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

text:
               9.8.2017

               EN

               Official Journal of the European Union

               C 261/53

         COUNCIL RECOMMENDATION
   of 11 July 2017
   on the 2017 National Reform Programme of Cyprus and delivering a Council opinion on the 2017 Stability Programme of Cyprus
   (2017/C 261/12)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

               On 16 November 2016, the Commission adopted the Annual Growth Survey, marking the start of the 2017 European Semester for economic policy coordination. The priorities of the Annual Growth Survey were endorsed by the European Council on 9-10 March 2017. On 16 November 2016, on the basis of Regulation (EU) No 1176/2011, the Commission adopted the Alert Mechanism Report, in which it identified Cyprus as one of the Member States for which an in-depth review would be carried out. On the same date, the Commission also adopted a recommendation for a Council Recommendation on the economic policy of the euro area, which was endorsed by the European Council on 9-10 March 2017. On 21 March 2017, the Council adopted the Recommendation on the economic policy of the euro area (‘Recommendation for the euro area’) (3).

               (2)

               As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Cyprus should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) to (5) below.

               (3)

               The 2017 country report for Cyprus was published on 22 February 2017. It assessed Cyprus’s progress in addressing the country-specific recommendations adopted by the Council on 12 July 2016, the follow-up given to the country-specific recommendations adopted in previous years and Cyprus’s progress towards its national Europe 2020 targets. It also included an in-depth review under Article 5 of Regulation (EU) No 1176/2011, the results of which were also published on 22 February 2017. The Commission’s analysis led it to conclude that Cyprus is experiencing excessive macroeconomic imbalances. In particular, it is essential that it tackles the large stock of imbalances in the form of private, public and external debt overhang, and the high level of non-performing loans.

               (4)

               Cyprus submitted its 2017 Stability Programme on 27 April 2017 and its 2017 National Reform Programme on 28 April 2017. In order to take account of their interlinkages, the two programmes have been assessed at the same time. Cyprus’s National Reform Programme includes commitments both for the short and the medium term. In particular, it includes measures to reduce private-sector indebtedness, improve the business environment, facilitate access to finance and overhaul the healthcare sector, and commits to reforms of the public sector and the justice system. The National Reform Programme also covers the challenges identified in the 2017 country report and the Recommendation for the euro area, including the need to relaunch investment and ensure the sustainability of public finances. If fully implemented within the indicated timelines, these measures would help address Cyprus’s macroeconomic imbalances and country-specific recommendations. Based on the assessment of Cyprus’s policy commitments, the Commission confirms its previous assessment that at this stage no further steps are warranted in the framework of the macroeconomic imbalance procedure provided for in Regulation (EU) No 1176/2011 and Regulation (EU) No 1174/2011 of the European Parliament and of the Council (4). The implementation of the policy reform agenda will be followed closely by means of specific monitoring.

               (5)

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

               (6)

               Cyprus is currently in the preventive arm of the Stability and Growth Pact and subject to the debt rule. In its 2017 Stability Programme, the Government plans a budgetary surplus in headline terms over 2016-2020 (headline balance around 0,4 % of GDP over the programme period). The medium-term budgetary objective, set at a balanced budgetary position in structural terms, is planned to be reached in 2017. The recalculated (6) structural balance is projected to steadily move away from the medium-term objective in the following years, which is not in line with the requirements of the preventive arm of the Stability and Growth Pact. The general government debt-to-GDP ratio is expected to have reached 107,8 % in 2016 and to decline to 99,7 % in 2018 and further to 88,8 % by 2020. The macroeconomic scenario underpinning those budgetary projections is plausible. The risks associated with the macroeconomic assumptions presented in the Stability Programme are to the downside, mainly linked to the high stock of non-performing loans and a possible deterioration of the external environment.

               (7)

               On 12 July 2016, following the correction of the excessive deficit, the Council recommended Cyprus to respect the medium-term budgetary objective in 2016 and in 2017. Based on the Commission 2017 spring forecast, Cyprus is compliant with that requirement in 2017 following an overall assessment. For 2018, Cyprus is recommended to remain at the medium-term budgetary objective. Based on the Commission 2017 spring forecast, this is consistent with a maximum nominal growth rate of net primary government expenditure (7) of 0,3 %, corresponding to a structural adjustment of 0,2 % of GDP. Under unchanged policies, Cyprus would be at risk of some deviation from that requirement in 2018 following an overall assessment. Cyprus is forecast to comply with the debt rule in 2017 and 2018. Overall, the Council is of the opinion that Cyprus needs to stand ready to take further measures to ensure compliance in 2018.

               (8)

               Public debt is on a downward trajectory but its sustainability remains subject to risks. A number of recent fiscal measures as well as delays in the implementation of key structural reforms are expected to lead to a deterioration in the structural balance and risk reducing the scope for growth-enhancing public investments.

               (9)

               The Cypriot public sector has one of the euro area’s highest wage bills (as a percentage of GDP) and remains characterised by inefficiencies. Under the macroeconomic adjustment programme, a series of reforms aiming to address this issue were designed and agreed with social partners. These included the introduction of a binding permanent mechanism limiting wage growth for public employees and a comprehensive reform of the public administration. However, with the exception of the recently adopted reform law on mobility of public employees, the adoption of these legislative reforms is facing obstacles, in particular after a negative vote by the House of Representatives in December 2016. Pending adoption in its binding form, the mechanism limiting growth of public-sector wages is being implemented under collective bargaining agreements and is applicable until 2018.

               (10)

               Some reforms have been undertaken to tackle corruption. Recent developments include reforms to professionalise public procurement at local level, and a political party funding law enacted in December 2015. A constitutional amendment enabling asset disclosure for public officials was adopted in 2016. However, the Coordinating Body against Corruption is not adequately staffed, and weaknesses in the disciplinary regime for public servants remain unaddressed.

               (11)

               Cyprus has been taking measures to reinforce its judicial system but continues to face serious challenges as regards the efficiency thereof. Inefficient court procedures and limited capacity lead to significant delays in processing court cases. This in turn undermines the business environment and, in particular, the functioning of the new foreclosure and insolvency frameworks. The latter have been introduced to help reduce unviable private debt, providing incentives to banks and debtors to agree on restructuring solutions. However, the effectiveness of these tools is impaired by a number of factors, including the aforementioned inefficiencies in the court system, weak administrative capacity and a low level of awareness of the procedures among debtors. Backlogs and delays with issuing and transferring title deeds also remain significant. These contribute to undermining debt reduction efforts and weigh on the recovery of the housing market.

