, the United Kingdom was recommended to take action in the areas of basic and intermediate skills.Box: Main points covered by 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 third paragraph of Article 9 of Council Regulation (EC) No 1466/97 of 7 July 1997 On the updated convergence programme of United Kingdom, 2006/2007-2011/2012THE 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 9(3) thereof,Having regard to the recommendation of the Commission,After consulting the Economic and Financial Committee,HAS DELIVERED THIS OPINION:5.  On [27 February 2007] the Council examined the updated convergence programme of the United Kingdom, which covers the period from financial year 2006/07 to financial year 2011/12[7].6.  The programme contains two macroeconomic scenarios: a central scenario and an alternative scenario which is based on trend growth a quarter percentage point lower than in the central scenario. The projections for the public finances in the update of the convergence programme are based on the latter scenario, which is considered the reference scenario for this assessment. It envisages real GDP growth of 2¾% in 2006 and 2007, easing to 2½% on average over the rest of the programme period. Based on currently available information, this scenario appears to be based on plausible growth assumptions. The projections for inflation, which is expected to decline from 2½% in 2006 to 2% from 2007 onwards, appear to be on the low side in the short term, in the light of more recently published outturns, but otherwise plausible.7.  For 2006/07, the general government deficit is estimated at 3.0% of GDP in the Commission services’ autumn 2006 forecast. The current update of the convergence programme estimates a deficit of 2.8% of GDP for the same year, which implies recent trends, showing robust growth in revenues and slower growth in expenditure, being maintained in the remaining months of the financial year8.  The key objectives for fiscal policy as identified in the convergence programme update are to ensure long-term sustainability, intra- and intergenerational fairness and, subject to this, to support monetary policy, in particular by allowing the automatic stabilisers to smooth the path of the economy. The programme projects a reduction of the deficit below 3% of GDP by 2006/07 (2.8%) and to 1.4% of GDP by the end of the projection period in 2011/12. The primary balance, estimated as a deficit of 0.6% of GDP in 2005/06, is expected to return to balance by 2008/09 and to reach a surplus of 0.7% of GDP by 2011/12. The budgetary adjustment over the projection period is equally distributed between revenues and expenditure. The increase of the revenue ratio is expected to take place in the first two years of the projection period, partly driven by discretionary measures, while significant adjustment on the expenditure side is planned to take place from 2008/09, through a moderation in current expenditure growth. Public investment in the definition used in the convergence programme[8] is planned to stabilise at 2¼% of GDP from 2006/07 so that from 2007/08 the deficit is projected to be used entirely to fund public investment. The adjustment path is broadly in line with the one projected in the 2005 update, against a more favourable macroeconomic outlook in the short term.9.  Calculated according to the commonly agreed methodology, the structural balance (i.e. the cyclically-adjusted balance net of one-off and other temporary measures) is projected to improve from 2½% of GDP in 2006/07 to about 1¼% of GDP in the final programme year, 2011/12. This adjustment is more marked between 2006/07 and 2008/09 but slows thereafter. As in the 2005 update, a quantitative medium-term objective (MTO) for the structural balance is not specified. The programme refers to fiscal objectives under the domestic rules, which imply a medium-term path for the cyclically-adjusted deficit that is consistent with stabilising the debt-to-GDP ratio at a relatively low level, but provides a safety margin with respect to the 3% of GDP general government deficit threshold only in certain circumstances.10.  The risks to the budgetary projections in the programme appear broadly balanced up to 2007/08 but the budgetary outcomes could be worse than projected in the programme thereafter. The projected increase in the tax to GDP ratio partly relies on relatively volatile factors such as profits from the financial and oil-producing sectors. However, relatively good prospects for revenues appear supported by recent economic developments, including strong profitability. From 2008/09 on however, achievement of the deficit path in the programme will depend on implementing the projected moderation in expenditure growth, and on active monitoring to enforce expenditure limits. While the UK authorities have pre-announced a reduction in the budgetary allocation for a number of smaller departments, the greatest part of the expenditure moderation from 2008/09 is not yet underpinned by specific measures but is subject to confirmation in the authorities' Comprehensive Spending Review, planned for July 2007, which will announce firm expenditure plans up to 2010/11. The record of active monitoring to enforce expenditure limits is positive.11.  In view of this risk assessment, the budgetary stance in the programme appears broadly consistent with a correction of the excessive deficit by 2006/07, as recommended by the Council. However, it provides a sufficient safety margin against breaching the 3% of GDP deficit threshold with normal macroeconomic fluctuations only around 2009/10, when the projections are subject to the outcome of the Comprehensive Spending Review. In the years following the correction of the excessive deficit, the pace of fiscal consolidation implied by the programme should thus be strengthened, especially towards the end of the projection period, when no significant further adjustment is projected despite a broadly supportive economic outlook.12.  The gross debt ratio, which stood at 42.1% of GDP in 2005/06, though remaining well below the Treaty reference value of 60% of GDP, is projected to rise slowly over the projection period, peaking at just above 44% of GDP in 2008/09. Thereafter the ratio is expected to stabilise and then begin to decline at the end of the programme period.13.  The long-term budgetary impact of ageing in the UK is close to the EU average, with pension expenditure showing a somewhat more limited increase than on average in the EU, in part as a result of the UK's historically relying relatively more on private pension arrangements than have other EU countries. The proposed reforms to pension provision address the concern of potentially inadequate provision in the future, by strengthening the incentives for private savings for retirement and by increasing provision of public pensions, thus involving a slightly higher increase in public pension expenditure than previously projected; the reform also incorporates a planned gradual increase in the statutory state pension age. The initial budgetary position, though improved compared to 2005, still constitutes a risk to sustainable public finances even before the long-term budgetary impact of an ageing population is considered. Consolidating the public finances by strengthening the budgetary position further than planned in the convergence programme would thus contribute to reducing risks to the sustainability of public finances. Overall, the UK appears to be at medium risk with regard to the sustainability of public finances.14.  The convergence programme contains a qualitative assessment of the overall impact of the October 2006 implementation report of the national reform programme within the medium-term fiscal strategy. In addition it provides systematic information on the direct budgetary costs or savings of the main reforms envisaged in the national reform programme and its budgetary projections explicitly take into account the public finance implications of the actions outlined in the national reform programme. The measures in the area of public finances envisaged in the convergence programme seem consistent with those foreseen in the national reform programme. In particular, both programmes envisage the gradual implementation of the government's objectives to increase efficiency and value for money in public service provision, while the long-term public finance projections incorporate the estimated cost of the proposed pension reform.15.  The budgetary strategy in the programme is broadly consistent with the broad economic policy guidelines included in the integrated guidelines for the period 2005-2008.16.  As regards the data requirements specified in the code of conduct for stability and convergence programmes, the programme has gaps in the required and optional data[9], which are more severe than in the previous update, as the time horizon over which expenditure plans are specified is shorter.The overall conclusion is that the programme seems broadly consistent with a correction of the excessive deficit by the deadline set by the Council (financial year 2006/07). However, no significant further consolidation is envisaged after 2009/10, and the achievement of the budgetary targets after 2007/08 is subject to the effective implementation of the projected expenditure restraint.In view of the above assessment, the United Kingdom is invited to pursue budgetary consolidation over the programme period, especially by implementing the projected reduction in expenditure growth after 2007/08, and to strengthen further its fiscal position in order to address the risks to long-term sustainability of the public finances.The United Kingdom is also invited to comply with the data requirements of the code of conduct.  Comparison of key macroeconomic and budgetary projections2005/06 | 2006/07 | 2007/08 | 2008/09 | 2009/10 | 2010/11 | 2011/12 |[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] The UK financial year runs from April to March.[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] The UK financial year runs from April to March.[8] The definition of public investment in the UK convergence programme, which is not an ESA concept, covers all public sector investment (that is, public corporations as well as general government) and includes capital grants to the private sector net of depreciation.[9] In particular, the data on projections for employment, unemployment, wage inflation and a detailed breakdown of revenue and expenditure projections on a general government basis after 2007/08 are not provided. Compared to the 2005 update, the horizon for the breakdown of expenditure on a general government basis is shorter in the current update, which is the last update before new detailed spending plans will be fixed in the July 2007 Comprehensive Spending Review.


