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I Information

Council

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COUNCIL OPINION

of 14 March 2006

on the updated stability programme of Greece, 2005-2008

(2006/C 82/01)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In the view of the above assessment, the Council welcomes the efforts undertaken so far and the priority given by the government to a permanent reduction of the deficit. The Council notes that, overall, the programme is consistent with the correction of the excessive deficit by 2006, subject to a full implementation of the envisaged adjustment and conditional on the effects on the planned deficits of possible further statistical revisions of budgetary data. In the light of the recommendations made by the Council under Article 104(9) of 17 February 2005, the Council invites Greece to:

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  This figure does not include 0,3 % of GDP (EUR 512 million) corresponding to the reimbursement of European Regional Development funds. However, being a genuine one-off expenditure, its consideration would not have any impact on the fiscal effort in 2005, neither on the 2006-2008 adjustment path.

(3)  The programme has a gap in the compulsory data (Exchange rates are presented in terms of EUR/USD instead of nominal effective exchange rates) and does not provide all optional data prescribed by the new code of conduct.

(4)  Details on long-term sustainability are provided in the technical assessment of the programme by the Commission services

(http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm).

(5)  Commission services calculations on the basis of the information in the programme

(6)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures

(7)  One-off and other temporary measures taken from the programme (0.6% of GDP in 2006)

(8)  One-off and other temporary measures taken from the Commission services' autumn 2005 forecast (0.8% of GDP in 2005)

(9)  Based on estimated potential growth of 3.2%, 3.5%, 3.4% and 3.2% respectively in the period 2004-2007.

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations

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----

COUNCIL OPINION

of 14 March 2006

on the updated stability programme of Germany, 2005-2009

(2006/C 82/02)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council welcomes the priority attributed by the government to budgetary consolidation as laid out in the programme, but notes that there are risks linked to the achievement of the budgetary targets and to long-term sustainability of public finances. Also in the light of the Council decision of 14 March in accordance with Article 104(9) of the Treaty, the Council invites Germany to:

Comparison of key macroeconomic and budgetary projections

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(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  As in previous years, the update contains only rounded data and sometimes period averages for the outer years of the programme period. It has gaps in the compulsory data and does not provide all optional data prescribed by the new code of conduct (especially data on unemployment, sectoral balances and a breakdown of tax revenues are missing).

(3)  Details on long-term sustainability are provided in the technical assessment of the programme by the Commission services

(http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm).

(4)  Commission services calculations on the basis of the information in the programme.

(5)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures.

(6)  One-off and other temporary measures taken from the programme (0.1% of GDP in 2005).

(7)  One-off and other temporary measures taken from the Commission services' autumn 2005 forecast.

(8)  Based on estimated potential growth of 1.1%, 1.1%, 1.1% and 1.2% respectively in the period 2004-2007.

(9)  According to first estimates, growth was 0.9% in 2005. The Commission services' interim forecast of 21 February 2006 projects growth at 1.5% in 2006.

(10)  The ratio was calculated using the GDP series with the old method of accounting for FISIM (financial services indirectly measured), so data are not directly comparable.

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM) on the basis of unchanged policies before the new government took office in November 2005; Commission services' calculations.

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COUNCIL OPINION

of 14 March 2006

on the updated stability programme of Spain, 2005-2008

(2006/C 82/03)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council notes that, overall, the budgetary position is sound and the budgetary strategy provides a good example of fiscal policies conducted in compliance with the Pact. Maintaining a strong budgetary position is important in the light of rising external imbalances. The Council invites Spain to implement the envisaged measures to address the long-term budgetary implications of ageing populations.

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The programme has gaps in the compulsory data (interest rates, collective consumption and total social transfers projections) and does not provide all optional data prescribed by the new code of conduct.

(3)  Commission services' calculations on the basis of the information in the programme.

(4)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures.

(5)  One-off and other temporary measures taken from the programme (assumption of the national railway company RENFE debt, 0.7% of GDP, and public television RTVE, 0.1% of GDP, in year 2004).

(6)  According to first estimates, growth was 3.4% in 2005. The Commission services' interim forecast of 21 February 2006 projects growth of 3.1% in 2006.

(7)  Private consumption deflator.

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations.

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----

COUNCIL OPINION

of 14 March 2006

on the updated stability programme of France, 2005-2009

(2006/C 82/04)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council welcomes the priority given to debt reduction in the French stability programme but notes that there are risks linked to the achievement of the budgetary targets and to long-term sustainability of public finances. Also in the light of the Commission's communication of December 2004 endorsed by the Council in January 2005, the Council invites France to:

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The programme has gaps in the compulsory data, and optional data prescribed by the new code of conduct are missing. Missing compulsory data mainly concern short and long-term interest rate assumptions. Missing optional data mainly concern the general government expenditure by function and data on long-term sustainability of public finance as well as labour market developments.

