38.

Calls on the Council to take account of the following modifications: COMMISSION RECOMMENDATION MODIFICATIONS BY PARLIAMENT Modification 1 Guideline 1 Guideline 1. To secure economic stability for sustainable growth Guideline 1. To secure economic stability for sustainable growth, social inclusion and increased employment in the global environment 1. In line with the Stability and Growth Pact, Member States should respect their medium-term budgetary objectives. As long as this objective has not yet been achieved, they should take all the necessary corrective measures to achieve it. Member States should avoid pro-cyclical fiscal policies. Furthermore, it is necessary that those Member States having an excessive deficit take effective action in order to ensure a prompt correction of excessive deficits. 1. In line with the Stability and Growth Pact, Member States should respect their medium-term budgetary objectives. As long as this objective has not yet been achieved, they should take all the necessary corrective measures to achieve it and ensure the modernisation of public administration as well as the consolidation of public finances . Member States should avoid pro-cyclical fiscal policies. Furthermore, it is necessary that those Member States having an excessive deficit take effective action in order to ensure a prompt correction of excessive deficits. 2. Member States posting current account deficits that risk being unsustainable should work towards correcting them by implementing structural reforms, boosting external competitiveness and, where appropriate, contributing to their correction via fiscal policies. 2. Member States posting current account deficits that risk being unsustainable should work towards correcting them by implementing structural reforms, boosting external competitiveness and, where appropriate, contributing to their correction via fiscal policies as well as through the consolidation of the results of economic growth and paying attention to better synergies between budgetary policy and productivity growth . 2a. In the interest of stability, Member States should not leave to monetary policy alone the whole responsibility for fighting the risk of inflation, particularly in the current situation of high exchange rates. Member States should put in place all other policies that can help fight the risk of inflation. 2b. Member States should increase the resilience of the EU economy by developing the external dimension of the internal market to address the issues related to growing global imbalances. 2c. Following the recent turbulences in the financial markets, the necessary measures to avoid a credit crunch and restore confidence in the financial markets must be taken to meet the investment needs of public and private actors. Modification 2 Guideline 2 Guideline 2. To safeguard economic and fiscal sustainability as a basis for increased employment Guideline 2. To safeguard economic and fiscal sustainability as a basis for enhanced growths prospects Member States should, in view of the projected costs of ageing populations , Member States should, in view of the projected demographic challenges ahead : 1. undertake a satisfactory pace of government debt reduction to strengthen public finances; 1. reform and re-enforce pension, social insurance and health care systems to ensure that they are financially viable and sustainable as well as socially adequate and accessible; 2. reform and re-enforce pension, social insurance and health care systems to ensure that they are financially viable, socially adequate and accessible; 2. undertake a satisfactory pace of government debt reduction at the same time improving debt management to strengthen public finances; 3. take measures to increase labour market participation and labour supply especially amongst women, young and older workers, and promote a lifecycle approach to work in order to increase hours worked in the economy. 3. take measures to increase labour market participation and labour supply especially amongst women, young and older workers, and promote a lifecycle approach to work in order to increase hours worked in the economy; and 3a. implement the ‘fifth freedom’ of knowledge and promote new skills; ensure life-long learning for all and modernise infrastructures for research, education and training systems. Modification 3 Guideline 3 Guideline 3. To promote a growth- and employment-orientated and efficient allocation of resources Guideline 3. To promote a growth- and employment-orientated and efficient allocation of resources and strengthen confidence in the economy Member States should, without prejudice to guidelines on economic stability and sustainability, re-direct the composition of public expenditure towards growth-enhancing categories in line with the Lisbon strategy, adapt tax structures to strengthen growth potential, ensure that mechanisms are in place to assess the relationship between public spending and the achievement of policy objectives, and ensure the overall coherence of reform packages. Member States should, without prejudice to guidelines on economic stability and sustainability, re-direct the composition of public expenditure towards growth-enhancing categories in line with the Lisbon strategy, adapt tax structures to strengthen growth potential, encouraging productivity-led growth , ensure that mechanisms are in place to assess the relationship between public spending and the achievement of policy objectives, such as high-quality investment in the Lisbon targets , and ensure the overall coherence of reform packages. Modification 4 Guideline 4 Guideline 4. To ensure that wage developments contribute to macroeconomic stability and growth Guideline 4. To ensure that wage developments contribute to macroeconomic stability and growth And to increase adaptability, Member States should encourage the right framework conditions for wage-bargaining systems, while fully respecting the role of the social partners, with a view to promote nominal wage and labour cost developments consistent with price stability and the trend in productivity over the medium term, taking into account differences across skills and local labour market conditions. And to increase adaptability, Member States should encourage the right framework conditions for wage-bargaining systems, while fully respecting the role of the social partners, with a view to promote nominal wage and labour cost developments consistent with price stability and the trend in productivity over the medium term, in particular taking into consideration financial market professionals, as well as differences across skills and local labour market conditions. Modification 5 Guideline 5 Guideline 5. To promote greater coherence between macroeconomic, structural and employment policies Guideline 5. To promote greater coherence between macroeconomic, structural and employment policies Member States should: 1. improve economic policy coordination to align their national reform agendas while taking into consideration economic diversity and differing traditions; Member States should pursue labour and product markets reforms that at the same time increases the growth potential and support the macroeconomic framework by increasing flexibility, factor mobility and adjustment capacity in labour and product markets in response to globalisation, technological advances, demand shift, and cyclical changes. In particular, Member States should: renew impetus in tax and benefit reforms to improve incentives and to make work pay; increase adaptability of labour markets combining employment flexibility and security; and improve employability by investing in human capital. 