title: Council Recommendation of 10 July 2012 on the National Reform Programme 2012 of Latvia and delivering a Council opinion on the Convergence Programme of Latvia, 2012-15

text:
               24.7.2012

               EN

               Official Journal of the European Union

               C 219/50

         COUNCIL RECOMMENDATION
   of 10 July 2012
   on the National Reform Programme 2012 of Latvia and delivering a Council opinion on the Convergence Programme of Latvia, 2012-15
   2012/C 219/15
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(2) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   After consulting the Economic and Financial Committee,
   Whereas:

               (1)

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

               (2)

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

               (3)

               On 12 July 2011, the Council adopted a recommendation (3) on Latvia’s National Reform Programme for 2011 and delivered its opinion on Latvia’s updated Convergence Programme for 2011-14.

               (4)

               On 23 November 2011, the Commission adopted the second Annual Growth Survey, marking the start of the second European Semester of ex ante and integrated policy coordination, which is anchored in the Europe 2020 strategy. On 14 February 2012, the Commission, on the basis of Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (4), adopted the Alert Mechanism Report, in which it did not identify Latvia as one of the Member States for which an in-depth review would be carried out.

               (5)

               On 1 December 2011, the Council adopted conclusions calling on the Social Protection Committee, in cooperation with the Employment and other Committees, to present its views on actions recommended within the Europe 2020 policy cycle. These views form part of the opinion of the Employment Committee.

