78 European Semester 2015: Country Specific
Recommendations
| Committee's assessment
| Politically important |
| Committee's decision | Cleared from scrutiny
|
| Document details | (a) Commission Communication about the Country Specific Recommendations for the 2015 European Semester; (b) Draft Council Recommendation about broad economic guidelines for the Eurozone; (c) Draft Council Recommendation about Belgium's National Reform and Stability Programmes for 2015; (d) Draft Council Recommendation about Bulgaria's National Reform and Convergence Programmes for 2015; (e) Draft Council Recommendation about the Czech Republic's National Reform and Convergence Programmes for 2015; (f) Draft Council Recommendation about Denmark's National Reform and Convergence Programmes for 2015; (g) Draft Council Recommendation about Germany's National Reform and Stability Programmes for 2015;
(h) Draft Council Recommendation about Estonia's National Reform and Stability Programmes for 2015
(i) Draft Council Recommendation about Ireland's National Reform and Stability Programmes for 2015
(j) Draft Council Recommendation about Spain's National Reform and Stability Programmes for 2015
(k) Draft Council Recommendation about France's National Reform and Stability Programmes for 2015; (l) Draft Council Recommendation about Croatia's National Reform and Convergence Programmes for 2015; (m) Draft Council Recommendation about Italy's National Reform and Stability Programmes for 2015; (n) Draft Council Recommendation about Latvia's National Reform and Stability Programmes for 2015; (o) Draft Council Recommendation about Lithuania's National Reform and Stability Programmes for 2015; (p) Draft Council Recommendation about Luxembourg's National Reform and Stability Programmes for 2015; (q) Draft Council Recommendation about Hungary's National Reform and Convergence Programmes for 2015; (r) Draft Council Recommendation about Malta's National Reform and Stability Programmes for 2015; (s) Draft Council Recommendation about the Netherlands' National Reform and Stability Programmes for 2015; (t) Draft Council Recommendation about Austria's National Reform and Stability Programmes for 2015; (u) Draft Council Recommendation about Poland's National Reform and Convergence Programmes for 2015; (v) Draft Council Recommendation about Portugal's National Reform and Stability Programmes for 2015; (w) Draft Council Recommendation about Romania's National Reform and Convergence Programmes for 2015; (x) Draft Council Recommendation about Slovenia's National Reform and Stability Programmes for 2015; (y) Draft Council Recommendation about Slovakia's National Reform and Stability Programmes for 2015; (z) Draft Council Recommendation about Finland's National Reform and Stability Programmes for 2015; (aa) Draft Council Recommendation about Sweden's National Reform and Convergence Programmes for 2015
|
| Legal base | (a) —; (b)-(aa) Articles 121(2) and 148(4) TFEU; —; QMV
|
| Department
Document numbers
| HM Treasury
(a) (36843); 8886/15; COM(15) 250; (b) (36844); 8888/15; COM(15) 251; (c) (36845); 8890/15; COM(15) 252; (d) (36846); 8891/15; COM(15) 253;
(e) (36848); 8893/15; COM(15) 254; (f) (36849); 8894/15; COM(15) 255; (g) (36850); 8895/15; COM(15) 256; (h) (36851); 8896/15; COM(15) 257;
(i) (36852); 8898/15; COM(15) 258; (j) (36853); 8899/15; COM(15) 259; (k) (36854); 8900/15; COM(15) 260; (l) (36855); 8901/15; COM(15) 261;
(m) (36856); 8902/15; COM(15) 262; (n) (36857); 8903/15; COM(15) 263; (o) (36860); 8920/15; COM(15) 264; (p) (36861); 8923/15; COM(15) 265;
(q) (36862); 8924/15; COM(15) 266; (r) (36863); 8926/15; COM(15) 267; (s) (36864); 8927/15; COM(15) 268; (t) (36865); 8929/15; COM(15) 269;
(u) (36866); 8931/15; COM(15) 270; (v) (36867); 8932/15; COM(15) 271; (w) (36868); 8934/15; COM(15) 272; (x) (36869); 8936/15; COM(15) 273;
(y) (36870); 8938/15; COM(15) 274; (z) (36871); 8940/15; COM(15) 275; (aa) (36872); 8941/15; COM(15) 276
|
Summary and Committee's conclusions
78.1 The annual European Semester is an EU-level system for coordinating
and assessing Member States' structural reforms and fiscal/budgetary
policy and for monitoring and addressing macroeconomic imbalances.
On the previous Committee's recommendation the four documents
for the first stage of the 2015 European Semester, the Annual
Growth Survey, the draft Joint Employment Report, the EU Autumn
Forecast, an economic report, and the Alert Mechanism Report,
the first stage of the Macroeconomic Imbalance Procedure, were
debated in European Committee B on 4 March, prior to their consideration
by the European Council on 19-20 March.[ 510]
78.2 In March, as the second stage of the 2015 European
Semester, the Commission published its Communication about an
assessment of growth challenges, prevention and correction of
macroeconomic imbalances, and results of in-depth reviews of Member
State economies. It was accompanied by Commission Staff Working
Documents giving Country Reports for all Member States (including
the UK), apart from Greece. The Commission also published in March
a draft Council Recommendation on broad guidelines for economic
policies of Member States and the EU and a draft Council Decision
on guidelines for the employment policies of Member states and
the EU.