(3)  Report from an independent committee appointed by the French government to analyse the public debt and to determine debt-reduction possibilities, published in mid-December 2005.

(4)  For further calculations, the corresponding point estimate has been used.

(5)  Commission services' calculations on the basis of the information in the programme.

(6)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures.

(7)  One-off and other temporary measures as calculated by the Commission services (0.6% of GDP in 2005 (the apparent smaller difference between the structural and the cyclically-adjusted is due to rounding effect), 0.2% of GDP in 2006; all deficit-reducing).

(8)  One-off and other temporary measures taken from the Commission services' autumn 2005 forecast (0.5% of GDP in 2005 and 0.2% in 2006; all deficit-reducing).

(9)  Based on estimated potential growth of 2.3% in 2004, 1.9% in 2005, 2.2% in 2006 and 2.4% for the period 2007-2009.

(10)  CPI change instead of HICP.

(11)  According to first estimates, growth was 1.4% in 2005. The Commission services' interim forecast of 21 February 2006 projects growth of 1.9% in 2006.

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations.

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COUNCIL OPINION

of 14 March 2006

on the updated stability programme of Ireland, 2005-2008

(2006/C 82/05)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

The Council is of the opinion that, overall, the budgetary position is sound and the budgetary strategy provides a good example of fiscal policies in compliance with the Stability and Growth Pact. The Council invites Ireland to continue to implement measures to address the long-term budgetary implications of an ageing population.

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The programme provides all compulsory data prescribed by the new code of conduct but some of the optional data are missing.

(3)  Commission services' calculations on the basis of the information in the programme.

(4)  Commission services' autumn 2005 forecast pre-dates the December 2005 Budget on which the updated stability programme is based.

(5)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures.

(6)  One-off and other temporary measures taken from the programme (0.3% of GDP in 2005; surplus decreasing). An estimate of one-offs for 2004 and 2006 provided by the Irish Department of Finance: 0.7% of GDP in 2004 and 0.1% of GDP in 2006 respectively (both surplus increasing).

(7)  One-off and other temporary measures taken from the Commission services' autumn 2005 forecast (0.4% of GDP in 2005; surplus decreasing).

(8)  Based on estimated potential growth of 5.8%, 6.1%, 5.5% and 5.3% respectively in the period 2004-2007.

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations.

----

----

COUNCIL OPINION

of 14 March 2006

on the updated stability programme of Italy, 2005-2009

(2006/C 82/06)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the programme can be considered as consistent with a correction of the excessive deficit by 2007, subject to a full and effective implementation of the 2006 budget and the specification and adoption of further substantial measures for 2007. In the light of the recommendations made by the Council under Article 104(7) of the Treaty on 28 July 2005, and in order to strengthen the sustainability of public finances, the Council invites Italy to:

Comparison of key macroeconomic and budgetary projections (6)

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The budgetary impact of one-off measures amounted to 0,6 % of GDP in 2001, 1,9 % in 2003 and 1,4 % in 2004. In 2002, the deficit was at 2,7 % of GDP, with 1,3 % of GDP of one-offs.

(3)  In particular, the optional chapter on ‘institutional features of public finance’ is missing, and the programme also has gaps in the compulsory data and does not provide all optional data prescribed by the new code of conduct (especially, there is no breakdown of the budget consistent with the deficit targets for the years 2007-2009).

(4)  An amnesty on unpaid social contributions of the agricultural sector currently debated in the Italian Parliament, if eventually approved and subject to statistical verification, might produce a limited upward revision for the deficit and/or the debt ratio.

(5)  Details on long-term sustainability are provided in the technical assessment of the programme by the Commission services

(http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm).

(6)  The Commission services' autumn 2005 forecast was based on information available up to the cut-off date of 7 November 2005. Therefore, it was based on a draft version of the 2006 budget.

(7)  Commission services calculations on the basis of the information in the programme.

(8)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures.

(9)  One-off and other temporary measures as calculated by the Commission services (1.4% of GDP in 2004, 0.6% in 2005 and 0.3% of GDP in 2006; deficit-reducing).

(10)  One-off and other temporary measures taken from the Commission services' autumn 2005 forecast (1.4% of GDP in 2004, 0.5% in 2005, and 0.4% in 2006; all deficit-reducing).

(11)  The Commission services' interim forecast of 21 February 2006 projects growth of 1.3% in 2006.

(12)  Based on estimated potential growth of 1.4%, 1.2%, 1.2% and 1.3% respectively in the period 2004-2007.