               (12)

               The level of non-performing loans is declining but remains very high, hampering the proper functioning of the banking sector and impacting credit supply to the real economy. Banks underperform the loan restructuring targets agreed with the Central Bank of Cyprus, pointing to the need to broaden the targeting system and make it more efficient and binding, in particular by setting ambitious targets for the reduction of non-performing loans, consistent with banks’ reduction strategies for non-performing loans. Re-default rates remain high, exposing potential deficiencies in loan restructuring solutions. Risk provisioning levels increased but remain below the euro-area average, underscoring the need to ensure that collateral valuations are reliable and underpin appropriate risk provisioning. The lack of a secondary market for loans and a loan securitisation framework limit the scope for accelerating deleveraging and moving non-performing loans off banks’ balance sheets, which calls for additional regulatory and legislative actions to complete the necessary tools to facilitate banks’ balance-sheet management. In addition, the governance and administrative capacity of insurance and pension-fund supervision remain weak, posing risks to financial stability.

               (13)

               Cyprus’s economic recovery continues. However, potential growth remains weak, constrained by limited implementation of structural reforms, bottlenecks to investment and shortcomings in the business environment. Growth-enhancing initiatives presented in the action plan for growth are being implemented, albeit rather slowly. A legislative proposal to attract and facilitate strategic investments is still at the draft stage. The Government is working on improving access to finance for medium-sized and small businesses. In order to solve this pressing issue, some new targeted initiatives have been launched, as reported in the National Reform Programme. However, most of these new initiatives on access to finance still remain at a preliminary stage. Privatisation efforts, aimed at attracting productivity-enhancing foreign investments, are facing political opposition and progressing slowly. The reform of the energy sector can also be an important driver for competitiveness, yet there have been delays in its implementation. These concern, in particular, the unbundling of the Electricity Authority of Cyprus and the establishment of the new electricity market, which still hinges upon ensuring the effective independence of the transmission system operator.

               (14)

               Unemployment is decreasing but remains high, especially among young people and the long-term unemployed. Plans to increase the numbers of counsellors in public employment services and improve their specialisation have not yet been implemented. Moreover, their recruitment is likely to occur on temporary contracts, therefore not addressing the challenge in structural terms. As a consequence, there is still insufficient capacity to meet the needs of jobseekers, especially those having more difficulties to integrate in the labour market, and to put in place outreach measures for their activation. The impact of active labour market programmes and income support schemes continues to be constrained by limited quality assessment and follow-up measures.

               (15)

               Cyprus maintains a level of spending in education that is above the Union average. However, educational outcomes are low and have even declined compared to previous years. According to the 2015 results of the Programme for International Student Assessment, Cyprus ranks among the lowest in the Union on the level of basic skills in mathematics, science and reading. While recently introduced remedial measures such as a better system for appointing teachers and a modernisation of school curricula are first steps in the right direction, further action to complete planned reforms, including of teachers’ evaluation, could significantly contribute to improving the situation.

               (16)

               Skills mismatches in the labour market are still largely unaddressed, affecting prospects for long-term sustainable growth. Participation levels are low in upper-secondary vocational education and training and the labour market relevance of higher education is weak, resulting in a high share of tertiary graduates working in occupations that do not necessarily require a tertiary degree.

               (17)

               The Cypriot healthcare sector remains characterised by a lack of universal coverage and various levels of inefficiency. This limits access to adequate and effective care. Legislation aiming to create a national health system and provide public hospitals with greater autonomy is key to improving the capacity and cost-effectiveness of the healthcare sector but is still pending parliamentary adoption.

               (18)

               In the context of the 2017 European Semester, the Commission has carried out a comprehensive analysis of Cyprus’s economic policy and published it in the 2017 country report. It has also assessed the 2017 Stability Programme, the 2017 National Reform Programme and the follow-up given to the recommendations addressed to Cyprus in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Cyprus, but also their compliance with Union rules and guidance, given the need to strengthen the Union’s overall economic governance by providing Union-level input into future national decisions.

               (19)

               In the light of this assessment, the Council has examined the 2017 Stability Programme and its opinion (8) is reflected in particular in recommendation (1) below.

               (20)

               In the light of the Commission’s in-depth review and this assessment, the Council has examined the 2017 National Reform Programme and the 2017 Stability Programme. Its recommendations made under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) to (4) below,

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

               (1)

               Pursue its fiscal policy in line with the requirements of the preventive arm of the Stability and Growth Pact, which entails remaining at its medium-term budgetary objective in 2018. Use windfall gains to accelerate the reduction of the general government debt ratio. By the end of 2017, adopt key legislative reforms aiming to improve efficiency in the public sector, in particular on the functioning of public administration, governance of state-owned entities and local governments.

               (2)

               Increase the efficiency of the judicial system by modernising civil procedures, implementing appropriate information systems and increasing the specialisation of courts. Take additional measures to eliminate impediments to the full implementation of the insolvency and foreclosure frameworks, and to ensure reliable and swift systems for the issuance of title deeds and the transfer of immovable property rights.

               (3)

               Accelerate the reduction of non-performing loans by setting related quantitative and time-bound targets for banks and ensuring accurate valuation of collateral for provisioning purposes. Create the conditions for a functional secondary market for non-performing loans. Integrate and strengthen the supervision of insurance companies and pension funds.

               (4)

               Accelerate the implementation of the action plan for growth, focusing in particular on fast-tracking strategic investments and improving access to finance, and, by the end of 2017, resume the implementation of the privatisation plan. Take decisive steps towards the ownership unbundling of the Electricity Authority of Cyprus and, in particular, proceed with the functional and accounting unbundling by the end of 2017.

               (5)

               Speed up reforms aimed at increasing the capacity of public employment services and improving the quality of active labour market policies delivery. Complete the reform of the education system to improve its labour market relevance and performance, including teachers’ evaluation. By the end of 2017, adopt legislation for a hospital reform and universal healthcare coverage.

      Done at Brussels, 11 July 2017.