78.3 These, together with a package of recommended
Country Specific Recommendations reflecting the analysis in the
Country Reports and material submitted by Member States in their
National Reform Plans, which the Commission was expected to present
in May, were to be considered by the June European Council. The
previous Committee recommended that the Commission Communication
and the UK Country Report, together with, once available, the
Commission's draft 2015 Country Specific Recommendations and the
two documents concerning economic and employment guidelines be
debated in European Committee B. It suggested that these debates
should take place before the documents were considered at the
June European Council.[ 511]
78.4 The first of the present documents is a Commission
Communication about the 2015 Country Specific Recommendations.
The second concerns broad economic guidelines for the eurozone.
The remaining 25 documents are the draft Country Specific Recommendations
for all Member States, bar Cyprus, Greece and the UK.[ 512]
78.5 The Government comments favourably on the Commission
Communication concerning the 2015 Country Specific Recommendations.
As for the other documents the Government tells us that they have
no direct policy implications for the UK. But it adds that it
encourages all Member States to enact positive changes in the
light of the Country Specific Recommendations.
78.6 In normal circumstances we would recommend
the Commission Communication and the draft Council Recommendation
on broad economic guidelines for inclusion in a debate on a number
of documents to be considered in preparation for or at the European
Semester debate. However, consideration of all relevant documents
has now been completed by the Council and the European Council
and the 2015 European Semester process has itself been completed.
We think therefore that there is little purpose now in debating
these documents and accordingly clear them from scrutiny and rescind
the predecessor Committee's debate recommendations on the earlier
documents. Nevertheless, we note that we will wish to revert to
the normal pattern of debates on the documents for the 2016 European
Semester.
78.7 As for the draft Country Specific Recommendations
for the other Member States, whilst clearing them from scrutiny,
we draw them to the attention of the Treasury Committee for the
information they give about the economic developments the Commission
thinks necessary for them.
Full
details of the documents:
(a) Commission Communication: 2015 European Semester: Country-specific
recommendations: (36843), 8886/15, COM(15) 250; (b) Draft
Council Recommendation on the implementation of the broad guidelines
for the economic policies of the Member States whose currency
is the euro: (36844), 8888/15, COM(15) 251; (c) Draft Council
Recommendation on the 2015 National Reform Programme of Belgium
and delivering a Council opinion on the 2015 Stability Programme
of Belgium: (36845), 8890/15, COM(15) 252; (d) ) Draft Council
Recommendation on the 2015 National Reform Programme of Bulgaria
and delivering a Council opinion on the 2015 Convergence Programme
of Bulgaria: (36846), 8891/15, COM(15) 253; (e) Draft Council
Recommendation on the 2015 National Reform Programme of the Czech
Republic and delivering a Council opinion on the 2015 Convergence
Programme of the Czech Republic: (36848), 8893/15, COM(15) 254;
(f) Draft Council Recommendation on the 2015 National Reform Programme
of Denmark and delivering a Council opinion on the 2015 Convergence
Programme of Denmark: (36849), 8894/15, COM(15) 255; (g) Draft
Council Recommendation on the 2015 National Reform Programme of
Germany and delivering a Council opinion on the 2015 Stability
Programme of Germany: (36850), 8895/15, COM(15) 256; (h) Draft
Council Recommendation on the 2015 National Reform Programme of
Estonia and delivering a Council opinion on the 2015 Stability
Programme of Estonia: (36851), 8896/15, COM(15) 257; (i) Draft
Council Recommendation on the 2015 National Reform Programme of
Ireland and delivering a Council opinion on the 2015 Stability
Programme of Ireland: (36852), 8898/15, COM(15) 258; (j) Draft
Council Recommendation on the 2015 National Reform Programme of
Spain and delivering a Council opinion on the 2015 Stability Programme
of Spain: (36853), 8899/15, COM(15) 259; (k) Draft Council Recommendation
on the 2015 National Reform Programme of France and delivering
a Council opinion on the 2015 Stability Programme of France: (36854),
8900/15, COM(15) 260; (l) Draft Council Recommendation on the
2015 National Reform Programme of Croatia and delivering a Council
opinion on the 2015 Convergence Programme of Croatia: (36855),
8901/15, COM(15) 261; (m) Draft Council Recommendation on the
2015 National Reform Programme of Italy and delivering a Council
opinion on the 2015 Stability Programme of Italy: (36856), 8902/15,
COM(15) 262; (n) Draft Council Recommendation on the 2015 National
Reform Programme of Latvia and delivering a Council opinion on
the 2015 Stability Programme of Latvia: (36857), 8903/15, COM(15)
263; (o) Draft Council Recommendation on the 2015 National Reform
Programme of Lithuania and delivering a Council opinion on the
2015 Stability Programme of Lithuania: (36860), 8920/15, COM(15)
264; (p) Draft Council Recommendation on the 2015 National Reform
Programme of Luxembourg and delivering a Council opinion on the
2015 Stability Programme of Luxembourg: (36861), 8923/15, COM(15)
265; (q) Draft Council Recommendation on the 2015 National Reform
Programme of Hungary and delivering a Council opinion on the 2015
Convergence Programme of Hungary: (36862), 8924/15, COM(15) 266;
(r) Draft Council Recommendation on the 2015 National Reform Programme
of Malta and delivering a Council opinion on the 2015 Stability
Programme of Malta: (36863), 8926/15, COM(15) 267; (s) Draft Council
Recommendation on the 2015 National Reform Programme of the Netherlands
and delivering a Council opinion on the 2015 Stability Programme
of the Netherlands: (36864), 8927/15, COM(15) 268; (t) Draft Council
Recommendation on the 2015 National Reform Programme of Austria
and delivering a Council opinion on the 2015 Stability Programme
of Austria: (36865), 8929/15, COM(15) 269; (u) Draft Council Recommendation
on the 2015 National Reform Programme of Poland and delivering
a Council opinion on the 2015 Convergence Programme of Poland:
(36866), 8931/15, COM(15) 270; (v) Draft Council Recommendation
on the 2015 National Reform Programme of Portugal and delivering
a Council opinion on the 2015 Stability Programme of Portugal:
(36867), 8932/15, COM(15) 271; (w) Draft Council Recommendation
on the 2015 National Reform Programme of Romania and delivering
a Council opinion on the 2015 Convergence Programme of Romania:
(36868), 8934/15, COM(15) 272; (x) Draft Council Recommendation
on the 2015 National Reform Programme of Slovenia and delivering
a Council opinion on the 2015 Stability Programme of Slovenia:
(36869), 8936/1/15, COM(15) 273; (y) Draft Council Recommendation
on the 2015 National Reform Programme of Slovakia and delivering
a Council opinion on the 2015 Stability Programme of Slovakia:
(36870), 8938/15, COM(15) 274; (z) Draft Council Recommendation
on the 2015 National Reform Programme of Finland and delivering
a Council opinion on the 2015 Stability Programme of Finland:
(36871), 8940/15, COM(15) 275; (aa) Draft Council Recommendation
on the 2015 National Reform Programme of Sweden and delivering
a Council opinion on the 2015 Convergence Programme of Sweden:
(36872), 8941/15, COM(15) 276.