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations.

----

----

COUNCIL OPINION

of 14 March 2006

on the updated stability programme of the Netherlands, 2005-2008

(2006/C 82/07)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council welcomes the efforts of the Dutch Government in 2005 to bring the deficit further below the 3 % of GDP reference value, after the prompt correction of the excessive deficit, as well as the fact that the authorities plan to respect the medium-term objective throughout the programme period. The Council invites the Netherlands, also in view of better-than-expected results in 2005 to maintain a strong budgetary position in 2006 and thereafter.

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  Some chapters are missing (overall policy framework) or are incomplete (quality of public finances, structural reforms). Compulsory data regarding the basic assumptions were missing in the programme, but were subsequently supplied by the Dutch authorities. An important part of optional data prescribed by the new code of conduct is missing.

(3)  For further calculations, the corresponding point estimates have been used.

(4)  Commission services calculations on the basis of the information in the programme.

(5)  As there are no one-off and other temporary measures in the programme, the cyclically-adjusted balance and the structural balance are identical.

(6)  Based on estimated potential growth of 1.5%, 1.6%, 1.7% and 1.8% respectively in the period 2004-2007.

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations.

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----

COUNCIL OPINION

of 14 March 2006

on the updated stability programme of Portugal, 2005-2009

(2006/C 82/08)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council notes that the programme is broadly consistent with a correction of the excessive deficit by 2008, subject to a full implementation of the measures announced in the programme that need to be reinforced for the years 2007 and beyond to accommodate the downward risks to the budgetary targets. In the light of the recommendations under Article 104(7) of 20 September 2005, the Council invites Portugal to:

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  In particular, the programme does not follow the model structure of the new code of conduct, it rather presents four sections: Summary; Economic and budgetary backdrop; Economic and budgetary outlook and Sustainability of public finances. The programme provides all compulsory data and most optional data prescribed by the new code of conduct.

(3)  Commission services calculations on the basis of the information in the programme.

(4)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures.

(5)  There are no one-off and other temporary measures in the programme.

(6)  One-off and other temporary measures taken from the Commission services' autumn 2005 forecast: 2.2% of GDP in 2004, 0.4% of GDP in 2005 and 0.4% of GDP in 2006 and 0.1% of GDP in 2007; all deficit-reducing.

(7)  One-off operations taken from the June 2005 programme: 2.3% of GDP in 2004 and 0.2% of GDP in 2005; all deficit-reducing.

(8)  Based on estimated potential growth of 1.3%, 1.1%, 1.2% and 1.4% respectively in the period 2004-2007.

(9)  Private consumption deflator

Source:

Stability programme (SP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations

----

----

COUNCIL OPINION

of 14 March 2006

on the updated convergence programme of Cyprus, 2005-2009

(2006/C 82/09)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council welcomes the structural adjustment planned over the programme period after bringing the deficit below 3 % of GDP in 2005. In the light of the recommendations under Article 104(7), the Council invites Cyprus to:

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The programme provides all compulsory and most of the optional data prescribed by the code of conduct. Optional data on labour market developments (in particular, employment (hours worked) and labour productivity (hours worked)) and on the contributions to potential GDP growth are missing.

(3)  Commission services calculations on the basis of the information in the programme

(4)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures

(5)  One-off and other temporary measures taken from the programme (one-off revenues of 1.0% of GDP in 2004, 0.9% of GDP in 2005, and 0.3% of GDP in 2006-2008)

(6)  One-off and other temporary measures taken from the Commission services' autumn 2005 forecast (1.0% of GDP in 2004 and 0.6% of GDP in 2005)

(7)  Based on estimated potential growth of 4.0%, 3.5%, 3.5% and 3.5% respectively in the period 2004-2007.

(8)  The 2006 deficit projection was made under a no-policy change scenario, since the 2006 draft budget was not available at the cut-off date of the Commission services autumn 2005 forecast, which also partially explains a higher deficit projection for 2007.

Source:

Convergence programme (CP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations

----

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COUNCIL OPINION

of 14 March 2006

on the updated convergence programme of Lithuania, 2005-2008

(2006/C 82/10)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, and in the context of strong growth prospects and to ensure sustainable convergence with the EU, the Council invites Lithuania to:

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  Following a decision by Eurostat in May 2005 on the classification of payments related to the compensation for lost rouble savings in the early years of transition and the restitution of real estate property confiscated in Soviet times, the deficit target set in the previous update (2,5 % of GDP) has been adjusted to exclude payments related to these liabilities to allow for a meaningful comparison.