               (6)

               In 2011 Latvia had met most of the conditions related to the Medium-term Financial Assistance Programme under Decision 2009/290/EC (5). The Commission completed the fifth and final review under Latvia’s balance-of-payments programme on 21 December 2011 with an overall positive assessment on the Government’s progress in budgetary, financial and structural reforms. The Medium-term Financial Assistance Programme expired in January 2012. Following the expiration of that Programme, Latvia is subject to post-programme surveillance. This surveillance forms an integral part of the existing procedures and surveillance mechanisms and it aims at close monitoring of risks that could jeopardise macroeconomic stability and hence affect the repayment capacity. The post-programme surveillance will continue until the repayment of a large fraction (about 70 %) of loans.

               (7)

               The European Parliament has been duly involved in the European Semester, in accordance with Regulation (EC) No 1466/97, and, on 15 February 2012, adopted a resolution on employment and social aspects in the Annual Growth Survey 2012 and a resolution on the contribution to the Annual Growth Survey 2012.

               (8)

               On 2 March 2012, the European Council endorsed the priorities for ensuring financial stability, fiscal consolidation and action to foster growth. It underscored the need to pursue differentiated, growth-friendly fiscal consolidation, to restore normal lending conditions to the economy, to promote growth and competitiveness, to tackle unemployment and the social consequences of the crisis, and to modernise public administration.

               (9)

               On 2 March 2012, the European Council also invited the Member States participating in the Euro Plus Pact to present their commitments in time to be included in their Stability or Convergence Programmes and in their National Reform Programmes.

               (10)

               On 30 April 2012, Latvia submitted its Convergence Programme covering the period 2012-15 and its 2012 National Reform Programme. In order to take account of their interlinkages, the two Programmes have been assessed at the same time.

               (11)

               Based on the assessment of the Convergence Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that the macroeconomic scenario underpinning the budgetary projections is cautious in 2012, taking into account the latest available information, and plausible in 2013. While macroeconomic projections for 2012 in the Convergence Programme scenario are very close to those in the Commission services’ 2012 spring forecast (with GDP growth projections respectively at 2,0 % and 2,2 %), recent economic data indicates that the outturn may be higher. The objective of the budgetary strategy outlined in the Convergence Programme is to correct an excessive deficit by 2012 and to approach the medium-term budgetary objective (MTO) by the end of the Convergence Programme period. The 2012-15 Convergence Programme has changed the MTO from – 1,0 % to – 0,5 % of GDP; the new MTO adequately reflects the requirements of the Stability and Growth Pact. The planned headline deficit in 2012 complies with the deadline for correction of the excessive deficit established in Council Recommendation of 7 July 2009. For 2013, the Convergence Programme targets a headline deficit of 1,4 % of GDP, although the planned expenditure reduction is not yet fully supported by measures. Based on the (recalculated) structural budget balance (6), Latvia will approach its MTO by the end of the Convergence Programme period in 2015. While the recalculated information suggests that progress towards the MTO is less than 0,5 % of GDP in structural terms in outer years of the Convergence Programme, planned expenditure restraint would ensure that the growth rate of government expenditure, taking into account discretionary revenue measures, would be in line with the expenditure benchmark of the Stability and Growth Pact.
               At the same time, tax changes from the second half of 2012, as adopted by Parliament on 24 May 2012, which are not yet reflected in the Convergence Programme scenario but acknowledged in the letter accompanying the submission of the Convergence Programme, represent a risk to the attainment of targets in 2013 and beyond. The general government debt ratio is below 60 % of GDP, increasing from 42,6 % of GDP in 2011 to 46,7 % of GDP in 2014, as the authorities pre-fund large repayments related to the international financial assistance programme that are due in 2014-15, and falling to 38,9 % in 2015 as these repayments are made.

               (12)

               Latvia should pursue the strategy of shifting taxation from labour to taxation of consumption, property, and the use of natural and other resources, while improving the structural balance. The relatively high tax burden on low-wage earners and the high level of undeclared work indicate the need for appropriate labour-market policies, a review of the tax and benefit system and increased efforts to tackle the shadow economy. Environmental taxes remain relatively underdeveloped and are heavily dominated by motor-fuel taxation, while taxation on other energy sources, pollution and the use of natural resources is below the EU average. Further broadening the tax base to other sources of environmental taxation, in particular pollution, as well as more broad-based taxation of energy sources, would help in achieving environmental goals while providing room for a tax shift away from the taxation of labour.