Background
78.8 The European Semester is an EU-level framework
for coordinating and assessing Member States' structural reforms
and fiscal/budgetary policy and for monitoring and addressing
macroeconomic imbalances. It attempts to exploit the synergies
between these policy areas by aligning their reporting cycles,
which ties together consideration of National Reform Programmes
(reports on progress and plans on structural reforms, under the
Europe 2020 Strategy) and Stability and Convergence Programmes
(reports on fiscal policy, under the Stability and Growth Pact).
78.9 The annual European Semester cycle begins with
an Annual Growth Survey (AGS) by the Commission, followed by a
series of overarching and country specific documents from the
Commission and culminating in examination of the overall and country-specific
situations by the European Council. The AGS is accompanied by
a draft Joint Employment Report which is based on employment and
social developments in the European Economic Forecast, commonly
referred to as the EU Autumn Forecast. An element of the European
Semester process is the Macroeconomic Imbalances Procedure (MIP).
The MIP is a mechanism designed to identify and, if necessary,
correct harmful macroeconomic imbalances across the EU, which
were a key cause of the current sovereign debt crisis. The first
stage of the MIP is publication by the Commission of an annual
Alert Mechanism Report (AMR).
78.10 On the previous Committee's recommendation
the four documents for the first stage of the 2015 European Semester,
the AGS, the draft Joint Employment Report, the EU Autumn Forecast
and the AMR, were debated in European Committee B on 4 March,
prior to their consideration by the European Council on 19-20
March.[ 513]
78.11 As the second stage of the 2015 European Semester
the Commission published its Communication about an assessment
of growth challenges, prevention and correction of macroeconomic
imbalances, and results of in-depth reviews. It was accompanied
by Commission Staff Working Documents giving Country Reports for
all Member States (including the UK) apart from Greece. These
reports contained an in-depth review of macroeconomic imbalances
(where applicable), and an assessment of Member State progress
in addressing their 2014 Country Specific Recommendations (CSRs),
approved by the June 2014 European Council. These documents, together
with a package of recommended CSRs reflecting the analysis in
the Country Reports and material submitted by Member States in
their National Reform Plans, which the Commission was expected
to present in May, were to be considered by the June European
Council.
78.12 The accompanying Commission Staff Working Document,
entitled Country Report United Kingdom 2015, comprised an assessment
of the general UK economic situation and its outlook, the in-depth
reviews of possible macroeconomic imbalances identified in the
AMR and a statement of the UK progress regarding the completion
of 2014 CSRs. The Commission's view was that the UK was experiencing
macroeconomic imbalances, which required policy action and monitoring
— this was the lowest of the five categories of imbalances
the Commission made use of in its Communication.
78.13 The Commission also published in March a draft
Council Recommendation on broad guidelines for economic policies
of Member States and the EU and a draft Council Decision on guidelines
for the employment policies of Member states and the EU.
78.14 The predecessor Committee recommended that
these four documents be debated in European Committee B together
with, once available, the Commission's draft 2015 CSRs. It suggested
that these debates should take place before the documents were
considered at the June European Council and urged the Government
to schedule the debates as soon as possible in this Parliament.
It added that in the debates Members might discuss the Commission's
overall and Member State specific assessments of economic, particularly
macroeconomic, issues.[ 514]
The documents
Commission Communication
78.15 In the introduction to its Communication about
the CSRs for the 2015 European Semester, document (a), the Commission:
· says
that growth is returning to the EU, with low oil prices and steady
global growth;
· observes
that these positive developments are short-term, and that greater
efforts are needed to overcome weaknesses; and
· notes
that 2015 CSRs focus on investment, ambitious structural reform,
striking a balance between short-term stabilisation and long term
sustainability and improving employment policy and social protection.
78.16 In the second section the Commission elaborates
on its new approach for the European Semester, saying that:
· changes
made include focussing on the priorities in the AGS, publishing
the Commission's country-specific and eurozone analysis three
months earlier and more intensive outreach with national authorities
and social partners;
· the
changes have been welcomed; and
· the
streamlining has continued in the CSRs, where fewer recommendations
have been made.