(3)  The programme provides all compulsory and most optional data prescribed by the new code of conduct, although the presentation of compulsory data is in a few cases slightly different from that in the new code of conduct, for instance domestic demand is shown instead of final domestic demand, interest expenditure corresponding to FISIM is missing and the tax burden shows what should be total taxes, i.e. the sum of direct, indirect and capital taxes, therefore indirect taxes paid to the EU budget and social contributions are missing in the calculation of the tax burden.

(4)  The costs of the ongoing pension reform (introduction of a second pillar) are included in the deficit. The costs are estimated at 0.3% in 2004, 0.5% of GDP in 2005, 0.7% in 2006, 0.8% in 2007 and 0.8% in 2008.

(5)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures. The adjustment taking out the pension reform costs according to the updated programme would be 0.5% of GDP in 2006, 0.7% in 2007 and 0.2% in 2008, or 0.5% on average in the period 2006-2008.

(6)  Commission services calculations on the basis of the information in the programme.

(7)  There are no one-off and other temporary measures in the programme.

(8)  There are no one-off and other temporary measures in the Commission services' forecast.

(9)  Based on estimated potential growth of 7.0%, 6.9%, 7.0% and 7.0% respectively in the period 2004-2007.

(10)  It included payments related to savings compensations and real estate restitutions amounting to 0.4% of GDP in 2005, 0.8% in 2006 and 1.2% in 2007.

Source:

Convergence programme (CP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations

----

----

COUNCIL OPINION

of 14 March 2006

on the updated convergence programme of Malta, 2005-2008

(2006/C 82/11)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council notes that, overall, the programme is consistent with the correction of the excessive deficit by 2006. In the light of the recommendations under Article 104(7), the Council invites Malta to:

Comparison of key macroeconomic and budgetary projections

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The programme has gaps in the compulsory and optional data prescribed by the new code of conduct. Specifically, price data are not consistent with the harmonised definition, and employment and unemployment figures are not based on labour force survey data but refer to registered persons, while forecasts for all the items included in the sectoral balances and FISIM data are not provided. Missing optional data mainly concern: employment and productivity in hours, forecasts of sectoral balances and breakdown of social transfers.

(3)  Details on long-term sustainability are provided in the technical assessment of the programme by the Commission services

(http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm).

(4)  CP figures correspond to the Retail Price Index.

(5)  Commission services' calculations on the basis of the information in the programme.

(6)  Cyclically-adjusted balance (as in the previous rows) excluding one-off and other temporary measures.

(7)  One-off and other temporary measures taken from the programme: 0.7% in 2004, 1.0% of GDP in 2005, 1.0% in 2006, 0.7% in 2007 and 0.1 in 2008; all deficit-reducing.

(8)  The Commission services' forecast include the same one-offs as the programme.

(9)  Based on estimated potential growth of 1.3%, 2.0%, 2.0% and 2.0% respectively in the period 2004-2007.

Source:

Convergence programme (CP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations.

----

----

COUNCIL OPINION

of 14 March 2006

on the updated convergence programme of Poland, 2005-2008

(2006/C 82/12)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council notes that the convergence programme envisages some progress, but not the effective correction of the excessive deficit in 2007, as required by the Council recommendation of 5 July 2004, and that the Commission intends to recommend further steps under the excessive deficit procedure as required by the Stability and Growth Pact. In the meantime, Poland should:

Comparison of key macroeconomic and budgetary projections (5)

----

(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  EDP definition, all pension funds classified within the general government sector, revised data.

(3)  The programme provides all compulsory and most optional data prescribed by the new code of conduct. The data on employment in hours worked and labour productivity measured as GDP per hours worked have not been provided. There are no data for general government expenditure by function for 2008. Differences between cash and accruals, net accumulation of financial assets are also missing. Total revenues and expenditures in Table 7 (long-term sustainability) are missing

(4)  Details on long-term sustainability are provided in the technical assessment of the programme by the Commission services

(http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm).

(5)  The budgetary projections exclude the impact of the Eurostat decision of 2 March 2004 on the classification of funded pension schemes, which needs to be implemented by the time of the spring 2007 notification. Including this impact, the general government balance according to the updated programme would be -5.6% of GDP in 2004, -4.7% in 2005, -4.6% in 2006, -4.1% in 2007 and -3.7% in 2008, while government gross debt would be 45.9% of GDP in 2004, 47.9% in 2005, 51.2% in 2006, 52.1% in 2007 and 52.6% in 2008.

(6)  Commission services calculations on the basis of the information in the programme

(7)  Cyclically-adjusted balance and structural balance are the same since one-off and other temporary measures taken from the programme are insignificant (0.04% of GDP in 2005, deficit-reducing)

(8)  There are no one-off and other temporary measures in the Commission services' forecast

(9)  Based on estimated potential growth of 3.3%, 3.6%, 4.2% and 4.5% respectively in the period 2004-2007.