               (13)

               In the process of the ongoing reform of fiscal governance, Latvia is invited to ensure adoption of the Fiscal Discipline Law by the Parliament and to develop a medium-term budgetary framework law to support the long-term sustainability of public finances. The adoption of the Fiscal Discipline Law will be in line with the commitments by the Government under the balance-of-payments programme; the draft law adopted by the Government also seeks to implement the evolving EU acquis in the area of fiscal governance into Latvian legislation. When adopted and implemented, the new law would considerably strengthen the fiscal framework in Latvia, which currently lacks an effective mechanism to limit expenditure growth in good economic times.

               (14)

               As to ensure the continuity of the pension reform, Latvia should restore contributions to the mandatory funded private pension scheme at 6 % of gross wages in 2013, from the current reduced level of 2 % of gross wages.

               (15)

               Latvia needs to strengthen and reform the social assistance system and tackle one of the highest unemployment rates in the Union. The challenge of youth unemployment became especially evident during the crisis, revealing also high skills mismatches. Special active labour market policies targeted at young people have been designed and implemented including vocational training, volunteer work and wage subsidies for young people. However, given the scale of the problem, these limited activities have a relatively small impact.

               (16)

               In 2011, 40 % of the Latvian population is facing the risk of poverty and social exclusion which has implications for the employability of the workforce and future growth prospects. Latvia adopted an Emergency Social Safety Net Strategy. Government policies to reduce poverty are concentrated on the reduction of income inequality, reduced tax burden for working families and increased access to the labour market. Nevertheless, Latvia spends relatively little on social protection and social transfers have only a low impact on poverty reduction, as a large share of social transfers is redistributed back to middle and high income earners. Spending on means tested benefits is low, while the role of social safety net is partly fulfilled by temporary low-paid public jobs. The design of social assistance benefits also contains poverty and unemployment traps and there are abuses of the system. Large inequality exists in access to social assistance across local governments and poor transparency complicates evidence-based decision making. The challenges of long-term unemployment and of youth unemployment became especially evident during the crisis. Most of the young unemployed do not possess professional qualifications. The number of young people not in employment, education or training (NEETs) is relatively high. Measures should be taken in line with the findings of the Latvian — Commission joint action team on youth unemployment.

               (17)

               Latvia should further improve energy efficiency and promote competition in major energy networks, while improving connectivity with EU energy networks. The tax system does not provide sufficient incentives for reducing energy costs and for shifting consumption and investment towards energy efficient products (transport vehicles, insulation of buildings, heating systems). Energy markets in Latvia remain dominated by monopolies. For historical reasons, the gas and electricity markets are largely separated from those of other Member States.

               (18)

               Inefficiencies in the civil justice system have a negative impact on business and the economic environment, as the risk and cost of doing business increases. There is a large backlog of proceedings in the first and second instance courts in civil and commercial cases, especially as regards contractual obligations and insolvencies. The professional performance of judges should be evaluated. Further improvements in the insolvency law regime are justified.

               (19)

               Despite the relatively high educational attainment, a significant share of the workforce does not possess professional qualifications and has limited access to higher education. Universities perform poorly in worldwide rankings and are characterised by low international competitiveness and weak governance. Low cooperation among universities, research institutions, and businesses affects the innovation performance which is very low. A systematic and effective research and innovation strategy is lacking. Latvia also has the lowest business research and development (R & D) expenditure in the Union.

               (20)

               Latvia has made a number of commitments under the Euro Plus Pact. These commitments, and the implementation of the commitments presented in 2011, relate to fostering employment, improving competitiveness, enhancing sustainability of public finances and reinforcing financial stability. The Commission has assessed the implementation of the Euro Plus Pact commitments. The results of this assessment have been taken into account in the recommendations below.

               (21)

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

               (22)

               In the light of this assessment, the Council has examined the Convergence Programme, and its opinion (7) is reflected in particular in recommendation (1) below,

         HEREBY RECOMMENDS that Latvia take action within the period 2012-13 to:

               1.

               Ensure planned progress towards the timely correction of the excessive deficit. To this end, implement the budget for the year 2012 as envisaged and achieve the fiscal effort specified in the Council recommendation under the excessive deficit procedure. Thereafter, implement a budgetary strategy, supported by sufficiently specified structural measures, for the year 2013 and beyond, to make sufficient progress towards the MTO, and to respect the expenditure benchmark. Use better than expected cyclical revenue to reduce government debt.

               2.

               Implement measures to shift taxation away from labour to consumption, property, and use of natural and other resources while improving the structural balance; ensure adoption of the Fiscal Discipline Law and develop a medium-term budgetary framework law to support the long-term sustainability of public finances; restore contributions to the mandatory funded private pension scheme at 6 % of gross wages from 2013.

               3.

               Take measures to reduce long-term and youth unemployment by fighting early school leaving, promoting more efficient vocational education and training and its apprenticeship component, enhancing the quality, coverage and effectiveness of active labour market policy and its training component and through an effective wage subsidy scheme.

               4.

               Tackle high rates of poverty and social exclusion by reforming the social assistance system to make it more efficient, while better protecting the poor. Ensure better targeting and increase incentives to work.