78.17 In the third section, about the focus of the
2015 Semester, the Commission:
· notes
that some progress was made overall on the 2014-15 CSRs, but that
there was limited progress in areas such as opening product and
services markets;
· says
macroeconomic imbalances are being corrected, but risks remain
high in some Member States;
· notes
that there is a time lag between the introduction of labour market
reforms and their full effect on job creation, which may help
explain why unemployment remains high;
· points
out that the EU and its Member States have recognised the need
to boost investment, and that as part of its work to strengthen
the links between investment, structural reforms and fiscal responsibility,
it has clarified the flexibility in the Stability and Growth Pact;
and
· says
that for Croatia and France it has analysed their reform commitments
and concluded there is no need to escalate the MIP.
78.18 The fourth section concerns the key objectives
of the 2015 CSRs. The Commission says that these are:
· removing
barriers to financing and supporting investment, with the UK specifically
noted to have made progress last year;
· improving
the business environment and productivity;
· adapting
public finances to make them more supportive of growth, with the
new deadline for the UK's Excessive Deficit Procedure being noted;[ 515]
and
· improving
employment policy and social protection.
78.19 The Commission also notes the reduction in
the number of recommendations, which means that some areas will
be monitored as part of other processes and in the Country Reports.
78.20 The Commission concludes by calling on the
Council to endorse the approach for the 2015 CSRs, and for Member
States to implement them strictly. It also says it is working
on the mid-term review of the Europe 2020 Strategy and intends
to present it by the end of this year.
Broad guidelines for economic policies of eurozone
Member States
78.21 The draft Council Recommendation on implementation
of the broad guidelines for the economic policies of eurozone
Member States, document (b), suggests:
· using
peer pressure to promote structural reforms that facilitate the
correction of large internal and external debts and support investment;
· regularly
assessing delivery of reforms in those Member States with serious
imbalances;
· continuing
regular assessment of structural reforms;
· taking
decisions, by spring 2016, on the follow-up to the coordination
exercise on reducing the high tax wedge on labour and on reforming
services markets;
· coordinating
fiscal policies to ensure that the aggregate eurozone fiscal stance
is in line with sustainability risks and cyclical conditions;
· holding,
by spring 2016, discussions on improvements in the quality and
sustainability of public finances, focussing in particular on
the prioritisation of investment at national and EU levels and
on making tax systems more growth friendly;
· monitoring
effective functioning of national fiscal frameworks;
· ensuring
timely finalisation of the follow up of the Comprehensive Assessment
by the European Central Bank, implementation of the Bank Recovery
and Resolution Directive, completion of ratification of the Intergovernmental
Agreement on the Single Resolution Fund and making the Fund fully
operational as from January 2016;
· promoting
measures to deepen market-based finance, to improve access to
finance for SMEs and to develop alternative sources of finance;
· encouraging
further reforms of national insolvency frameworks;
· taking
forward work on deepening Economic and Monetary Union; and
· contributing
to improvement of the economic surveillance framework in the context
of a planned report from the Presidents of the European Council,
the European Parliament, the Commission, the European Central
Bank, and the Eurogroup.
Council Recommendations and Opinions for Member
States other than the UK
78.22 In May the Commission published CSRs for Member
States, containing draft Council Recommendations and Opinions.
We report on the UK CSR in a separate chapter in this report.[ 516]
78.23 In the CSR for Belgium, document (c), the draft
Council Recommendation and Opinion suggest:
· achieving
a fiscal adjustment of at least 0.6% of GDP towards the medium-term
objective in 2015 and in 2016;
· using
windfall gains to put the general government debt ratio on an
appropriate downward path;
· complementing
the pension reform by linking the statutory retirement age to
life expectancy;
· agreeing
on an enforceable distribution of fiscal targets among all government
levels;
· adopting
and implementing a comprehensive tax reform broadening the tax
base;
· improving
functioning of the labour market by reducing financial disincentives
to work; and
· restoring
competitiveness by ensuring that wages evolve in line with productivity.
78.24 In the CSR for Bulgaria, document (d), the
draft Council Recommendation and Opinion suggest:
· avoiding
a structural deterioration in public finances in 2015 and achieving
an adjustment of 0.5% of GDP in 2016;
· taking
measures to improve tax collection and addressing the shadow economy;
· improve
cost-effectiveness of the health care system;
· completing,
by December 2015, a system-wide independent asset-quality review
and a bottom-up stress test of the banking sector;
· performing
a portfolio screening for the pension fund and insurance sectors;
· reviewing
and fortifying banking and non-banking financial sector supervision;
· improving
corporate governance in financial intermediaries;
· developing
an integrated approach for groups at the margin of the labour
market, in particular older workers and young people not in employment,
education or training;
· establishing
a transparent mechanism for setting the minimum wage and minimum
social security contributions;
· adopting
reform of the School Education Act, and increasing participation
in education of disadvantaged children, by improving access to
good-quality early schooling; and
· with
a view to improving the investment climate, preparing a comprehensive
reform of the insolvency framework drawing on international best
practice.
78.25 In the CSR for the Czech Republic, document
(e), the draft Council Recommendation and Opinion suggest:
· achieving
a fiscal adjustment of 0.5% of GDP in 2016;
· improving
the cost-effectiveness and governance of the healthcare sector;
· fighting
tax evasion, simplifying the tax system and implementing the anti-corruption
plan;
· increasing
transparency and efficiency of public procurement;
· reducing
the high level of taxation levied on low-income earners, by shifting
taxation to other areas;
· improving
availability of affordable childcare;
· adopting
higher education reform and ensuring adequate training for teachers;
and
· supporting
poorly performing schools and taking measures to increase participation
among disadvantaged children.