Source:

Convergence programme (CP); Commission services' autumn 2005 economic forecasts (COM); Commission services' calculations

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COUNCIL OPINION

of 14 March 2006

on the updated convergence programme of the United Kingdom, 2005/2006-2010/2011

(2006/C 82/13)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 9(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

In view of the above assessment, the Council notes that the projected adjustment path is subject to risks. In the light of the recommendations under Article 104(7), and in order to address the risks to long-term sustainability, the Council invites the United Kingdom to:

Comparison of key macroeconomic and budgetary projections

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(1)OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The UK financial year runs from April to March.

(3)  In particular, the section on institutional features of the public finances is missing. The programme has gaps in the provision of compulsory data (for example, the forecasts for employment, unemployment and compensation of employees, and the breakdown of expenditure for the last year required are not provided), and does not provide all optional data. Data for general government expenditure and receipts, while based on ESA 95 components, use different aggregation methods from the harmonised measure. The programme update also continues the UK practice of accounting receipts from the sale of UMTS licences as an annual income stream rather than the sale of an asset, contrary to the Eurostat decision of 14 July 2000 on the allocation of such receipts. A number of data gaps have been filled through bilateral discussions between the Commission services and UK officials.

(4)  Details on long-term sustainability are provided in the technical assessment of the programme by the Commission services

(http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm).

(5)  GDP and inflation forecast underlying the authorities' projections for the public finances; derived from a scenario whereby trend growth is one-quarter percentage point higher.

(6)  Commission services' forecast is on a calendar year basis. According to first estimates, growth was 1.8% in 2005. The Commission services' interim forecast of 22 February 2006 projects growth of 2.4% in 2006.

(7)  Output gap calculations according to the commonly agreed methodology on the basis of data provided in the convergence programme. The output gap calculations are based on the data underlying the central trend growth scenario. Under the UK methodology, the two yield the same output gap profile.

(8)  Commission services' calculation of output gap is on a calendar year basis.

(9)  Figures in the convergence programme adjusted for treatment of UMTS receipts. The UK authorities include, in their projections for the general government balance, annual receipts of around £1.0 billion from the sale of UMTS licences in 2000. Adjusting for this, to bring the projections onto to an EDP basis, has the effect of subtracting around 0.1 pp from the balance (i.e. increasing the deficit) in each year. All data shown in this table are given after this adjustment, made by the Commission services, to the data in the programme.

(10)  Commission services' forecast is before discretionary measures announced in the December 2005 Pre-Budget Report and included in the convergence programme. Adding the net impact of the measures as estimated by the UK authorities, the Commission services' forecast would be a deficit at 3.4% of GDP in 2005/06, 3.1% in 2006/07 and 2.8% in 2007/08.

(11)  Data from the convergence programme adapted in line with a definition of the primary balance using gross rather than net interest payments.

(12)  Cyclically-adjusted balance (calculated according to the commonly agreed methodology) excluding one-offs and other temporary measures. The figures for cyclically adjusted and structural balances published in the programme, calculated according to the UK's own methodology, and based on nominal balances not corrected for the treatment of UMTS receipts, are: -2.9% of GDP in 2004/05, -2.2% in 2005/06, -1.7% in 2006/07, -1.7% in 2007/08, -1.7% in 2008/09, -1.6% in 2009/10, -1.5% in 2010/11.

(13)  There are no one-offs and temporary measures in the convergence programme projections and in the Commission services' forecast.

Source:

Convergence programme (CP), Commission services' calculations, Commission services' (COM) autumn 2005 forecast.

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Commission

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Euro exchange rates (1)

4 April 2006

(2006/C 82/14)

1 euro= 

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(1)

Source: reference exchange rate published by the ECB.

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Withdrawal of notification of a concentration

(Case COMP/M.4162 — Merck/Schering)

(2006/C 82/15)

(Text with EEA relevance)

On 16 March 2006, the Commission of the European Communities received notification of a proposed concentration between Merck KgaA (‘Merck’, Germany) and Schering Aktiengesellschaft (‘Schering’, Germany). On 27 March 2006, the notifying parties informed the Commission that they withdrew their notification.

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Information procedure — Technical rules

(2006/C 82/16)

(Text with EEA relevance)

Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services. (OJ L 204, 21.7.1998, p. 37; OJ L 217, 5.8.1998, p. 18).