            For the Council

            The President

         T. TÕNISTE

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  OJ C 92, 24.3.2017, p. 1.

      (4)  Regulation (EU) No 1174/2011 of the European Parliament and of the Council of 16 November 2011 on enforcement measures to correct excessive macroeconomic imbalances in the euro area (OJ L 306, 23.11.2011, p. 8).

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

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

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

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


title: Council Recommendation of 12 February 2008 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (Sixth EDF) for the financial year 2006

text:
               15.2.2008

               EN

               Official Journal of the European Union

               L 41/21

      COUNCIL RECOMMENDATION

   of 12 February 2008
   concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (Sixth EDF) for the financial year 2006
   (2008/115/EC)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty establishing the European Community,
   Having regard to the Third ACP-EEC Convention, signed at Lomé on 8 December 1984 (1),
   Having regard to Internal Agreement 86/126/EEC on the financing and administration of Community aid (2), and in particular Article 29(3) thereof,
   Having regard to the Financial Regulation 86/548/EEC of 11 November 1986 applicable to the Sixth European Development Fund (Sixth EDF) (3), and in particular Articles 66 to 73 thereof,
   Having examined the revenue and expenditure account and the balance sheet relating to the Sixth EDF as at 31 December 2006 and the Court of Auditors’ report concerning the financial year 2006 together with the Commission’s replies (4),
   Whereas:

               (1)

               Pursuant to Article 29(3) of the Internal Agreement, the discharge for the financial management of the Sixth EDF is to be given to the Commission by the European Parliament on the recommendation of the Council.

               (2)

               The overall implementation by the Commission of the operations of the Sixth EDF during the financial year 2006 has been satisfactory,

         HEREBY RECOMMENDS that the European Parliament give the Commission a discharge in respect of the implementation of the operations of the Sixth EDF for the financial year 2006.

      Done at Brussels, 12 February 2008.

            For the Council

            The President

         A. BAJUK

      (1)  OJ L 86, 31.3.1986, p. 3.

      (2)  OJ L 86, 31.3.1986, p. 210. Agreement as amended by Decision 86/281/EEC (OJ L 178, 2.7.1986, p. 13).

      (3)  OJ L 325, 20.11.1986, p. 42.

      (4)  OJ C 259, 31.10.2007, p. 1.


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

text:
               9.8.2017

               EN

               Official Journal of the European Union

               C 261/58

         COUNCIL RECOMMENDATION
   of 11 July 2017
   on the 2017 National Reform Programme of Latvia and delivering a Council opinion on the 2017 Stability Programme of Latvia
   (2017/C 261/13)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

               On 16 November 2016, the Commission adopted the Annual Growth Survey, marking the start of the 2017 European Semester for economic policy coordination. The priorities of the Annual Growth Survey were endorsed by the European Council on 9-10 March 2017. On 16 November 2016, on the basis of Regulation (EU) No 1176/2011 of the European Parliament and of the Council (2), the Commission 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. On the same date, the Commission also adopted a recommendation for a Council Recommendation on the economic policy of the euro area, which was endorsed by the European Council on 9-10 March 2017. On 21 March 2017, the Council adopted the Recommendation on the economic policy of the euro area (‘Recommendation for the euro area’) (3).

               (2)

               As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Latvia should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) to (2) below.

               (3)

               The 2017 country report for Latvia was published on 22 February 2017. It assessed Latvia’s progress in addressing the country-specific recommendations adopted by the Council on 12 July 2016, the follow-up given to the country-specific recommendations adopted in previous years and Latvia’s progress towards its national Europe 2020 targets.

               (4)

               On 20 April 2017, Latvia submitted its 2017 National Reform Programme and its 2017 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (5)

               Relevant country-specific recommendations have been addressed in the programming of the European Structural and Investment Funds (ESI Funds) for the 2014-2020 period. As provided for in Article 23 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council (4), where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking effectiveness of the ESI Funds to sound economic governance.

               (6)

               Latvia is currently in the preventive arm of the Stability and Growth Pact. In its 2017 Stability Programme, the Government plans a deterioration of the headline balance from a balanced position in 2016 to a deficit of 0,8 % of GDP and of 1,6 % of GDP in 2017 and 2018 respectively, as a result of a significant tax reform, followed by an improvement to a deficit of 0,5 % of GDP in 2020. The 2017 Stability Programme estimates the structural balance to deteriorate from 0,2 % of GDP in 2016 to -1,7 % of GDP in 2018 and to reach -0,8 % of GDP in 2020. This path is consistent with the medium-term budgetary objective of a structural deficit of 1 % of GDP and the allowed deviations based on the pension reform and the structural reform clause for the healthcare sector. The recalculated (5) structural balance is estimated to increase from -1,9 % of GDP in 2017 to -2,3 % of GDP in 2018, before declining to -0,2 % of GDP in 2020. According to the 2017 Stability Programme, the general government debt-to-GDP ratio is expected to stay around 40 % of GDP in 2017. The programme’s GDP growth projections are broadly in line with the Commission forecast for 2017, but they appear markedly favourable for 2018.

               (7)

               On 12 July 2016, the Council recommended Latvia to ensure that the deviation from the medium-term budgetary objective in 2017 is limited to the allowances linked to the systemic pension reform and the major structural reform in the healthcare sector. Taking into account these allowances, the structural balance would be allowed to deteriorate by a maximum of 1,0 % of GDP in 2017. Based on the Commission 2017 spring forecast, Latvia is projected to comply with that requirement in 2017. In 2018, Latvia should achieve its medium-term budgetary objective, taking into account the allowances related to the implementation of the systemic pension reform granted for 2016 and related to the structural reform granted for 2017, as temporary deviations are carried forward for a period of 3 years. Based on the Commission 2017 spring forecast, this is consistent with a maximum nominal growth rate of net primary government expenditure (6) of 6,0 % in 2018, corresponding to deterioration in the structural balance of 0,3 % of GDP. Under unchanged policies, Latvia would be at risk of a significant deviation from that requirement. Overall, the Council is of the opinion that further measures will be needed in 2018 to comply with the provisions of the Stability and Growth Pact.