               5.

               Further encourage energy efficiency by implementing measures and providing incentives for reducing energy costs and shifting consumption towards energy-efficient products, including vehicles, buildings and heating systems. Promote competition in major energy networks and improve connectivity with EU energy networks.

               6.

               Take measures to improve management and efficiency of the judiciary, in particular to reduce the backlog and length of procedures. Take steps to improve the insolvency regime and the mediation laws.

               7.

               Continue reforms in higher education, inter alia, by implementing a new financing model that rewards quality, strengthens links with market needs and research institutions, and avoids fragmentation of budget resources. Design and implement an effective research and innovation policy encouraging companies to innovate, including via tax incentives, upgrading infrastructure and rationalising research institutions.

      Done at Brussels, 10 July 2012.

            For the Council

            The President

         V. SHIARLY

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Maintained for 2012 by Council Decision 2012/238/EU of 26 April 2012 on guidelines for the employment policies of the Member States (OJ L 119, 4.5.2012, p. 47).

      (3)  OJ C 215, 21.7.2011, p. 8.

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

      (5)  OJ L 79, 25.3.2009, p. 39.

      (6)  Cyclically-adjusted balance net of one-off and temporary measures, recalculated by the Commission services on the basis of the information provided in the Programme, using the commonly agreed methodology.

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


Avis juridique important

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31998H0370

98/370/EC: Commission Recommendation of 27 May 1998 on the ratification of ILO Convention No 177 on home work of 20 June 1996 (notified under document number C(1998) 764)

Official Journal L 165 , 10/06/1998 P. 0032 - 0032

COMMISSION RECOMMENDATION of 27 May 1998 on the ratification of ILO Convention No 177 on home work of 20 June 1996 (notified under document number C(1998) 764) (98/370/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community, and in particular the second indent of Article 155 thereof,Whereas ILO Convention No 177 on home work of 20 June 1996, as supplemented by a recommendation adopted on the same day, provides a framework for protecting homeworkers;Whereas that Convention requires countries which ratify it to adopt, implement and periodically review a national policy on home work aiming at improving the situation of homeworkers;Whereas the Convention also expressly states that the national policy on home work should promote, as far as possible, equality of treatment;Whereas the aims pursued by the Convention meet the objectives of the Commission as expressed in its medium-term social action programme (1995 to 1997);Whereas the aims pursued by the Convention help to promote the objective of striking a balance between flexibility of the labour market and security of the employees;Whereas the second indent of the first paragraph of Article 118 of the Treaty gives the Commission the task of promoting close cooperation between Member States in the social field, particularly in matters relating to labour law and working conditions;Whereas the Community Charter of the Fundamental Social Rights of Workers states (point 10) that 'Every worker of the European Community shall have a right to adequate social protection and shall, whatever his status and whatever the size of the undertaking in which he is employed enjoy an adequate level of social security benefits`;Whereas 6,9 million people in the Community usually perform their work at home, which at Community level is equivalent to 4,9 % of the working population;Whereas the particular vulnerability of homeworkers and the need to provide them with appropriate protection are acknowledged;Whereas the nature of home work is evolving rapidly with the introduction of new information technologies, making the need for appropriate protection even more necessary;Whereas most homeworkers are women; whereas they choose homeworking as a way to combine earning a wage needed for the household with taking care of dependants, most commonly young children; whereas this choice made by women is often a result of external factors such as limited job opportunities or lack of childcare or other supporting facilities,HEREBY RECOMMENDS:- that Member States which have not yet done so ratify the ILO home work Convention, adopted on 20 June 1996,- that Member States inform the Commission, within a period of 18 months from publication of this recommendation, of the steps taken pursuant to it.Done at Brussels, 27 May 1998.For the CommissionPádraig FLYNNMember of the Commission


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31990H0143

90/143/Euratom: Commission Recommendation of 21 February 1990 on the protection of the public against indoor exposure to radon