Notifications of draft national technical rules received by the Commission

The Commission draws attention to the judgement delivered on 30 April 1996 in the ‘CIA Security’ case (C-194/94 — ECR I, p. 2201), in which the Court of Justice ruled that Articles 8 and 9 of Directive 98/34/EC (formerly 83/189/EEC) are to be interpreted as meaning that individuals may rely on them before national courts which must decline to apply a national technical regulation which has not been notified in accordance with the Directive.

This judgement confirms the Commission's communication of 1 October 1986 (OJ C 245, 1.10.1986, p. 4).

Accordingly, breach of the obligation to notify renders the technical regulations concerned inapplicable, and consequently unenforceable against individuals.

For more information on the notification procedure, please write to:

Also consult the website: http://europa.eu.int/comm/enterprise/tris/

If you require any further information on these notifications, please contact the national departments listed below:

LIST OF NATIONAL DEPARTMENTS RESPONSIBLE FOR THE MANAGEMENT OF DIRECTIVE 98/34/EC

BELGIUM

CZECH REPUBLIC

DENMARK

GERMANY

ESTONIA

GREECE

SPAIN

FRANCE

IRELAND

ITALY

CYPRUS

LATVIA

LITHUANIA

LUXEMBURG

HUNGARY

MALTA

NETHERLANDS

AUSTRIA

POLAND

PORTUGAL

SLOVENIA

SLOVAKIA

FINLAND

SWEDEN

UNITED KINGDOM

EFTA — ESA

TURKEY

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(1)  Year — registration number — Member State of origin.

(2)  Period during which the draft may not be adopted.

(3)  No standstill period since the Commission accepts the grounds of urgent adoption invoked by the notifying Member State.

(4)  No standstill period since the measure concerns technical specifications or other requirements or rules on services linked to fiscal or financial measures, pursuant to the third indent of the second paragraph of Article 1(11) of Directive 98/34/EC.

(5)  Information procedure closed.

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Notice of initiation of a partial interim review of the anti-dumping measures applicable to imports of silicon originating in Russia

(2006/C 82/17)

The Commission has received a request for a partial interim review pursuant to Article 11 (3) of Council Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community (‘the basic Regulation’) (1), as last amended by Council Regulation (EC) No 2117/2005 (2).

1.   Request for review

The request was lodged by SKU LLC, Sual-Kremny-Ural, Kamensk, Ural Region, Russia, and ZAO KREMNY, Irkutsk, Irkutsk Region, Russia (‘the applicant’), related exporters from Russia.

The request is limited in scope to the examination of dumping as far as the applicant is concerned.

2.   Product

The product under review is silicon originating in Russia (‘the product concerned’), currently classifiable within CN code 2804 69 00. This CN code is given only for information.

3.   Existing measures

The measures currently in force are a definitive anti-dumping duty imposed by Council Regulation (EC) No 2229/2003 (3), as last amended by Council Regulation (EC) No 821/2004 (4) on imports of silicon originating in Russia. An undertaking offered by the applicant has been accepted by Commission Decision of 13 April 2004 (5).

4.   Grounds for the review

The request pursuant to Article 11(3) is based on prima facie evidence, provided by the applicant, that the circumstances on the basis of which measures were established have changed and that these changes are of a lasting nature.

The applicant alleges, inter alia, that its export prices of the product concerned to the Community have increased significantly and substantially more than the domestic prices in Russia. This has led to a reduction or elimination of dumping. Therefore the continued imposition of measures at the existing levels, which were based on the level of dumping previously established is no longer necessary to offset dumping.

5.   Procedure for the determination of dumping

Having determined, after consulting the Advisory Committee, that sufficient evidence exists to justify the initiation of a partial interim review, the Commission hereby initiates a review in accordance with Article 11 (3) of the basic Regulation.

The investigation will assess the need for the continuation, removal or amendment of the existing measures in respect of the applicant.

(a)   Questionnaires

In order to obtain the information it deems necessary for its investigation, the Commission will send questionnaires to the applicant and to the authorities of the exporting country concerned. This information and supporting evidence should reach the Commission within the time limit set in point 6(a).

(b)   Collection of information and holding of hearings.

All interested parties are hereby invited to make their views known, submit information other than questionnaire replies and to provide supporting evidence. This information and supporting evidence must reach the Commission within the time limit set in point 6(a).

Furthermore, the Commission may hear interested parties, provided that they make a request showing that there are particular reasons why they should be heard. This request must be made within the time limit set in point 6(b).

6.   Time limits

(a)   For parties to make themselves known, to submit questionnaire replies and any other information

All interested parties, if their representations are to be taken into account during the investigation, must make themselves known by contacting the Commission, present their views and submit questionnaire replies or any other information within 40 days of the date of publication of this notice in the Official Journal of the European Union, unless otherwise specified. .Attention is drawn to the fact that the exercise of most procedural rights set out in the basic Regulation depends on the party's making itself known within the aforementioned period.

