Recommendation for a COUNCIL RECOMMENDATION on France’s 2013 national reform programme and delivering a Council opinion on France’s stability programme for 2012-2017
Date: 2013-05-29
Institutions: European Commission
Subjects: France, administrative formalities, budget deficit, budgetary equilibrium, innovation, job creation, liberal profession, liberalisation of the market, public expenditure, retirement conditions, stability programme, tax reform

EUROPEAN 
COMMISSION 

Brussels, 29.5.2013  
COM(2013) 360 final 

Recommendation for a 

COUNCIL RECOMMENDATION 

on France’s 2013 national reform programme  

and delivering a Council opinion on France’s stability programme for 2012-2017 

{SWD(2013) 360 final} 

EN 

   EN 

 
 
 
  
 
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on France’s 2013 national reform programme  

and delivering a Council opinion on France’s stability programme for 2012-2017 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 
Having regard to the recommendation of the European Commission3, 
Having regard to the resolutions of the European Parliament4, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

After consulting the Economic and Financial Committee, 

Whereas: 

(1) 

(2) 

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

On 13 July 2010, on the basis of the Commission's proposals, the Council adopted on 
13 July 2010 a recommendation on the broad guidelines for the economic policies of 
the Member States and the Union (2010 to 2014) and, on 21 October 2010, adopted a 
decision  on  guidelines  for  the  employment  policies  of  the  Member  States5,  which 
together  form  the  ‘integrated  guidelines’.  Member  States  were  invited  to  take  the 
integrated guidelines into account in their national economic and employment policies. 

(3) 

On 29 June 2012, the Heads of State or Government decided on a Compact for Growth 
and  Jobs,  providing  a  coherent  framework  for  action  at  national,  EU  and  euro  area 

1 
2 
3 
4 
5 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
COM(2013) 360 final. 
P7_TA(2013)0052 and P7_TA(2013)0053. 
Council Decision 2013/208/EU of 22 April 2013. 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

levels using all possible levers, instruments and policies. They decided on action to be 
taken  at  the  level  of  the  Member  States,  in  particular  expressing  full  commitment  to 
achieving the objectives of the Europe 2020 Strategy and to implementing the country-
specific recommendations. 

On 6 July 2012, the Council adopted a recommendation on France’s national reform 
programme  for  2012  and  delivered  its  opinion  on  France’s  updated  stability 
programme for 2011-2016. 
On  28  November  2012,  the  Commission  adopted  the  Annual  Growth  Survey6, 
marking  the  start  of  the  2013  European  Semester  for  economic  policy  coordination. 
Also  on  28  November  2012,  the  Commission,  on  the  basis  of  Regulation  (EU)  No 
1176/2011, adopted the Alert Mechanism Report7, in which it identified France as one 
of the Member States for which an in-depth review would be carried out. 

On  14  March  2013,  the  European  Council  endorsed  the  priorities  for  ensuring 
financial stability, fiscal consolidation and action to foster growth. It underscored the 
need  to  pursue  differentiated,  growth-friendly  fiscal  consolidation,  to  restore  normal 
lending conditions to the economy, to promote growth and competitiveness, to tackle 
unemployment  and  the  social  consequences  of  the  crisis,  and  to  modernise  public 
administration. 
On  10  April  2013,  the  Commission  published  the  results  of  its  in-depth  review8  for 
France, under Article 5 of Regulation (EU) No 1176/2011. The Commission’s analysis 
leads  it  to  conclude  that  France  is  experiencing  macroeconomic  imbalances,  which 
require monitoring and decisive policy action. In particular, developments related to a 
deterioration  in  the  trade  balance  and  competitiveness,  driven  both  by  cost  and  non-
cost  factors,  also  in  the  context  of  a  deteriorating  external  position  and  high  public 
debt  deserves  continued  attention  so  as  to  reduce  the  risk  of  adverse  effects  on  the 
functioning of the French economy and of the Economic and Monetary Union, notably 
given the size of the French economy. 

On 30 April 2013, France submitted its 2013 stability programme covering the period 
2012-2017 and its 2013 national reform programme. In order to take account of their 
inter-linkages, the two programmes have been assessed at the same time. 