Official Journal L 080 , 27/03/1990 P. 0026 - 0028

*****COMMISSION  RECOMMENDATION  of 21 February 1990  on the protection of the public against indoor exposure to radon  (90/143/Euratom)  THE COMMISSION OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 33, second paragraph, thereof,  Having consulted the group of experts appointed by the Scientific and Technical Committee pursuant to Article 31 of the Treaty,  Whereas:  I  In many Member States there is increasing awareness of the significance of indoor exposure of the population to radon. Several countries already have or are drawing up dose-control policies;  It is the task of the Commission to harmonize Member States' provisions for the application of the basic safety standard for the health protection of the general public against the dangers arising from ionizing radiation;  The Commission, therefore, asked the group of experts, set up under the terms of Article 31 of the Treaty, to examine the problem and to draw up proposals for any appropriate action;  The group has now reported to the Commission and the present recommendation is based on its report;  This is without prejudice to the Commission's ongoing work of developing a global approach to the problems of indoor pollution;  II  Radon is a naturally occurring radioactive gas, the most significant isotope of which is radon-222 with a half life of 3,82 days. This is a member of the uranium-238 decay series and its presence in the environment is associated mainly with the trace amounts of its immediate parent, radium-226, in rocks and soils. The major contributor to radon concentration in dwellings is soil gas which may enter indoor air spaces through floors by pressure-driven or concentration-driven flow; in most countries, the contribution from building materials, except in special cases, is usually minor by comparison;  Recent surveys in Member States have shown average concentrations indoors of some 20 to 50 Bq/m3, with typical outdoor values an order of magnitude lower. Compared to other forms of natural radiation the chief characteristic of indoor radon levels is their variability; in many countries some dwellings exhibit radon levels more than an order of magnitude above the average;  The dose from inhaled radon gas is low in comparison to that from its short-lived radioactive daughters, which are isotopes of polonium, lead and bismuth. When inhaled, these deposit on surfaces of the human respiratory tract and the most significant doses arise from alpha irradiation of the bronchial epithelium. A task group of the International Commission on Radiological Protection (ICRP), set up to study the lung cancer risk from indoor exposure to radon daughters, reported on these doses in 1987 (1). On the basis of current exposure models it implied a conversion coefficient around 20 Bq/m3 per mSv/year between the time-averaged activity concentration of radon gas and the annual effective dose equivalent for indoor exposure of members of the public. Consequently, typical annual doses in dwellings in the Community lie in the range 1 to 2,5 mSv with a small percentage of the population in some countries receiving more than 20 mSv per year. For comparison, the current annual dose limit for exposure of members of the public to man-made radiation, as laid down in the Community basic safety standards (2), is 5 mSv;  Exposure to radon is not a new phenomenon and epidemiological studies of various groups of minors exposed to elevated concentrations at work have revealed an excess of lung cancer deaths. While at present there is no firm evidence of the effect of indoor radon exposure on the general public, on the available evidence it appears prudent for the Commission to make recommendations for limiting such exposure, as indeed the ICRP has already done (3);  It must be noted that indoor radon is controllable in the physical or engineering sense. Therefore, criteria of radiological safety would allow the development of practical guidelines for remedial action in existing buildings. For future buildings preventive measures are required based upon appropriate design and construction specifications. Such a preventive approach justifies the adoption of a design level which is lower than the reference level for remedial action in existing buildings;  Simple metrological procedures should be established to ensure that measurements of indoor radon yield data of the appropriate quality and reliability;  To promote the control of exposure to indoor radon in the Community, the Article 31 group of experts drew up detailed guidance which as been incorporated in the present recommendation and is consistent with the guidance provided by ICRP. It is achievable in a pratical sense;  Finally, it must also be mentioned that due to the special characteristics of the problem adequate public information is an important element both in improving the controllability of exposure and on assuring a positive public response,  HEREBY RECOMMENDS:  1. An appropriate system be established for reducing any exposure to indoor radon concentrations. Within this system adequate public information and response to public concern deserve particular attention.  2. For existing buildings:  (a) a reference level for consideration of remedial action be used: where exceeded, it should be cause for consideration of simple but effective measures aimed at reducing the radon level;  (b) the reference level be an effective dose equivalent of 20 mSv per annum, which for practical purposes, may be taken as equivalent to an annual average radon gas concentration of 400 Bq/m3;  (c) the urgency of the remedial action take account of the extent to which this reference level is exceeded;  (d) where remedial actions are considered necessary, the public concerned be informed on the radon levels it is exposed to and on the remedies available to reduce such levels.  3. For future constructions:  (a) a design level be used to aid the relevant authorities in establishing regulations, standards, or codes of construction practices for circumstances under which the design level might otherwise be exceeded;  (b) the design level be an effective dose equivalent of 10 mSv per annum, which for practical purposes, may be taken as equivalent to an annual average radon gas concentration of 200 Bq/m3;  (c) information be provided to those involved in the construction of new buildings, as relevant, on possible radon exposure levels, and on preventive measures which could be taken.  4. When remedial or preventative measures are being determined, the principles of optimization be applied in accordance with the Community basic safety standards (4).  5. Because of diurnal and seasonal variations of indoor radon levels, radiation protection decisions should in general be based on the annually-averaged measurements of radon gas or daughters in affected buildings using integrating techniques. The competent authorities should ensure that the quality and reliability of measurements are adequate.  6. Criteria be developed for identifying regions, sites and building characteristics likely to be associated with high indoor radon levels. Investigation levels for the underlying parameters (i.e. activity in soil and building materials, permeability of ground, etc.) could be used to identify such exposure circumstances.  This recommandation is addressed to the Member States.  Done at Brussels, 21 February 1990.  For the Commission  Carlo RIPA DI MEANA  Member of the Commission  (1) Lung cancer risks from indoor exposures to radon daughters. Annals of the ICRP, Vol. 17, No 1, 1987, Publication 50, Pergamon Press.  (2) Council Directive 80/836/Euratom of 15 July 1980 amending the Directive laying down the basic safety standards for the health protection of the general public and workers against the dangers of ionizing radiation, OJ No L 246, 17. 9. 1980, p. 1.  (3) Principles for limiting exposure of the public to natural sources of radiation. Annals of the ICRP, Vol. 14, No 1, 1984, Publication 39, Pergamon Press.  (4) Commission communication concerning the implementation of Council Directives 80/836/Euratom of 15 July 1980 amending the Directives laying down the basic safety standards for the health protection of the general public and workers against the dangers of ionizing radiation and 84/467/Euratom of 3 September 1984 amending Directive 80/836/Euratom, OJ No C 347, 31. 12. 1985, p. 9.