(b)   Hearings

All interested parties may also apply to be heard by the Commission within the same 40-day time limit.

7.   Written submissions, questionnaire replies and correspondence

All submissions and requests made by interested parties must be made in writing (not in electronic format, unless otherwise specified) and must indicate the name, address, e-mail address, telephone and fax numbers of the interested party. All written submissions, including the information requested in this notice, questionnaire replies and correspondence provided by interested parties on a confidential basis shall be labelled as ‘Limited (6)’ and, in accordance with Article 19(2) of the basic Regulation, shall be accompanied by a non-confidential version, which will be labelled ‘FOR INSPECTION BY INTERESTED PARTIES’.

Commission address for correspondence:

8.   Non-co-operation

In cases in which any interested party refuses access to or does not provide the necessary information within the time limits, or significantly impedes the investigation, findings, affirmative or negative, may be made in accordance with Article 18 of the basic Regulation, on the basis of the facts available.

Where it is found that any interested party has supplied false or misleading information, the information shall be disregarded and use may be made, in accordance with Article 18 of the basic Regulation, of the facts available. If an interested party does not cooperate or cooperates only partially, and use of facts available is made, the result may be less favourable to that party than if it had cooperated.

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(1)OJ L 56, 6.3.1996, p. 1.

(2)OJ L 340, 23.12.2005, p. 17.

(3)OJ L 339, 24.12.2003, p. 3.

(4)OJ L 127, 29.4.2004, p. 1.

(5)OJ L 127, 29.4.2004, p. 114.

(6)  This means that the document is for internal use only. It is protected pursuant to Article 4 of Regulation (EC) No 1049/2001 of the European Parliament and of the Council regarding public access to European Parliament, Council and Commission documents (OJ L 145, 31.5.2001, p. 43). It is a confidential document pursuant to Article 19 of the basic Regulation and Article 6 of the WTO Agreement on Implementation of Article VI of the GATT 1994 (Anti-dumping Agreement).

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Information communicated by Member States regarding State aid granted under Commission Regulation (EC) No 68/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to training aid

(2006/C 82/18)

(Text with EEA relevance)

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STATE AID — ITALY

State aid No C 34/2005 (ex N 113/2005) — Legge Regionale n. 17/2004 Art. 60 — Regione Sicilia

Invitation to submit comments pursuant to Article 88(2) of the EC Treaty

(2006/C 82/19)

(Text with EEA relevance)

By means of the letter dated 21 September 2005 reproduced in the authentic language on the pages following this summary, the Commission notified Italy of its decision to initiate the procedure laid down in Article 88(2) of the EC Treaty concerning the above mentioned measures.

Interested parties may submit their comments on the measures in respect of which the Commission is initiating the procedure within one month of the date of publication of this summary and the following letter, to:

These comments will be communicated to Italy. Confidential treatment of the identity of the interested party submitting the comments may be requested in writing, stating the reasons for the request.

SUMMARY

DESCRIPTION OF THE MEASURE

Comma 1 of Article 60 of Legge Regionale n.17, of 28 December 2004 (LR 17/2004) provides for a reduction in the rate of IRAP by 1 % in 2005, 0,75 % in 2006 and 0,5 % in 2007 for cooperatives (more precisely to ‘società cooperative a mutualità prevalente’) as defined in the Italian Civil Code. Comma 2 of the same Article extends the same benefit to security services companies as defined in Royal Decree n. 773/1931. These reductions have been decided by Regione Sicilia by virtue of the powers to adjust IRAP rate recognised to any Italian Region. The Italian authorities estimate that the budgetary impact of Article 60 at hand will be around EUR 2 million for the all period 2005-2007.

ASSESSMENT OF THE MEASURE

According to the Commission, the above advantage seems to fulfil all the relevant conditions of Article 87(1) of the EC Treaty.

The measure appears to afford to the beneficiaries an economic advantage consisting in the reduction of IRAP for a period of three years. The advantage seems also selective because it is restricted to cooperatives and to security services companies. Moreover the advantage seems to be attributable to the State as it consists in the foregoing of tax revenues by the Sicilian government.

Finally, the measure appears likely to distort competition and trade between Member States because the beneficiaries — be they cooperatives or security services companies — compete with other undertakings on markets open to competition. Indeed, cooperatives can be of all sizes and carry on business in all sectors, according to the submissions by the Italian authorities and therefore they compete with other undertakings on markets open to competition. Analogously, although the Italian authorities in their submissions argue that usually security services are not provided out of the territory where the security services companies are located, the Commission considers, at this step of the procedure, that the Italian authorities did not provide enough information to prove that competition for all kind of services supplied by security services companies has not taken place on an supranational scale and that trade and competition are not affected.