               (8)

               Income inequality in Latvia is high. The ratio of incomes of the richest 20 % of households to that of the poorest 20 % stood at 6,5 in 2015, among the highest in the Union, although the figure decreased slightly in 2016. The difference between income inequality before and after taxes and social transfers is among the smallest in the Union. Latvia’s tax system is less progressive than those of other Member States, contributing to the high inequality and in-work poverty. The tax wedge on low-wage earners remains among the highest in the Union, while the revenue potential of taxes which are less detrimental to growth is underused. The low tax revenue share in GDP limits resources for sustainable delivery of public services. Despite some progress in fighting tax evasion, tax compliance remains a serious challenge. The 2017 Stability Programme announced the introduction of a tax reform. The key measures include a reduction of the personal income tax rate from 23 % to 20 % for incomes up to 45 000 euros per year, an increase in the income-differentiated basic allowance, an introduction of 0 % corporate income tax rate for reinvested profits and aligning of capital tax rates at 20 %. The reform addresses the country-specific recommendations insofar as the tax wedge on low-income earners is reduced. However, the tax reform is limited in terms of shifting taxation to sources less detrimental to growth and achieving the stated policy objective of increasing tax revenue share in GDP.

               (9)

               Weaknesses in basic social safety nets contribute to high poverty and inequalities, including for people with disabilities and the elderly. Poverty rates for people with disabilities are among the highest in Europe. The low adequacy of social assistance benefits, which has not improved since 2009, and of pensions does not provide effective protection against poverty and social exclusion. The absence of minimum income level reform, announced in 2014 but never implemented, negatively affects the poorest households, although medium-term plans on minimum income support are in preparation.

               (10)

               With a declining labour force, employment growth has been weak, while unemployment has been falling only slowly. Employment prospects are better in centres of economic activity and for high-skilled workers, whereas unemployment is more prevalent among the low-skilled and those living in rural areas. In this context, upskilling the workforce will contribute to addressing these issues. However, even though the attractiveness of vocational education has improved, the curriculum reform aligning education with contemporary skills requirements has made limited progress. The regulatory framework for work-based learning has been put in place and an active participation of social partners and companies in its implementation is warranted. Moreover, involvement of the unemployed in active labour market measures is lower than in most other Member States but measures have been taken to improve this situation and they are worth pursuing. The participation in lifelong learning remains low.

               (11)

               Although the Latvian authorities have successfully initiated relevant reforms of the healthcare system, large out-of-pocket payments, long waiting lines, a low level of public spending and inefficient allocation of services limit access to healthcare. Quota-controlled public spending leads to delayed treatment and patients either have to wait a long time or pay for the service out-of-pocket, which leaves part of the population with unmet healthcare needs. Initial steps have been taken to reform the quality assurance system and progress should continue to improve patient and population outcomes. There is some progress in increasing the efficiency of the healthcare system but further rationalisation of the hospital sector, improved access to outpatient and primary care and a more efficient link between budget allocation and service quality and costs are needed.

               (12)

               Latvian authorities tend to make regular recourse to public procurement procedures for the purchases made in the healthcare sector, but further efficiency gains could be achieved through regular use of e-procurement and central purchasing, making public expenditure more transparent and efficient.

               (13)

               Weaknesses in regulatory quality and low public administration efficiency and effectiveness have a negative impact on the business environment. In 2016 the Government presented an ambitious reform plan for a leaner and more professional public sector, aiming at improving efficiency through reductions in staff and centralisation of support functions, strengthening performance-based payment and increasing transparency. This plan is limited to the central administration, while significant efficiency gains may also be realised at municipal level.

               (14)

               Corruption continues to hamper Latvia’s business environment, and the system for preventing conflicts of interest remains rigid and formalistic, with insufficient verification. Although the reform of the insolvency system has been largely completed, its effective implementation needs to be carefully monitored to address the limited number of restructuring cases and low recovery rate of assets.

               (15)

               Large-scale reforms of higher education and public research were introduced in the past 3 years to consolidate research institutions and to increase the quality and relevance of their output. However, the governance and the organisational structure of Latvian public research funding remain inefficient, with funding functions scattered between many institutions. Inefficient funding for public research contributes to a very low scientific performance, a lack of skilled human resources in both the public and private sectors and low levels of public-private cooperation. Latvia’s business R & D intensity remains one of the lowest in the Union.

               (16)

               In the context of the 2017 European Semester, the Commission has carried out a comprehensive analysis of Latvia’s economic policy and published it in the 2017 country report. It has also assessed the 2017 Stability Programme, the 2017 National Reform Programme and the follow-up given to the recommendations addressed to Latvia in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Latvia, but also their compliance with Union rules and guidance, given the need to strengthen the Union’s overall economic governance by providing Union-level input into future national decisions.

               (17)

               In the light of this assessment, the Council has examined the 2017 Stability Programme, and its opinion (7) is reflected in particular in recommendation (1) below,

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

               1.

               Pursue its fiscal policy in line with the requirements of the preventive arm of the Stability and Growth Pact, which entails achieving its medium-term budgetary objective in 2018, taking into account the allowances linked to the implementation of the systemic pension reform and of the structural reforms for which a temporary deviation is granted. Reduce taxation for low-income earners by shifting it to other sources that are less detrimental to growth and by improving tax compliance.

               2.

               Improve the adequacy of the social safety net and upskill the labour force by speeding up the curricula reform in vocational education. Increase the cost-effectiveness of and access to healthcare, including by reducing out-of-pocket payments and long waiting times.

               3.

               Increase efficiency and accountability in the public sector, in particular by simplifying administrative procedures and strengthening the conflict-of-interest prevention regime, including for insolvency administrators.

      Done at Brussels, 11 July 2017.

            For the Council

            The President

         T. TÕNISTE

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  OJ C 92, 24.3.2017, p. 1.

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

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

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

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


title: Council Recommendation of 10 July 2012 on the National Reform Programme 2012 of Finland and delivering a Council opinion on the Stability Programme of Finland, 2012-2015

text:
               24.7.2012

               EN

               Official Journal of the European Union

               C 219/28

         COUNCIL RECOMMENDATION
   of 10 July 2012
   on the National Reform Programme 2012 of Finland and delivering a Council opinion on the Stability Programme of Finland, 2012-2015
   2012/C 219/08
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the 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 (3), 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 (4) on Finland’s National Reform Programme for 2011 and delivered its opinion on Finland’s updated Stability Programme for 2011-2014.