78.26 In the CSR for Denmark, document (f), the draft
Council Recommendation and Opinion suggest:
· avoiding
deviating from the medium-term objective in 2016;
· enhancing
productivity, in particular in the services sectors oriented towards
the domestic market;
· easing
restrictions on retail establishments; and
· taking
measures to remove remaining barriers posed by authorisation and
certification schemes in the construction sector.
78.27 In the CSR for Germany, document (g), the draft
Council Recommendation and Opinion suggest:
· increasing
public investment in infrastructure, education and research, including
by using the available fiscal space;
· fostering
private investment by improving the efficiency of the tax system;
· using
the ongoing review to improve the design of fiscal relations between
the federation, Länder and municipalities, particularly
with a view to ensuring adequate public investment at all levels
of government;
· increasing
incentives for later retirement;
· taking
measures to reduce high labour taxes and social security contributions
and to address the impact of fiscal drag;
· revising
the fiscal treatment of mini-jobs to facilitate the transition
to other forms of employment;
· taking
measures to stimulate competition in the services sector; and
· removing
the remaining barriers to competition in the railway markets.
78.28 In the CSR for Estonia, document (h), the draft
Council Recommendation and Opinion suggest:
· avoiding
deviating from the fiscal medium-term objective in 2015 and 2016;
· improving
labour market participation;
· improving
incentives to work through measures targeting low-income earners;
· taking
action to narrow the gender pay gap;
· ensuring
high-quality social and childcare services at local level;
· increasing
participation in vocational education and training, and its labour
market relevance, in particular by improving the availability
of apprenticeships; and
· focusing
public support for research and innovation on a limited number
of smart specialisation areas.
78.29 In the CSR for Ireland, document (i), the draft
Council Recommendation and Opinion suggest:
· ensuring
a correction of the excessive deficit in 2015;
· achieving
a fiscal adjustment of 0.6% of GDP towards the medium-term objective
in 2016;
· using
windfall gains from better-than-expected economic and financial
conditions to accelerate deficit and debt reduction;
· limiting
discretionary powers to change expenditure ceilings beyond predefined
contingencies;
· broadening
the tax base and reviewing tax expenditures;
· increasing
cost-effectiveness of the healthcare system;
· rolling
out activity-based funding throughout the health system;
· increasing
the work-intensity of households and addressing the poverty risk
of children by tapering the withdrawal of benefits and supplementary
payments upon return to employment and through better access to
affordable full-time childcare;
· finalising
restructuring solutions for a vast majority of mortgages in arrears
by end-2015 and strengthening the monitoring arrangements by the
Central Bank of Ireland;
· ensuring
that restructuring solutions for loans to distressed SMEs and
residual commercial real-estate loans are sustainable; and
· ensuring
that a central credit registry is operational by 2016.
78.30 In the CSR for Spain, document (j), the draft
Council Recommendation and Opinion suggest:
· ensuring
correction of the excessive deficit by 2016 by taking the necessary
structural measures in 2015 and 2016 and using windfall gains
to accelerate the deficit and debt reduction;
· strengthening
transparency and accountability of regional public finances;
· improving
cost-effectiveness of the healthcare sector;
· completing
reform of the saving banks' sector and completing restructuring
and privatisation of state owned savings banks;
· promoting
alignment of wages and productivity, taking into account differences
in skills and local labour market conditions as well as divergences
in economic performance across regions, sectors and companies;
· taking
steps to increase the quality and effectiveness of job search
assistance and counselling to tackle youth unemployment;
· streamlining
minimum income and family support schemes and fostering regional
mobility;
· removing
the barriers preventing businesses from growing, including size-contingent
regulations;
· adopting
the planned reform on professional services; and
· accelerating
implementation of the law on market unity.
78.31 In the CSR for France, document (k), the draft
Council Recommendation and Opinion suggest:
· ensuring
action under the excessive deficit procedure and a correction
of the excessive deficit by 2017 by reinforcing the budgetary
strategy;
· taking
measures for all years and using all windfall gains for deficit
reduction;
· specifying
the expenditure cuts planned for these years and providing an
independent evaluation of the impact of key measures;
· making
the spending review effective and identifying savings opportunities
across government;
· limiting
the rise in local authorities' administrative expenditure;
· taking
measures by March 2016 to bring the pension system into balance;
· ensuring
that the labour cost reductions stemming from the tax credit for
competitiveness and employment and from the responsibility and
solidarity pact are sustained;
· evaluating
the effectiveness of these schemes in the light of labour and
product market rigidities;
· reforming
wage-setting to ensure that wages evolve in line with productivity;
· ensuring
that minimum wage developments are consistent with the objectives
of promoting employment and competitiveness;
· reducing,
by the end of 2015, regulatory impediments to companies' growth;
· removing
restrictions on access to and the exercise of regulated professions;
· simplifying
and improving the efficiency of the tax system;
· taking
action to reduce the taxes on production and the corporate income
statutory rate, while broadening the tax base on consumption;
· taking
measures as from 2015 to abolish inefficient taxes that are yielding
little or no revenue;
· reforming
labour law to provide more incentives for employers to hire on
open-ended contracts;
· facilitating
take up of derogations at company and branch level from general
legal provisions;
· reforming
the law creating the accords de maintien de l'emploi by
the end of 2015 in order to increase their take-up by companies;
and
· taking
action to reform the unemployment benefit system in order to bring
the system back to budgetary sustainability and to provide more
incentives to return to work.