The Commission has doubts as to whether the state aid granted in favour of cooperatives and security services companies is compatible with the single market. At this stage of the procedure, it appears that the exceptions provided for in Article 87(2) and in Articles 87(3)(b), (c) and (d) cannot apply to the measure in question. The Italian authorities have presented some arguments to indicate that the exception provided for in Articles 87, paragraph (3)(a) of the EC Treaty, under which operating State aid may be considered compatible with the common market, applies in the present case, given that Sicily is an eligible region under such derogation.

However, The Commission, observes that the measure, as aid, must be considered as operating State aid because the tax advantage granted by the regime are not related to specific investments, to job creation or to specific projects but it constitutes a reduction of charges that should normally be borne by the firms concerned in the course of their business — in this case the IRAP tax liability. According to its established practice, the Commission considers that operating aid is normally prohibited. Such aid may be granted exceptionally provided that (i) it is justified in terms of its contribution to regional development and its nature and (ii) its level is proportional to the handicaps it seeks to alleviate. It is for the Member State to demonstrate the existence of any handicaps and gauge their importance.

At this step of the procedure, the Commission doubts that the Member State demonstrated the existence of a pertinent handicap and gauged its importance. In any case, Commission observes that the information submitted so far does not allow the Commission, to verify if the aid in question is justified by its contribution to regional development and if the amount of the aid provided is proportional to the handicaps it seeks to alleviate.

Since the measure, as aid, does not appear, at this step of the procedure, to qualify for any of the exceptions provided for in the Treaty, in the context of its preliminary assessment as provided by article 6 of Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 [now 88] of the EC Treaty, the Commission has doubts about its compatibility with the common market.

Considering its doubts on the compatibility of the aid, the Commission proposes to initiate the formal investigation procedure laid down in Article 88(2) of the EC Treaty.

TEXT OF LETTER

‘Con la presente la Commissione si pregia informare l'Italia che, dopo aver esaminato le informazioni fornite dalle autorità italiane in merito alla misura menzionata in oggetto, ha deciso di avviare il procedimento di cui all'articolo 88, paragrafo 2, del trattato CE.

PROCEDIMENTO

1.   DESCRIZIONE DETTAGLIATA DELLA MISURA

2.   VALUTAZIONE DELLA MISURA

Aiuti di Stato ai sensi dell'articolo 87, paragrafo 1 del trattato CE

Vantaggio economico

Favorire talune imprese o attività economiche

Comma 1

Comma 2

Distorsione della concorrenza ed incidenza sugli scambi tra gli Stati membri

Presenza di risorse statali

Compatibilità

Comma 1

Comma 2

Comma 1

Comma 2

3.   CONCLUSIONE

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(1)  Regolamento (CE) n. 69/2001 della Commissione, del 12 gennaio 2001, relativo all'applicazione degli articoli 87 e 88 del trattato CE agli aiuti d'importanza minore (“de minimis”), GU L 10 del 13.1.2001, pag. 1.

(2)Titolo VI del Libro V del Codice Civile, così come modificato dall'articolo 8 del decreto legislativo 17 gennaio 2003, n. 6.

(3)Titolo IV del Regio decreto 18 giugno 1931, n. 773 e successive modifiche e integrazioni. Il prefetto può negare la licenza anche in considerazione del numero o della importanza degli istituti già esistenti.

(4)  Regole speciali disciplinano la determinazione della base imponibile per le banche, le imprese di assicurazioni, i lavoratori autonomi, le autorità pubbliche e imprese private non commerciali.

(5)  Causa C-475/03.

(6)  Comunicazione della Commissione sull'applicazione delle norme relative agli aiuti di Stato alle misure di tassazione diretta delle imprese (GU C 384 del 10.12.1998, pag. 3, punto 25).

(7)  Cfr. ad esempio la causa C-143/99 Adria-Wien Pipeline GmbH e Wietersdorfer & Peggauer Zementwerke GmbH/Finanzlandesdirektion für Kärnten, Racc. 2001, pag. I-8365, riguardante un rimborso alle sole imprese produttrici di beni materiali.

(8)  Causa T-214/95 Het Vlaamse Gewest/Commissione, Racc. 1998, pag. II-717.

(9)  Orientamenti in materia di aiuti di Stato a finalità regionale, GU C 74 del 10.3.1998, pag. 9.

(10)  Cfr. nota 27 degli Orientamenti in materia di aiuti di Stato a finalità regionale citati.

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