2. pursue labour and product markets reforms that at the same time increases the growth potential and support the macroeconomic framework ensuring flexibility by way of new forms of security , factor mobility and adjustment capacity in labour and product markets in response to globalisation, technological advances, demand shift, and cyclical changes. In particular, Member States should: renew impetus in tax and benefit reforms to improve incentives and to make work pay; increase adaptability of labour markets combining employment flexibility and security; and improve employability by investing in human capital; 3. pay particular attention to strengthening institutional and administrative efficiency; and 4. contribute to developing a comprehensive EU policy on immigration, including criteria and procedures for economic migration appropriate to labour market requirements. Modification 6 Guideline 6 Guideline 6. To contribute to a dynamic and well-functioning EMU, euro area Member States need to ensure better coordination of their economic and budgetary policies, in particular: Guideline 6. To contribute to a dynamic and well-functioning EMU, euro area Member States need to ensure better coordination of their economic and budgetary policies, in particular: -1. maximise positive spill-over effects of reforms as sharing a common currency and a common monetary policy offers an extra dimension to coordination; 1. pay particular attention to fiscal sustainability of their public finances in full compliance with the Stability and Growth Pact; 1. pay particular attention to fiscal sustainability of their public finances in full compliance with the Stability and Growth Pact; 2. contribute to a policy mix that supports economic recovery and is compatible with price stability, and thereby enhances confidence among business and consumers in the short run, while being compatible with long term sustainable growth; 2. contribute to a policy mix that supports economic recovery and is compatible with price stability, and thereby enhances confidence among business and consumers in the short run, while being compatible with long term sustainable growth; 3. press forward with structural reforms that will increase euro area long-term potential growth and will improve its productivity, competitiveness and economic adjustment to asymmetric shocks, paying particular attention to employment policies; and 3. press forward with structural reforms and pursue investment priorities in line with the Lisbon goals that will increase euro area long-term potential growth and will improve its productivity, competitiveness and economic adjustment to asymmetric shocks, paying particular attention to employment policies; and 4. ensure that the euro area's influence in the global economic system is commensurate with its economic weight. 4. ensure that the EU and euro area's influence in the global economic system is commensurate with their economic weight. Modification 7 Guideline 7, introductory part and paragraphs 1, 2 and 3 Guideline 7. To increase and improve investment in R & D, in particular by private business, the overall objective for 2010 of 3 % of GDP is confirmed with an adequate split between private and public investment, Member States will define specific intermediate levels . Member States should further develop a mix of measures appropriate to foster R & D, in particular business R & D, through : Guideline 7. To increase and improve investment in R & D, in particular by private business, the overall objective for 2010 of 3 % of GDP is confirmed with an adequate split between private and public investment and to promote an entrepreneurial culture and encourage private initiative , Member States should further develop a mix of measures appropriate to foster the modernisation of the economy and all forms of innovation, by : 1. improved framework conditions and ensuring that companies operate in a sufficiently competitive and attractive environment; 1. developing market-responsive institutions and improved framework conditions to ensure that companies operate in a sufficiently competitive business environment and benefit from implementation of innovations ; 2. more effective and efficient public expenditure on R & D and developing PPPs; 3. developing and strengthening centres of excellence of educational and research institutions in Member States, as well as creating new ones where appropriate, and improving the cooperation and transfer of technologies between public research institute and private enterprises; 3a encouraging the decentralisation of industrial research centres for their further reconnection with education centres and exploring the diversity of different research cultures; Modification 8 Guideline 11, paragraphs 4a and 4b (new) 4a. deliver on the commitments they have taken at the 2007 Spring European Council to tackle the energy and environmental challenge; and 4b. in a context of rising food prices that seems not to be cyclical but will remain in place, revise the mechanisms of the Common Agricultural Policy that constrain the supply. Modification 9 Guideline 12 Guideline 12. To extend and deepen the internal market, Member States should: Guideline 12. To extend and deepen the internal market and ensure open and competitive markets , Member States should: 1. speed up the transposition of internal market directives; 1. speed up the transposition of internal market directives and eliminate remaining obstacles to cross-border activity ; 2. give priority to stricter and better enforcement of internal market legislation; 2. give priority to stricter and better enforcement of internal market legislation; 3. eliminate remaining obstacles to cross-border activity; 3. eliminate remaining obstacles to cross-border activity; 4. apply EU public procurement rules effectively; 4. apply EU public procurement rules effectively; 5. promote a fully operational internal market of services, while preserving the European social model; 5. promote a fully operational internal market of services and ensure universal, accessible and sustainable public services with affordable prices and high-quality standards for all , while preserving the European social model; 6. accelerate financial market integration by a consistent and coherent implementation and enforcement of the Financial Services Action Plan. 6. accelerate market integration of services, including financial services , by a coherent implementation of internal market legislation and enforcement of the Financial Services Action Plan while improving transparency, responsibility and supervision for investors, markets and regulators with regard to alternative as well as non-alternative financial market investment activities; 6a. contribute to the development of a balanced approach towards the regulation of the cross-border spread of financial risk; 6b. develop adequate conditions for enhanced resource-efficiency in transport and energy infrastructures, focusing on cross-border sections, peripheral regions and the interconnection between ‘old’ and ‘new’ Member States; and 6c. play a leading role at the international level regarding issues of crisis management and the improvement of the current global supervision arrangements. Modification 10 Guideline 13, paragraph 6a (new) 6a. the completion of a transatlantic market;