title: Council Recommendation of 12 July 2011 on the National Reform Programme 2011 of Romania and delivering a Council opinion on the updated Convergence Programme of Romania, 2011-2014

text:
               22.7.2011

               EN

               Official Journal of the European Union

               C 216/6

         COUNCIL RECOMMENDATION
   of 12 July 2011
   on the National Reform Programme 2011 of Romania and delivering a Council opinion on the updated Convergence Programme of Romania, 2011-2014
   2011/C 216/03
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(3) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   After consulting the Economic and Financial Committee,
   Whereas:

               (1)

               On 6 May 2009, the Council adopted Decision 2009/459/EC (2) to make available to Romania medium-term financial assistance for a period of three years under the provisions of Article 143 of the Treaty. The accompanying Memorandum of Understanding signed on 23 June 2009 and its successive supplements lay down the economic policy conditions on the basis of which the financial assistance was disbursed. Decision 2009/459/EC was amended on 16 March 2010 by Decision 2010/183/EU (3). Following Romania's successful implementation of the programme, and given a partial adjustment of the current account because of remaining structural weaknesses in Romania's product and labour markets which make the country sensitive to international price shocks, on 12 May 2011 the Council adopted Decision 2011/288/EU (4) to make precautionary medium-term financial assistance available to Romania for a period of three years under Article 143 of the Treaty. The accompanying Memorandum of Understanding was signed on 29 June 2011.

               (2)

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

               (3)

               On 13 July 2010, the Council adopted a recommendation on the broad guidelines for the economic policies of the Member States and the Union (2010 to 2014) and, on 21 October 2010, adopted a decision on guidelines for the employment policies of the Member States (5), which together form the ‘integrated guidelines’. Member States were invited to take the integrated guidelines into account in their national economic and employment policies.

               (4)

               On 12 January 2011, the Commission adopted the first Annual Growth Survey, marking the start of a new cycle of economic governance in the EU and the first European semester of ex-ante and integrated policy coordination, which is anchored in the Europe 2020 strategy.

               (5)

               On 25 March 2011, the European Council endorsed the priorities for fiscal consolidation and structural reform (in line with the Council's conclusions of 15 February and 7 March 2011 and further to the Commission's Annual Growth Survey). It underscored the need to give priority to restoring sound budgets and fiscal sustainability, reducing unemployment through labour market reforms and making new efforts to enhance growth. It requested Member States to translate these priorities into concrete measures to be included in their Stability or Convergence Programmes and National Reform Programmes.

               (6)

               On 25 March 2011, the European Council also invited the Member States participating in the Euro Plus Pact to present their commitments in time to be included in their Stability or Convergence Programmes and their National Reform Programmes.

               (7)

               On 2 May 2011, Romania submitted its 2011 Convergence Programme update covering the period 2011-2014 and its 2011 National Reform Programme. The two programmes have been assessed at the same time.

               (8)

               Between 2002 and 2008 the Romanian economy grew strongly, with real GDP growth averaging 6,3 %, above its level of potential growth. Economic growth was primarily driven by domestic demand, as strong credit and wage developments boosted private consumption and investment. This boom was also fuelled by foreign capital inflows, which led to overheating and unsustainable external and fiscal imbalances. The current account deficit peaked at 13,4 % of GDP in 2007 and decreased only marginally to 11,6 % of GDP in 2008. According to the Commission's latest long-term sustainability assessment, the risks with regard to long-term sustainability of public finances appear to be high. However, this assessment does not yet take into account the comprehensive pension reform measures undertaken in 2010, which have substantially improved the long-run sustainability of the Romanian pension system. The high external borrowing was driven by a pro-cyclical fiscal policy, with headline deficits increasing from 1,2 % of GDP in 2005 to 5,7 % of GDP in 2008 as a result of recurrent budgetary slippages, notably with respect to current spending. The financial crisis and the ensuing global economic downturn increased risk-aversion amongst investors, leading to a significant tightening of capital flows to Romania. Labour market participation did not rise despite the favourable economic conditions and the employment rate changed very little during the boom years. The employment rate then fell to 63,3 % by 2010 while the unemployment rate increased from 5,8 % in 2008 to 7,3 % in 2010 as a result of the economic downturn. Unemployment remains particularly high among vulnerable groups, e.g. the Roma population. Against this background and facing acute private financing needs, the Romanian authorities requested international and EU financial assistance in May 2009.