Based  on  the  assessment  of  the  2013  Stability  Programme  pursuant  to  Council 
Regulation (EC) No 1466/97, the Council is of the opinion that despite considerable 
consolidation  efforts  that  brought  the  headline  deficit  down  from  7.5  %  of  GDP  in 
2009 to 4.8 % in 2012, France is not expected to correct its excessive deficit by 2013 
as  recommended  by  the  Council  in  late  2009.  This  is  linked  notably  to  a  worse 
economic environment than expected at the time the recommendation was made which 
was  only  partly  compensated  by  windfall  revenues,  while  the  effort  was  somewhat 
backloaded.  The  macroeconomic  scenario  underpinning  the  budgetary  projections  in 
the programme is plausible for 2013 but overly optimistic for 2014. In particular, the 
authorities  anticipate  that  after  a  standstill  in  2012  (0%)  and  in  2013  (+0.1%),  GDP 
will grow by 1.2% in 2014 while assuming that fiscal measures are taken to bring the 
general  government  deficit  to  2.9%  of  GDP.  By  comparison,  the  Commission 
forecasts  that  GDP  will  grow  by  1.1%  in  2014  based  on  a  no-policy-change 
assumption, a scenario which only takes into account measures that have been adopted 

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8 

COM(2012) 750 final. 
COM(2012) 751 final. 
SWD(2013) 117 final. 

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or  sufficiently  specified  and  hence  forecasts  a  deficit  of  4.2%  of  GDP.  The  main 
objective  of  the  budgetary  strategy  outlined  in  the  programme  is  to  achieve  the 
medium-term objective (MTO), which is a balanced budget in structural terms, as in 
last  year's  programme.  This  is  more  ambitious  than  required  by  the  Stability  and 
Growth Pact. The target year for reaching the MTO is 2016, compared with 2015 in 
the  previous  stability  programme.  The  planned  headline  deficit  set  by  the  stability 
programme is consistent with a correction of the excessive deficit by 2014, one year 
after the revised deadline set by the Council under the excessive deficit procedure in 
late  2009.  Given  the  overly  optimistic  growth  forecast  in  the  programme  for  2014, 
unless additional measures are taken to substantially reinforce the effort for that year, 
the  Council  considers  that  the  fiscal  effort  envisaged  by  the  authorities  is  not 
compatible with an actual correction of the excessive deficit by 2014. Planned savings 
and additional revenue also lack specifics. In these circumstances, measures need to be 
specified  for  both  2014  and  2015  to  credibly  ensure  that  the  excessive  deficit  is 
corrected  by  2015  at  the  latest  [as  recommended  by  the  Council].  In  2016,  the 
structural  balance,  as  recalculated  by  the  Commission,  is  expected  to  be  -0.4  %  of 
GDP  (-0.3  %  in  2017)  and  thus  the  MTO  would  not  be  reached  by  the  end  of  the 
programme  horizon.  Progress  towards  the  MTO  in that year is expected to  represent 
0.3% of GDP, which is below the 0.5% of GDP benchmark. The general government 
debt has increased substantially since the beginning of the crisis. Starting from 64.2% 
in 2007, the ratio of debt to GDP reached 90.2% in 2012 and is projected to increase 
further to 96.2% by 2014 according to the Commission services' 2013 Spring Forecast. 
The authorities expect the debt ratio to peak at 94.3% of GDP in 2014 and then to drop 
to  88.2%  in  2017.  France  will  be  in  a  transition  period  from  2016  regarding 
compliance with the debt criterion.  