               (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, adopted the Alert Mechanism Report, in which it identified Finland 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)

               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.

               (7)

               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.

               (8)

               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.

               (9)

               On 19 April 2012, Finland submitted its Stability Programme covering the period 2012-2015 and its 2012 National Reform Programme. In order to take account of their interlinkages, the two Programmes have been assessed at the same time. The Commission has also assessed, in an in-depth review under Article 5 of Regulation (EU) No 1176/2011, whether Finland is affected by macroeconomic imbalances. The Commission concluded in its in-depth review that Finland is experiencing an imbalance, although not an excessive one.

               (10)

               Based on the assessment of the Stability Programme pursuant to Article 5(1) of Regulation (EC) No 1466/97, the Council is of the opinion that the macroeconomic scenario underpinning the budgetary projections in that Programme is plausible for the 2012-2013 period, GDP growth expected in that Programme is in line with the Commission services 2012 spring forecast. Projections are also realistic for the years 2014 and 2015 as they foresee GDP growth to be substantially lower than encountered before the crisis and lower than in the recovery years 2010-2011.
               The main budgetary goal of the Stability Programme is to reduce the central government deficit by limiting expenditures and increasing revenues. As the central government budget is the main source of the general government deficit, improving its position will contribute to the balancing of the general government budget. The medium-term budgetary objective (MTO) of a surplus of 0,5 % of GDP in structural terms reflects adequately the requirements of the Stability and Growth Pact. Based on the (recalculated) structural budget balance (5), Finland has met the MTO in 2011 but would marginally deviate from it over 2012-2015. The rate of growth of government expenditure, taking into account discretionary revenue measures, complies with the expenditure benchmark of the Stability and Growth Pact in all years except 2015. The Stability Programme aims at balancing the general government budget by 2015 and reaching surpluses as from 2016. The debt ratio is well below 60 % of GDP and according to the Stability Programme, the debt level will peak in 2014 at close to 52 % of GDP and then start to decline. A notable sustainability gap still exists in Finland’s public finances, mainly stemming from a rapidly deteriorating dependency ratio caused by an ageing population. The sustainability gap in public finances needs to be continuously monitored and measures adjusted accordingly. Finland’s fiscal framework is anchored to multi-annual expenditure ceilings, but these do not currently apply for the municipal sector.

               (11)

               The productivity of public services has been in decline over the past decade. The Finnish authorities have already implemented several reforms to address the issue, but their implementation has been slow, especially at the local government level. In addition, a nation-wide municipal reform and a central government productivity programme are underway. Further productivity gains and cost savings could be achieved by encouraging more competition in shielded private and public service sectors, through further product and labour market deregulation.

               (12)

               Over the past year, the Government has introduced new measures to reduce youth and long-term unemployment. These measures have included a pilot programme to reduce long-term unemployment and introduction of a social guarantee for young people. The measures introduced are ambitious and relevant, but now need to be implemented with a clear focus on improving the skill levels and labour market position of the target groups. In view of demographic changes, raising the employment rate of older workers is important to ensure sustainable public finances and meet the demand for labour in the future. The increase in life expectancy has been more rapid than envisaged during the 2005 pension reform, and therefore over time the current statutory retirement age range could turn out to be too low. In its Stability Programme, the Government committed itself to increase the effective retirement age to 62,4 years by 2025. In March 2012, the social partners agreed to several measures to lengthen working careers. The Government has committed itself to carry out a pension reform no later than 1 January 2017. The focus now needs to be on implementing the agreed line of action in the short term.

               (13)

               Regulatory barriers in the services sector in Finland are still restrictive and market concentration is high not only in retail trade, but also in areas of production. In the grocery retail market, Finland has the highest degree of market concentration while food prices are among the highest in Europe. Competition law fines in Finland have traditionally been low, raising issues regarding their deterrent effect. There have been some policy developments on competition, such as the new Competition Act and a new law on land use planning and construction. The Government is also committed to launching a new programme on promoting competition. This should be brought forward without delay with a view to further strengthening the competition framework in product and service markets.

               (14)

               Productivity growth in Finland is stagnating and Finnish exporting firms’ market share in foreign markets has decreased over recent years. Unit labour costs have increased, although not in the manufacturing sector. Growth in some currently dominant industries, especially electronics and paper, appear to have peaked and, in general, the share of manufacturing in GDP is declining. Finland is exporting intermediate and investment goods mainly to mature, slowly-growing economies and its products have limited presence in developing economies. The Finnish economy needs to become more diversified both in terms of companies as in terms of export markets in order to develop multiple strong exporters in the future. Notwithstanding the past strong Finnish research and development (R&D) and innovation performance, without a significant increase in the number of innovative high-growth firms, Finland’s ranking as an EU innovation leader risks declining. This requires facilitating innovation, enabling the transformation from R&D into marketable products, and encouraging the penetration of fast growing export markets. In the short term, it will also be crucial to exploit and disseminate the extensive information and communication technology (ICT) know-how also in other industries in Finland, including the public sector. Regarding wage growth, the tripartite wage agreement of 2011 paves the way for modest wage increases in 2012 and 2013, which should improve Finland’s relative position vis-à-vis its main trading partners.

               (15)

               Finland has made a number of commitments under the Euro Plus Pact. These commitments, and the implementation of the commitments presented in 2011, relate to improving competitiveness, the employment rate and the sustainability of public finances, strengthening financial stability and ensuring tax coordination. 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.

               (16)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Finland’s economic policy. It has assessed the Stability Programme and the National Reform Programme, and presented an in-depth review. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Finland 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 (5) below.

               (17)

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

               (18)

               In the light of the results of the Commission’s in-depth review and this assessment, the Council has examined the National Reform Programme and the Stability Programme. Its recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in particular in recommendation (5) below,

         HEREBY RECOMMENDS that Finland take action within the period 2012-2013 to:

               1.

               Preserve a sound fiscal position in 2012 and beyond by correcting any departure from the MTO that ensures the long-term sustainability of public finances. To this end, reinforce and rigorously implement the budgetary strategy, supported by sufficiently specified measures, for the year 2013 and beyond, including meeting the expenditure benchmark. Continue to carry out annual assessments of the size of the ageing-related sustainability gap and adjust public revenue and expenditure in accordance with the long-term objectives and needs. Integrate the local government sector better in the system of multi-annual fiscal framework including through measures to control expenditure.