78.32 In the CSR for Croatia, document (l), the draft
Council Recommendation and Opinion suggest:
· ensuring
a correction of the excessive deficit by 2016 by taking measures
in 2015 and reinforcing the budgetary strategy for 2016;
· publishing
and implementing the findings of the expenditure review;
· improving
control over expenditure at central and local level, in particular
by establishing a sanctioning mechanism for entities breaching
budgetary limits;
· adopting
the Fiscal Responsibility Act and strengthening the capacity and
role of the State Audit Office;
· introducing
a recurrent property tax and improving VAT compliance;
· reinforcing
public debt management;
· discouraging
early retirement by raising penalties for early exits;
· improving
efficiency of pension spending;
· tackling
fiscal risks in healthcare;
· tackling
weaknesses in the wage-setting;
· fostering
alignment of wages with productivity and macroeconomic conditions;
· strengthening
incentives for the unemployed and inactive to take up paid employment;
· carrying
out the reform of the social security system, based on the 2014
review, and further consolidating social benefits by improving
targeting and eliminating overlaps;
· reducing
the extent of fragmentation and overlap between levels of central
and local government;
· increasing
transparency and accountability in the public corporate sector;
· advancing
the listing of minority packages of shares of public companies
and privatisations;
· reducing
parafiscal charges and removing excessive barriers for service
providers;
· improving
the efficiency and quality of the justice system;
· reinforcing
the pre-insolvency and insolvency frameworks for businesses in
order to facilitate debt restructuring and putting in place a
personal insolvency procedure; and
· strengthening
the capacity of the financial sector to support the recovery.
78.33 In the CSR for Italy, document (m), the draft
Council Recommendation and Opinion suggest:
· achieving
a fiscal adjustment of at least 0.25% of GDP towards the medium-term
objective in 2015 and of 0.1% of GDP in 2016 by taking the necessary
structural measures in both 2015 and 2016, taking into account
the allowed deviation for the implementation of major structural
reforms;
· implementing
the privatisation programme and using windfall gains to make further
progress towards putting the general government debt ratio on
a downward path;
· implementing
the enabling law for tax reform by September 2015;
· adopting
the planned national strategic plan for ports and logistics;
· ensuring
that the management of EU funds improves;
· adopting
and implementing laws modernising the public administration;
· revising
the statute of limitations by mid-2015;
· ensuring
that the reforms adopted to improve the efficiency of civil justice
help reduce the length of proceedings;
· tackling,
by the end of 2015, remaining weaknesses in the corporate governance
of banks and taking measures to accelerate the reduction of non-performing
loans;
· strengthening
active labour market policies;
· establishing
an effective framework for wage bargaining;
· as part
of efforts to tackle youth unemployment, adopting and implementing
planned school reform and expanding vocationally-oriented tertiary
education;
· implementing
the simplification agenda for 2015-17 to ease the administrative
and regulatory burden;
· adopting
competition-enhancing measures in all the sectors covered by the
competition law, and taking decisive action to remove remaining
barriers; and
· ensuring
that local public services contracts not complying with the requirements
on in-house awards are rectified by end-2015.
78.34 In the CSR for Latvia, document (n), the draft
Council Recommendation and Opinion suggest:
· ensuring
that the deviation from the medium-term objective in 2015 and
2016 is limited to the allowance linked to the systemic pension
reform;
· improving
vocational education and training;
· speeding
up the curricula reform and increasing the offer of apprenticeships;
· ensuring
that the new financing model of the higher education system rewards
quality;
· better
targeting of research financing and incentivising private investment
in innovation;
· reforming
social assistance and increasing employability;
· reducing
the high tax wedge for low-income earners by shifting tax burden
to other sources less detrimental to growth;
· improving
accessibility, cost-effectiveness and quality of the healthcare
system and linking hospital financing to performance mechanisms;
· improving
efficiency of the judicial system by providing adequate means
to fight tax evasion and by strengthening the role of the Judicial
Council; and
· improving
public service legislation to strengthen the conflict of interest
regime and link remuneration to responsibilities.
78.35 In the CSR for Lithuania, document (o), the
draft Council Recommendation and Opinion suggest:
· avoiding
deviation from the medium-term objective in 2015 and ensuring
that the deviation in 2016 is limited to the allowance linked
to the systemic pension reform;
· broadening
the tax base and improving tax compliance;
· addressing
the challenge of a shrinking working-age population by improving
the labour-market relevance of education, increasing attainment
in basic skills, and improving the performance of the healthcare
system;
· reducing
the high tax wedge for low income earners;
· adopting
a comprehensive reform of the pension system that also addresses
the challenge of pension adequacy;
· improving
the coverage and adequacy of unemployment benefits and cash social
assistance; and
· improving
the employability of those looking for work.
78.36 In the CSR for Luxembourg, document (p), the
draft Council Recommendation and Opinion suggest:
· broadening
the tax base, in particular on consumption, recurrent property
taxation and environmental taxation;
· closing
the gap between the statutory and effective retirement age; and
· reforming
the wage-setting system with a view to ensuring that wages evolve
in line with productivity.