(10)  Given  the  high  and  still  increasing  debt  and  the  fact  that  the  deadline  to  correct  the 
excessive  deficit  is  postponed  again,  [to  2015],  it  is  all  the  more  important  that  the 
2013  budget  is  strictly  implemented  and  substantial  consolidation  efforts  are  firmly 
pursued in subsequent  years. In particular, it is crucial that France’s public spending 
grows significantly less rapidly than potential GDP as improvements in the structural 
deficit  have  so  far  been  mainly  revenue  based.  In  this  respect,  the  on-going  public 
spending  review  ('Modernisation  de  l’action  publique'),  whose  scope  includes  local 
government  and  social  security  administrations  in  addition  to  central  government, 
should  provide  indications  to  further  improve  the  efficiency  of  public  expenditure. 
There  is  also room  for further  streamlining of the different administrative layers and 
competences  in order  to achieve further  synergies,  efficiency gains  and  savings. The 
planned  new  decentralisation  law  should  address  this  issue.  In  view  of  the  expected 
increase  over  the  medium-and  long-term  in  public  health  care  expenditure,  future 
public expenditure on health care requires greater scrutiny and efficiency, in particular 
in  pharmaceutical  spending.  The  most  recent  projections  by  the  Pensions  Advisory 
Council ('Conseil d'orientation des retraites') point to persistent deficits of the pensions 
system by 2018, contrary to the 2010 reform objective of achieving a balanced system 
by  that  time.  In  addition,  the  partial  rollback  of  the  2010  reform  goes  against  the 
Council  recommendation.  Hence,  the  pension  system  will  still  face  large  deficits  by 
2020  and  new  policy  measures  are  urgently  needed  to  remedy  this  situation  while 
preserving the adequacy of the system. Such measures could include further increasing 
both  the  minimum  and  the  full-pension  retirement  ages  as  well  as  the  contribution 
period  to  obtain  a  full  pension,  adapting  the  indexation  rules  and  reviewing  the 
currently  numerous  exemptions  to  the  general  scheme  for  specific  categories  of 
workers.  Given  its  negative  impact  on  the  cost  of  labour,  an  increase  in  the  level  of 

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social security contributions should be avoided. In light of the public finance challenge 
faced by France, it is of critical importance that fiscal measures are complemented by 
increased efforts to pursue structural reforms in order to support and increase the long-
term growth potential of the French economy. 

(11)  As  shown  by  the  2013  In-Depth  Review  (IDR),  France’s  competitiveness  remains  a 
significant challenge, as the strong erosion of its export markets shares in recent years 
shows. The French government proposed in November 2012 several policy measures 
in the context of the ‘Competitiveness Pact’. The introduction of a corporate income 
tax credit (crédit d’impôt pour la compétitivité et l’emploi — CICE), with a planned 
full-year  impact  of  EUR  20  billion,  is  a  significant  step  which  should  contribute  to 
lowering labour costs. There is room for further action as the new tax credit does no 
more than halve the gap between the French tax wedge and the OECD average at the 
level of the median wage. In addition, the fiscal measures affecting companies adopted 
since 2010 result in an overall increase in business taxation, even when corrected for 
that measure. The increase in the minimum wage decided in July 2012, while limited, 
may  have  a  negative  impact  on  job  and  competitiveness,  as  stressed  by  the  2012 
Council  recommendation.  Between  2002  and  2012,  the  hourly  minimum  wage 
increased  by  38%  (16%  in  real  terms).  The  high  level  of  the  minimum  wage,  which 
represents two thirds of the median wage, is partially compensated for employers by a 
number of social security contribution exemptions for employers. The related cost for 
public finances has increased rapidly over the last few years, representing more than 
1 %  of  GDP,  in  part  to  compensate  for  the  rapid  increase  in  the  minimum  wage.  In 
addition,  alternative  instruments  such  as  income  support  schemes  (the  ’Prime  pour 
l'emploi’ and the ’Revenu de solidarité active’) are more efficient instruments than the 
minimum wage to address in-work poverty.  

(12)  As regards non-price competitiveness, while the government has recently renewed its 
export  strategy,  supporting  the  development  of  export  oriented  networks  and 
partnerships  would  promote  the  internationalisation  of  SMEs9.  More  generally, 
measures  could  be  taken  to  ensure  that  the  business  environment  is  conducive  to 
SMEs'  growth.  Despite  considerable  efforts  deployed  by  firms  in  R&D-intensive 
sectors  and  sizeable  government  support  (e.g.  the  research  tax  credit),  high-  and 
medium-high-tech sectors represent only a modest and declining share of the French 
economy. Hence, there is a need to foster the creation and growth of SMEs and mid-
tier  companies  (ETI)  in  these  sectors  by  improving  the  framework  conditions  that 
encourage innovation and entrepreneurship. The cluster policy that has been developed 
to  link  public  research  and  private  companies  might  also  be  further  geared  towards 
positive  externalities  between  private  companies  located  closely  to  one  another.  In 
addition, PhD studies and research experience should be made sufficiently attractive to 
further foster linkages between private companies and research institutions. 