               2.

               Take further measures to achieve productivity gains and cost savings in public service provision, including structural changes and efficiency-enhancing territorial administrative reforms, also in order to respond to the challenges arising from an ageing population.

               3.

               Implement the ongoing measures to improve the labour market position of young people and the long-term unemployed, with a particular focus on skills development. Take further steps to improve the employment rate of older workers, including by reducing early exit pathways. Take measures to increase the effective retirement age taking into account the improved life expectancy.

               4.

               Continue enhancing competition in product and service markets, especially in the retail sector, by ensuring the effective implementation of the new Competition Act and the new programme on promoting healthy competition. Continue to take measures to increase the efficiency of municipal service provision, including increasing, where appropriate, the share of services subject to competitive bidding, and to ensure competition neutrality between private and public undertakings. Take further steps to ensure that competition law fines have a sufficiently deterrent effect.

               5.

               In order to strengthen productivity growth and external competitiveness, continue efforts to diversify the business structure, in particular by hastening the introduction of planned measures to broaden the innovation base while continuing to align wage and productivity developments fully respecting the role of social partners and in line with national practices.

      Done at Brussels, 10 July 2012.

            For the Council

            The President

         V. SHIARLY

      (1)  OJ L 209, 2.8.1997, p. 1.

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

      (3)  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).

      (4)  OJ C 216, 22.7.2011, p. 3.

      (5)  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.

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


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

text:
               24.7.2012

               EN

               Official Journal of the European Union

               C 219/58

         COUNCIL RECOMMENDATION
   of 10 July 2012
   on the National Reform Programme 2012 of Luxembourg and delivering a Council opinion on the Stability Programme of Luxembourg, 2012-15
   2012/C 219/17
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the 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 Luxembourg’s National Reform Programme for 2011 and delivered its opinion on Luxembourg’s updated Stability 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 Luxembourg 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)

               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.

               (7)

               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.

               (8)

               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 their National Reform Programmes.

               (9)

               On 27 April 2012, Luxembourg submitted its 2012 Stability 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.

               (10)

               Based on the assessment of the Stability Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that the macroeconomic scenario underpinning the budgetary projections in the Stability Programme is plausible. In particular, the Stability Programme scenario for 2012 and 2013 is very close to the Commission services’ 2012 spring forecast. Medium-term deficit projections are made under a slightly optimistic growth scenario, above potential growth, although still well below average historic rates. The objective of the budgetary strategy outlined in the Stability Programme is to bring the deficit from 1,5 % in 2012 to 0,9 % in 2014 with a package of consolidation measures of around 1,2 % of GDP and provide greater room for manoeuvre in case of negative shocks. The Stability Programme confirms the previous medium-term budgetary objective (MTO) of a structural surplus of 0,5 %. However, this MTO cannot be regarded as appropriate under the provisions of the Stability and Growth Pact because, based on current policies and projections, this MTO does not appear to take sufficiently into account the implicit liabilities related to ageing, despite the debt being below the Treaty reference value. Moreover, based on both the Commission services’ 2012 spring forecast as well as on the (recalculated) structural budget balance in the Stability Programme, Luxembourg would significantly depart from its own MTO starting from 2012. The growth rate of government expenditure, net of discretionary revenue measures, is expected to significantly exceed the expenditure benchmark as defined in the Stability and Growth Pact. At 20 % of GDP, gross government debt is below the Treaty reference value.

               (11)

               On 20 January 2012, the Government adopted a draft law to reform the pension system for both the private and the public sectors. The reform would build in some corrective mechanisms in case of an adverse evolution of the financial situation of the scheme and contains adaptations to the very generous calculations method of benefits. However, the new calculation method will be phased in over a very long time horizon of 40 years. Moreover the possibilities for early retirement remain broadly unchanged and no measures have been proposed to link the statutory retirement age to life expectancy. Overall, Luxembourg is taking steps into the right direction, but the proposed reform does not seem to constitute a sufficient guarantee of long-term sustainability of public finances.

               (12)

               In January 2012, the Parliament adopted a law to limit the application of the automatic indexation of wages between 2012 and 2014 in order to increase the competitiveness of the Luxembourg economy. However, besides a possible modification of the reference index, the Government has not announced any further plans for a permanent revision of the wage-setting system. While Luxembourg’s productivity is currently very high, the room for manoeuvre in terms of productivity gains is getting smaller. A permanent revision of the wage-setting system, in consultation with social partners and in accordance with national practices, is necessary to preserve the competitiveness of the Luxembourg economy in the longer term.

               (13)

               Luxembourg has taken some relevant and credible steps to tackle its relatively high youth unemployment. However, in order to ease young people’s integration into the labour market, a coherent strategy is needed to, inter alia, strengthen collaboration between municipalities and improve the effectiveness of employment services. Young jobseekers, and particularly those with lower education level, would also benefit from more investment in training and education.

               (14)

               Luxembourg is expected to face difficulties in reaching its 2020 target for greenhouse gas (GHG) emission reduction. According to the latest 2020-projections based on existing measures, Luxembourg is expected to increase its emissions in non-ETS (Emissions trading sectors) by 6 % between 2005 and 2020, compared to a reduction target of 20 %. The road sector represents the most significant source of emissions and possesses a large emission reduction potential. The price of transport fuels remains one of the lowest in the EU, encouraging ‘fuel tourism’ and inducing negative externalities in terms of pollution and congestion. Additional policies are necessary to reduce GHG emissions, or costly flexibility mechanisms will have to be used.

               (15)

               Luxembourg has made a number of commitments under the Euro Plus Pact. The commitments, and the implementation of the commitments presented in 2011, relate to improving competitiveness, enhancing employment and strengthening 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.

               (16)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Luxembourg’s economic policy. It has assessed the Stability Programme and National Reform Programme. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Luxembourg 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 (5) below.

               (17)

               In the light of this assessment, the Council has examined the Stability Programme, and its opinion (5) is reflected in particular in recommendation (1) below,

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

               1.

               Preserve a sound fiscal position by correcting any departure from a MTO that ensures the long-term sustainability of public finances, in particular taking into account implicit liabilities related to ageing. To this end, reinforce and rigorously implement the budgetary strategy, supported by sufficiently specified measures, for the year 2013 and beyond, including meeting the expenditure benchmark.