               (9)

               Following the successful implementation of the EU-IMF adjustment programme, and in order to consolidate these positive achievements, a precautionary EU-IMF programme for 2011-2013 was negotiated with the authorities. That new programme continues the fiscal consolidation, fiscal governance reforms and preservation of financial stability started under the 2009-2011 programme. In addition, it puts a strong emphasis on the structural reforms in product (in the energy and transport sectors) and labour markets necessary to unleash Romania’s growth potential, foster job creation and increase the absorption of EU funds. Romania remains on track to achieve the cash deficit target of 4,4 % of GDP in 2011 (below 5 % of GDP in ESA terms). This would also provide an adequate basis for achieving the deficit target of below 3 % of GDP for 2012, although additional measures may be needed according to the Commission services’ spring 2011 forecast. The authorities have also taken steps to achieve the structural reform objectives of the new programme and continue to maintain financial stability.

               (10)

               Based on the assessment of the updated Convergence Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that the macroeconomic assumptions underpinning the projections in the programme are plausible. The Convergence Programme aims to correct the excessive deficit by the 2012 deadline set by the Council in its recommendation of 16 February 2010. The programme targets headline deficits of 2,6 % of GDP in 2013 and of 2,1 % of GDP in 2014, with the envisaged consolidation being mostly expenditure-based. According to the structural balance recalculated by Commission services, the medium-term objective (MTO) will not be achieved within the programme period. The consolidation strategy appears to be frontloaded with the structural improvement being concentrated in 2011 and 2012. By contrast, there is no improvement in the structural balance in 2013 and 2014. The deficit path foreseen is appropriate in 2011 and 2012, but not in 2013 and 2014. The main risks to the budgetary targets are implementation risks, the arrears of State-owned enterprises which represent a serious contingent liability for the budget, and the reservations expressed by the Commission (Eurostat) about Romania's excessive deficit procedure notification (6). In view of the latter, Romania has committed to give priority to improving the compilation of government finance statistics in ESA 95 within the National Statistical Institute.

               (11)

               Romania has made its commitments under the Euro Plus Pact in its National Reform Programme and Convergence Programme, which were submitted on 2 May 2011. Most of these commitments have been or are being met as part of the medium-term financial assistance programme and are broadly appropriate to address existing challenges under the Pact.

               (12)

               The Commission has assessed the Convergence Programme and National Reform Programme, including the Euro Plus Pact commitments. It has taken into account not only their relevance to sustainable fiscal and socio-economic policy in Romania but also their conformity with EU rules and guidance, given the need to reinforce the overall economic governance of the EU by providing EU-level input into future national decisions.

               (13)

               In light of this assessment, also taking into account the Council Recommendation under Article 126(7) of the Treaty on the Functioning of the European Union of 16 February 2010, the Council has examined the 2011 update of the Convergence Programme of Romania and its opinion (7) is reflected in the recommendation below. Taking into account the European Council conclusions of 25 March 2011, the Council has examined the National Reform Programme of Romania,

         HEREBY RECOMMENDS that Romania:
   Implement the measures laid down in Decision 2009/459/EC as amended by Decision 2010/183/EU, together with the measures laid down in Decision 2011/288/EU and further specified in the Memorandum of Understanding of 23 June 2009 and its subsequent supplements, and in the Memorandum of Understanding of 29 June 2011 and its subsequent supplements.

      Done at Brussels, 12 July 2011.

            For the Council

            The President

         J. VINCENT-ROSTOWSKI

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  OJ L 150, 13.6.2009, p. 8.

      (3)  OJ L 83, 30.3.2010, p. 19.

      (4)  OJ L 132, 19.5.2011, p. 15.

      (5)  Maintained for 2011 by Council Decision 2011/308/EU of 19 May 2011 on guidelines for the employment policies of the Member States (OJ L 138, 26.5.2011, p. 56).

      (6)  Eurostat expressed reservations as to the quality of the Romanian EDP figures due to:

               (i)

               uncertainties about the impact of some public corporations on the government deficit;

               (ii)

               the reporting of ESA95 categories ‘other accounts receivable and payable’;

               (iii)

               the nature and impact of some financial transactions; and

               (iv)

               the consolidation of intra-governmental flows.

      (7)  Foreseen in Article 9(3) of Regulation (EC) No 1466/97.