(13)  With  regard  to  services,  only  limited  progress  was  seen  in  the  course  of  2012.  In 
particular,  no  horizontal  reform  was  initiated  to  remove  unjustified  restrictions  in 
regulated  sectors  and  professions.  Many  professional  service  providers  still  face 
restrictions as regards their legal form and shareholding structure (e.g. restrictions on 
capital ownership for veterinarians and lawyers). Other significant barriers to entry or 
practice (such as commercial communications, quotas or territorial restrictions) remain 
in  a  number  of  sectors  (such  as  taxis,  certain  health  professions,  notaries  and  other 
legal professions). The retail sector is still subject to a number of regulations, such as 

9 

European  Commission  (2011),  "Small  business,  big  world  -  a  new  partnership  to  help  SMEs  seize 
global opportunities", COM(2011) 702 

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cumbersome  and  time-consuming  authorisation  procedures  for  the  establishment  of 
retail outlets. In addition, the existing ban on selling below costs induces a number of 
distortions  while  the  objective  of  supporting  producers  and  small  distribution  outlets 
could  be  effectively  achieved  through  less  distortionary  measures.  These  excessive 
restrictions in regulated sectors and professions weigh on competition and tend to raise 
their  prices.  As  the  in-depth  review  shows,  higher  prices  in  intermediary  services, 
which account for close to a quarter of production costs in the manufacturing sector, 
ultimately  impact  on  the  external  competitiveness  of  French  firms.  Limited  progress 
was  achieved  in  2012  on  network  industries.  The  French  electricity  market  remains 
one of the most concentrated in the EU. Regulated prices in electricity and gas distort 
competition and continue to act as a barrier for new entrants. Regulated tariffs for non-
household  customers  should  be  removed  according  to  the  timetable  agreed  with  the 
French authorities. More interconnection capacity with neighbouring countries and the 
launch  of  the  tenders  for  hydro-concessions  would  also  contribute  to  fostering 
competition  in  the  electricity  market.  In  the  railway  sector,  the  rail-freight  market  is 
less dynamic than in other Member States, while rail passenger transport is not open to 
competition, except for international services. The forthcoming reform should ensure 
that  any  new  ‘unified  infrastructure  manager’  remains  independent  of  the  incumbent 
operator to guarantee new entrants fair and non-discriminatory access. 

(14)  The French tax system remains complex and lacks efficiency due to the wide range of 
exemptions,  special  allowances,  but  also  frequent  changes  in  legislation.  Despite 
efforts  to  reduce  and  streamline  tax  expenditures,  the  amount  of  foregone  revenue 
from these remains high. The choice of a broad base-low rate approach for corporate 
and personal income taxation would be more conducive to growth and social welfare. 
The  intermediate  VAT  rate  is  set  to  increase  from  7  %  to  10  %  from  January  2014. 
This is a move in the right direction but additional efforts are necessary. Overall, the 
cost  of  tax  and  social-security  exemptions  remains  very  high  up  to  10%  of  GDP. 
Despite  the  demonstrated  ineffectiveness  of  some  reduced  VAT  rates,  such  as  those 
for restaurant services, no sufficiently differentiated policy measures have been taken. 
The introduction of the CICE tax credit, financed partly through the above-mentioned 
increase  in  the  intermediate  but  also  standard  VAT  rates,  shifts  the  tax  burden  away 
from labour. Further scope for action is however needed, in particular to rebalance the 
share of environmental taxes. Last year, France adopted some measures to address tax 
incentives  to  indebtedness  in  corporate  taxation.  However,  there  is  scope  for  further 
improvement (interest deduction is only limited above EUR 3 million and only 15% of 
the interest above that limit will be disallowed for tax deductibility in 2013 and 25% in 
2014). 