78.37 In the CSR for Hungary, document (q), the draft
Council Recommendation and Opinion suggest:
· achieving
a fiscal adjustment of 0.5% of GDP towards the medium-term objective
in 2015 and of 0.6% of GDP in 2016;
· restoring
normal lending to the real economy and removing obstacles to market-based
portfolio cleaning;
· reducing
liability risks linked to increased state ownership in the banking
sector;
· reducing
distortive sector-specific taxes;
· removing
entry barriers in the service sector;
· reducing
the tax wedge for low-income earners, including by shifting taxation
to areas less distortive to growth;
· continuing
to fight tax evasion;
· reducing
compliance costs and improving efficiency of tax collection;
· strengthening
structures in public procurement that promote competition and
transparency and improving the anti-corruption framework;
· reorienting
the budget resources to active labour market measures to foster
integration into the primary labour market;
· improving
the coverage of social assistance and unemployment benefits;
· increasing
participation of disadvantaged groups in education and improving
the support offered to these groups through targeted teacher training;
· strengthening
measures to facilitate the transition between different stages
of education and to the labour market; and
· improving
the teaching of essential competences.
78.38 In the CSR for Malta, document (r), the draft
Council Recommendation and Opinion suggest:
· following
correction of the excessive deficit, achieving a fiscal adjustment
of 0.6% of GDP towards the medium-term objective in 2015 and 2016;
· improving
basic skills and reducing early school-leaving by promoting the
continuous professional development of teachers;
· increasing
the statutory retirement age and linking it to life expectancy;
and
· improving
small and micro-enterprises' access to finance.
78.39 In the CSR for the Netherlands, document (s),
the draft Council Recommendation and Opinion suggest:
· shifting
public expenditure towards supporting investment in Research and
Development (R&D) and work on improving private R&D expenditure;
· decreasing
mortgage interest tax deductibility so that tax incentives to
invest in unproductive assets are reduced;
· providing
for a more market-oriented pricing mechanism in the rental market
and further relating rents to household income in the social housing
sector; and
· reducing
the level of contributions to the second pillar of the pension
system for those in the early years of working life.
78.40 In the CSR for Austria, document (t), the draft
Council Recommendation and Opinion suggest:
· avoiding
deviation from the medium-term objective in 2015 and 2016;
· ensuring
budget neutrality of the tax reform aimed at reducing the tax
burden on labour;
· correcting
misalignment between the financing and spending responsibilities
of the different levels of government;
· taking
measures to ensure the long-term sustainability of the pension
system;
· strengthening
measures to increase the labour market participation of older
workers and women;
· taking
steps to improve the educational achievement of disadvantaged
young people;
· removing
disproportionate barriers for service providers and impediments
to setting up interdisciplinary companies; and
· addressing
the potential vulnerabilities of the financial sector in terms
of foreign exposure and insufficient asset quality.
78.41 In the CSR for Poland, document (u), the draft
Council Recommendation and Opinion suggest:
· following
correction of the excessive deficit, achieving a fiscal adjustment
of 0.5% of GDP towards the medium-term objective both in 2015
and 2016;
· establishing
an independent fiscal council;
· limiting
use of reduced VAT rates;
· starting
the process of aligning pension arrangements for farmers and miners
with those for other workers, and adopting a timetable for progressive
full alignment;
· putting
in place a system for assessing and recording farmers' incomes;
· taking
measures to reduce the excessive use of temporary and civil law
contracts in the labour market; and
· removing
obstacles to investment in railway projects.
78.42 In the CSR for Portugal, document (v), the
draft Council Recommendation and Opinion suggest:
· ensuring
a correction of the excessive deficit in 2015;
· achieving
a fiscal adjustment of 0.6% of GDP towards the medium-term objective
in 2016;
· enforcing
laws to better control expenditure;
· improving
medium-term sustainability of the pension system;
· safeguarding
financial sustainability of state-owned enterprises;
· further
improving tax compliance and efficiency of the tax administration;
· promoting
alignment of wages and productivity, taking into account differences
in skills and local labour market conditions as well as divergences
in economic performance across regions, sectors and companies;
· ensuring
that developments relating to the minimum wage are consistent
with the objectives of promoting employment and competitiveness;
· improving
efficiency of public employment services; and
· ensuring
effective activation of benefit recipients and adequate coverage
of the minimum income scheme.
78.43 In the CSR for Romania, document (w), the draft
Council Recommendation and Opinion suggest:
· taking
all necessary measures to complete the financial assistance programme;
· limiting
deviation from the fiscal medium-term objective in 2015 to a maximum
of 0.25% of GDP, as specified under the 2013-15 balance-of-payments
programme, and returning to the medium-term objective in 2016;
· implementing
the comprehensive tax compliance strategy;
· tackling
undeclared work, and pushing ahead with the equalisation of the
pensionable age for men and women;
· strengthening
provision of labour market measures;
· ensuring
that the national employment agency is adequately staffed;
· establishing
clear guidelines for setting the minimum wage transparently;
· introducing
the minimum insertion income;
· increasing
provision and quality of early childhood education and care;
· reducing
early school leaving;
· pursuing
the national health strategy 2014-20 to remedy issues of poor
accessibility, low funding and inefficient resources; and
· adopting
the law on reforming corporate governance of state-owned enterprises.