               2.

               Strengthen the proposed pension reform by taking additional measures to increase the participation rate of older workers, in particular by preventing early retirement, and by taking further steps to increase the effective retirement age, including through linking the statutory retirement age to life expectancy, in order to ensure the long-term sustainability of the pension system.

               3.

               Take further steps to reform, in consultation with the social partners and in accordance with national practice, the wage bargaining and wage indexation system, with a view to preserve the competitiveness of the Luxembourg economy in the longer term, as a first step by maintaining the current one-year indexation interval beyond 2014 and by reducing the impact of energy and other volatile items on the reference index.

               4.

               Continue efforts to reduce youth unemployment by reinforcing stakeholders’ involvement, and by strengthening training and education measures, in particular for those with low education levels, with the aim of better matching young people’s skills and qualifications to labour demand.

               5.

               Ensure that the targets for reducing greenhouse gas emissions from non-ETS (Emissions Trading System) activities will be met, in particular by increasing taxation on energy products.

      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 210, 16.7.2011, p. 5.

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

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


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32001H0115

Commission Recommendation of 17 January 2001 on the maximum permitted blood alcohol content (BAC) for drivers of motorised vehicles (Text with EEA relevance) (notified under document number C(2000) 4397)

Official Journal L 043 , 14/02/2001 P. 0031 - 0036

Commission Recommendationof 17 January 2001on the maximum permitted blood alcohol content (BAC) for drivers of motorised vehicles(notified under document number C(2000) 4397)(Text with EEA relevance)(2001/115/EC)THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community, and in particular Article 71 thereof,Whereas:(1) One of the objectives of the common transport policy is to lay down common rules applicable to international transport within the Community, in particular with regard to the safety of road users in the Member States.(2) The Commission adopted a road safety programme of specific measures to improve road safety in April 1997(1), and priorities were established in March 2000(2).(3) The growth in road passenger and freight transport since 1988 has increased exposure to road accidents in the past decade.(4) It has been estimated that between 1 % and 5 % of drivers in traffic have BAC levels above their maximum national BAC limits and that such drivers are proportionately much more likely to be involved in road accidents, accounting for up to 20 % of fatal and serious injuries, and up to 25 % of driver fatalities. There is a need to separate irresponsible drinking behaviour from driving.(5) It is estimated that at least 10000 drivers, passengers, pedestrians and cyclists are killed every year in road accidents in which a driver's competence was impaired due to alcohol on roads in the Community.(6) Research confirms that the relative risk of accident involvement increases significantly at BAC levels above 0,5 mg/ml and that for the average driver the relative risk of accident involvement is about twice that of a driver with zero BAC, within the 0,5 to 0,8 mg/ml range. In fatal accidents the relative risk is much higher.(7) The primary aim of a more uniform maximum BAC limit within the Community is to provide a clearer and more consistent message to drivers of passenger and freight vehicles that, above a certain limit, alcohol and driving is a dangerous activity and that different limits in different Member States are potentially confusing and weaken the message that driving under the influence of alcohol is dangerous.(8) A more uniform BAC limit will provide a clearer reference for national enforcement. Wherever drivers are driving within the Community they should be more aware of a more uniform limit above which, if they are caught, they will be subject to the penalties applicable in the national jurisdiction where the offence was committed.(9) There is ample evidence that reductions in BAC limits, supported by effective enforcement and publicity, can reduce inappropriate drinking and driving at all BAC levels.(10) It is estimated that at least a 10 % reduction in all fatalities in accidents involving inappropriate drinking and driving is not unreasonable from a package of measures incorporating national enforcement and publicity based around reduced BAC limits, and that greater reductions are possible from more extensive enforcement.(11) It is likely that the social value of complementary concerted action to reduce inappropriate drinking and driving, based around a more uniform regime of BAC limits, is more than likely to outweigh the costs of enforcement and economic adjustment.(12) Most Member States have already adopted 0,5 mg/ml as their maximum permissible BAC limit.(13) An even lower BAC limit of 0,2 mg/ml is relevant for those drivers and riders who have a much higher accident risk, either because of their lack of experience and/or the type of vehicles they drive, and also for drivers of large goods and passenger carrying vehicles, and also for drivers of vehicles carrying dangerous goods.(14) Member States need to be particularly aware of the increased accident risk arising from the use of some illegal and legal drugs with alcohol and the need to reflect this in their national legislation.(15) Member States should appreciate the mutual benefit to be derived from sharing BAC (and breath equivalent) test information to increae the sample size for assessing the efficacy of measures to reduce inappropriate drinking and driving, and also from sharing research evidence about driver impairment.(16) Inappropriate drinking and driving is also a significant public health problem, to the extent that Article 152 of the Treaty seeks to ensure that a high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities. Furthermore, Community action in the field of public health shall be directed towards improving public health, preventing human illness and disease and obviating sources of danger to health.(17) Article 152 provides for Community competence in public health in so far as the Community contributes to it by encouraging cooperation between Member States and, if necessary, by lending support to their action, and by taking any useful initiative, in close contact with the Member States, to promote the coordination of the Member States' policies and programmes.(18) In the Communication from the Commission on the Health Strategy of the European Community and the proposal for a decision of the European Parliament and the Council adopting a programme for action in the field of public health (2001 to 2006)(3), alcohol is one of the areas mentioned in which particular measures and actions could be undertaken such as the development of measures to reduce or eliminate the risk of injury or death.(19) Within this framework the drink-driving problem is certainly one of the most important issues to be considered from an alcohol policy perspective. It is, however, one of the less controversial issues from a risk reduction point of view although not necessarily so from a political point of view,HEREBY RECOMMENDS:DEFINITIONS1. For the purposes of this Recommendation the following definitions apply:(a) "driver of a vehicle" means any driver of a motorised vehicle with three or more wheels,(b) "rider of a vehicle" means only the driver of any motorised two-wheel vehicle and shall not include any accompanying pillion passengers,(c) "inexperienced driver" means:(i) any learner driver who is learning to drive and who does not hold a driving licence in accordance with Council Directive 91/439/EEC(4). This shall include provisional driving licence holders, accompanied unlicensed learner drivers under instruction - conduite accompagnée, or drivers attending driving school,(ii) any novice driver who has held a driving licence in accordance with Council Directive 91/439/EEC for less than two years and may or may not be taking part in a probationary driving scheme,(d) "large vehicle" means a heavy goods vehicle greater than 3,5 tonnes gross vehicle weight, and any passenger carrying vehicle with more than eight passenger seats,(e) "vehicle carrying dangerous goods" means a vehicle displaying the identification plate, and drivers carrying the training certificate, referred to in Appendix B5 and Appendix B6 respectively to Council Directive 94/55/EC(5).TACKLING THE ISSUE OF THE INAPPROPRIATE DRINKING OF ALCOHOL BY DRIVERS AND RIDERS2. All Member States should adopt a legal maximum blood alcohol content (BAC) limit of 0,5 mg/ml, or lower, for drivers and riders of all motorised vehicles.3. All Member States should adopt a lower legal maximum blood alcohol content (BAC) of 0,2 mg/ml, or lower, for the following groups of road user:(a) inexperienced drivers;(b) riders of two-wheeled motor vehicles;(c) drivers of large vehicles;(d) drivers of vehicles carrying dangerous goods.4. All Member States should adopt random breath testing to deter drivers from drinking to the extent that every driver has a realistic statistical probability of being tested to the current best practice standard of at least once every three years.5. All Member States should work towards the acceptance of the draft Measuring Instruments Directive to harmonise the accuracy of alcohol breath testing devices.FOLLOW-UP AT COMMUNITY LEVEL6. All Member States should call upon the Commission to work closely with them to:(a) exchange information on best practice concerning, for example, enforcement strategies, rehabilitation programmes, accident data collection;(b) support research and development, especially into the technological possibilities for stopping drink-drivers, and drivers being treated for alcohol problems, from driving;(c) support European wide publicity campaigns which encourage drivers not to drink and drive;(d) supply and coordinate the use of all alcohol related road accident data within the ambit of the CARE programme for monitoring the effectiveness of policy, and to provide a cross reference to the activities of the future programme of community action in the field of public health(6).Done at Brussels, 17 January 2001.For the CommissionLoyola De PalacioVice-President(1) Promoting road safety in the EU: The programme for 1997 to 2001 (COM(97) 131 final).(2) Priorities in EU road safety: Progress report and ranking of actions (COM(2000)125).(3) OJ C 337, 28.11.2000, p. 122.(4) OJ L 237, 24.8.1991, p. 1.(5) European Agreement concerning the international carriage of dangerous goods by road (ADR) and protocol of signature (Volume II): ECE/TRANS/130 Vol II.(6) See footnote 3.ANNEXThe following table indicates some of the reported success in reducing fatalities, accidents, or conviction rates, in those countries where BAC reductions have been introduced, usually with accompanying measures to reduce inappropriate drinking and driving. It also reports on estimated reductions from reductions in BAC limits.The results are summarised in the report of the working group on alcohol drugs and medicines for the high-level group: October 1999:>TABLE>>TABLE>


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31984K1946

Commission Recommendation No 1946/84/ECSC of 6 July 1984 to the Member States extending the period of application of Recommendation No 1835/81/ECSC on the obligation to publish price lists and conditions of sale and on prohibited practices in the steel trade

Official Journal L 180 , 07/07/1984 P. 0028 - 0028 Spanish special edition: Chapter 08 Volume 2 P. 0134  Portuguese special edition Chapter 08 Volume 2 P. 0134

*****COMMISSION  RECOMMENDATION No 1946/84/ECSC  of 6 July 1984  to the Member States extending the period of application of recommendation No 1835/81/ECSC on the obligation to publish price lists and conditions of sale and on prohibited practices in the steel trade  THE COMMISSION OF THE EUROPEAN  COMMUNITIES,  Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 63 (3) and the first and second paragraphs of Article 95 thereof,  The period of application of recommendation No 1835/81/ECSC (1), as amended by recommendation No 1518/82/ECSC (2), expires on 30 June 1984;  The Community steel market, on which distributive undertakings and dealers play an important role, is still affected by the state of manifest crisis persisting in the Community steel industry;  In order to combat the further sharp erosion of prices over the second half of 1983, the Commission had to extend its measures regarding output and capacity and reinforced them by introducing further restrictive measures;  The monitoring and production quota system set up under Article 58 has been extended, without substantial change, until 31 December 1985 by virtue of Decision No 234/84/ECSC (3);  Moreover, in Decisions No 3715/83/ECSC, No 3716/83/ECSC and No 3717/83/ECSC (4), which are warranted only while the production quota system remains in force, the Commission:  - fixed minimum prices for deliveries of certain steel products by steel undertakings, with effect from 1 January 1984,  - established a guarantee system and a system for the verification of the minimum prices for the abovementioned steel undertakings, and  - introduced a production certificate and an accompanying document for deliveries of certain products for steel undertakings and steel dealers;  All the Member States recognize that the production quota system set up under Article 58 until the end of 1985 and the abovementioned measures to reinforce it are essential to the restructuring process and to achieving the production cutback targets, fixed for the steel industry, which Member States are required to attain by the abovementioned date;  The situation on the steel market is not expected to deteriorate any further in 1984, though there is still a marked imbalance between supply and demand which warrants maintaining the obligations concerning steel dealers' business practices;  The rules laid down by recommendation No 1835/81/ECSC should be extended to apply until 31 December 1985 like the other main measures taken to combat the crisis;  After consulting the Consultative Committee and with the assent of the Council acting unanimously in respect of the prohibition on alignment,  HAS ADOPTED THIS RECOMMENDATION:  Article 1  In the first sentence of Article 1 of recommendation No 1835/81/ECSC '30 June 1984' is hereby replaced by '31 December 1985'.  The Member States shall inform the Commission of the measures taken not later than 1 October 1984.  Article 2  This recommendation shall be notified to the Member States and published in the Official Journal of the European Communities.  Done at Brussels, 6 July 1984.  For the Commission  Étienne DAVIGNON  Vice-President  (1) OJ No L 184, 4. 7. 1981, p. 9.  (2) OJ No L 169, 16. 6. 1982, p. 5.  (3) OJ No L 29, 1. 2. 1984, p. 1.  (4) OJ No L 373, 31. 12. 1983, pp. 1, 5 and 9.