78.44 In the CSR for Slovenia, document (x), the
draft Council Recommendation and Opinion suggest:
· ensuring
a durable correction of the excessive deficit in 2015, and achieving
a fiscal adjustment of 0.6% of GDP towards the medium-term objective
in 2016;
· adopting
the Fiscal Rule Act and revising the Public Finance Act;
· advancing
long-term reform of the pension system;
· adopting,
by the end of 2015, a healthcare and long-term care reform;
· reviewing
the mechanism for setting the minimum wage;
· increasing
employability of low skilled and older workers;
· addressing
long-term unemployment and providing adequate incentives to extend
working lives;
· bringing
down the level of non-performing loans;
· improving
credit risk monitoring capacity in banks;
· continuing
corporate restructuring and maintaining strong corporate governance
in the Bank Asset Management Company;
· taking
measures to improve access to finance for SMEs and micro companies;
· adopting
a strategy for the Slovenian Sovereign Holding with a clear classification
of assets, implementing an annual asset management plan and applying
performance criteria; and
· improving
the efficiency of civil justice to reduce the length of proceedings.
78.45 In the CSR for Slovakia, document (y), the
draft Council Recommendation and Opinion suggest:
· improving
cost-effectiveness of the healthcare sector;
· increasing
tax collection;
· addressing
long term unemployment by introducing activation measures, second
chance education and high-quality training tailored to individuals'
needs;
· improving
incentives for women to remain in or return to employment, by
improving the provision of childcare facilities;
· improving
teacher training and the attractiveness of teaching as a profession
to stem the decline in educational outcomes;
· increasing
participation of Roma children in mainstream education and in
high-quality early childhood education;
· to boost
investment in infrastructure, improving and streamlining administrative
procedures for obtaining land-use and construction permits; and
· increasing
competition in public tenders and improve supervisory mechanisms
in public procurement.
78.46 In the CSR for Finland, document (z), the draft
Council Recommendation and Opinion suggest:
· ensuring
that the excessive deficit is brought below 3% of GDP by 2017;
· continuing
efforts to reduce the fiscal sustainability gap and strengthening
conditions for growth;
· adopting
the agreed pension reform and gradually eliminating early exit
pathways;
· ensuring
effective design and implementation of administrative reforms
concerning municipal structure and social and healthcare services;
· pursuing
efforts to improve the employability of young people, older workers
and the long-term unemployed;
· ensuring
that wages evolve in line with productivity; and
· taking
measures to open the retail sector to effective competition.
78.47 In the CSR for Sweden, document (aa), the draft
Council Recommendation and Opinion suggest:
· addressing
the rise in household debt by adjusting fiscal incentives; and
· to alleviate
the structural under-supply of housing, fostering competition
in the construction sector, streamlining the planning and appeals
procedures for construction and revising the rent-setting system
to allow more market-oriented rent levels.
The Government's view
78.48 In his Explanatory Memorandum of 3 June 2015
about the Commission's overarching Communication, document (a),[ 517]
the Financial Secretary to the Treasury (Mr David Gauke), says
that:
· the
Government notes the Communication;
· it welcomes
the changes made by the Commission to the 2015 European Semester,
which are in line with the suggestions made by the UK in its response
to the consultation on the Europe 2020 Strategy mid-term review;
and
· it welcomes
in particular the Commission making fewer CSRs, which are more
narrowly focussed on the key issues of jobs and growth.
78.49 In his Explanatory Memorandum of 27 May 2015
about the draft Council Recommendations and Opinions, documents
(b)-(aa) the Minister says that they have no direct policy implications
for the UK. He adds that:
· renewed
focus on structural reforms —
at the EU, eurozone and Member State level —
is needed to help embed recovery and address the EU's important
medium term growth issues;
· the
Government therefore encourages all Member States to enact positive
changes in light of the CSRs.
78.50 The Minister also notes, in connection with
the UK's CSR,[ 518]
that Member States which received Recommendations and Opinions
in similar areas to the UK are:
· public
finances —
Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Estonia,
Spain, Finland, France, Croatia, Hungary, Ireland, Italy, Lithuania,
Latvia, Malta, Poland, Portugal, Romania and Slovenia;
· housing
and private debt — Hungary, Ireland, the Netherlands, Portugal
and Sweden;
· labour
market — Austria, Belgium, Germany, Denmark, Estonia, Spain,
Finland, France, Croatia, Hungary, Ireland, Italy, Lithuania,
Latvia, Poland, Portugal, Romania, Slovakia and Slovenia; and
· education
and skills — Austria, Belgium, the Czech Republic, Germany,
Estonia, Hungary, Italy, Lithuania, Latvia, Malta, Romania and
Slovakia.
Previous Committee Reports
None.
510 (36530), 15953/14 + ADD 1, (36542), 15985/14, (36543),
15988/14 + ADD 1, (36560): Twenty-seventh Report HC 219-xxvi (2014-15),
chapter 2 (17 December 2014), Twenty-eighth Report HC 219-xxvii
(2014-15), chapter 3 (7 January 2015) and Gen Co Debs, European
Committee B, 4 March 2015, cols. 3-30. Back
511 (36690), 6632/15; (36691), -, SWD(15) 47: see Thirty-sixth Report
HC 219-xxxv (2014-15), chapter 2 (11 March 2015); (36712) 6813/15
+ ADD 1: see Thirty-seventh Report HC 219-xxxvi (2014-15), chapter
2 (18 March 20150; (36703) 6144/15 + ADD 1: see Thirty-ninth Report
HC 219-xxxvii (2014-15), chapter 2 (24 March 2015). Back
512 (36873) 8943/15 is the draft Country Specific Recommendation for
the UK: see chapter 79 of this Report. Back
513 Op cit. Back
514 Op cit. Back
515 (36859), 8905/15: see chapter 79 of this report. Back
516 Op cit. Back
517 This Explanatory Memorandum also concerns other documents specific
to the UK: see chapter 79 of this report. Back
518 Op cit. Back
| 