(15)  The  unemployment  rate  increased  from  9.7 %  in  2010  to  10.2 %  in  2012.  The 
Commission forecasts that the unemployment rate will increase to 10.6% in 2013 and 
10.9%  in  2014  due  to  persistently  weak  economic  growth.  Against  this  background, 
the segmentation of the French labour market continues to be a source of concern. The 
likelihood of moving from a temporary to a permanent job was only 10.6 % in 2010, as 
against  25.9 %  on  average  in  the  EU.  As  a  result,  low-skilled  workers  in  precarious 
forms  of employment  tend to bear the brunt of any adjustment process in the labour 
market.  A  law  was  adopted  in  May  2013,  based  on  the  inter-professional  agreement 
(ANI)  on  securing  jobs  concluded  between  the  social  partners  in  January  2013.  It 
foresees  increased  rights  for  workers,  addressing  the  legal  uncertainty  of  dismissals 
and greater flexibility for employers. The law is a positive step towards a more fluid 
labour market. The actual implementation of this reform, as well as its impact, remain 
uncertain at this stage because following the adoption of the law transposing the ANI 

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further  branch/enterprises  agreements  will  be  needed  before  the  agreement  can  fully 
enter into force.  

(16)  A sixth of young people in France leave education and training without a qualification. 
This is particularly worrying as the unemployment rate of young people was of 25.4% 
at the end of 2012 and as the risk of being unemployed was almost two times higher 
for the least qualified young people. Schemes to promote apprenticeships should reach 
in  particular  the  least  qualified  young  people.  The  alignment  of  national  schemes  to 
the  Youth  Guarantee  Council  recommendation  should  play  a  structuring  role  in 
responding  to  these  challenges.  Despite  reforms  initiated  in  2009,  the  French 
participation  rate  of  adults  in  lifelong  learning  (5.7 %  in  2012,  low-skilled  adults: 
2.5 %) is below the EU average. The planned transfer of competences to the regional 
Councils  might  provide  an  opportunity  to  address  the  weaknesses  of  the  current 
system. The employment rate for workers aged 55-64 is among the lowest in the EU 
(45.7 %  in  the  fourth  quarter  of  2012),  and  unemployment  is  rising  among  older 
people.  Although  a  step  in  the  right  direction,  it  is  not  clear  to  what  extent  the 
‘generation  contracts’  will  contribute  to  the  employment  of  older  workers  and 
facilitate  a  return  to  work  by  older  jobseekers.  French  public  spending  on 
unemployment benefits rose by 5.3 % in 2012 and are expected to further increase by 
6.1 %  in  2013  according  to  the  stability  programme.  The  cumulated  deficit  of  the 
unemployment  regime,  which  would  be  close  to  1 %  of  GDP  by  2013,  calls  for  a 
reform of the unemployment benefit system. In particular, some elements, such as the 
eligibility  conditions,  the  degressivity  of  benefits  over  time  or  the  replacement  rates 
for workers with the highest wages should be adapted to ensure that incentives to work 
are  adequate.  The  new  tripartite  convention  of  the  public  employment  service  (Pôle 
emploi)  foresees  a  differentiated  follow-up  of  jobseekers.  The  average  size  of  a  job 
counsellor’s portfolio has however further increased due to the rising unemployment 
level  and  the  reorientation  of  the  Pôle  emploi  strategy  is  hampered  by  the  weak 
economic  situation.  All  in  all,  there  is  a  need  to  take  further  action  in  view  of  the 
negative  economic  prospects  and  the  expected  further  increase  in  unemployment  in 
France. 

(17) 

(18) 

(19) 

In  the  context  of  the  European  Semester,  the  Commission  has  carried  out  a 
comprehensive  analysis  of  France’s  economic  policy.  It  has  assessed  the  stability 
programme and national reform programme, and presented an in-depth review. It has 
taken into account not only their relevance for sustainable fiscal and socio-economic 
policy in France but also their compliance with EU rules and guidance, given the need 
to reinforce the overall economic governance of the European Union by providing EU-
level  input  into  future  national  decisions.  Its  recommendations  under  the  European 
Semester are reflected in recommendations (1) to (6) below. 

In  the  light  of  this  assessment,  the  Council  has  examined  France’s  stability 
programme, and its opinion10 is reflected in particular in recommendation (1) below. 

the  national  reform  programme  and 

In the light of the Commission’s in-depth review and this assessment, the Council has 
examined 
the  stability  programme.  Its 
recommendations under Article 6 of Regulation (EU) No 1176/2011 on the prevention 
and  correction  of  macroeconomic  imbalances  are  reflected  in  recommendations  (1), 
(2), (3), (4), (5) and (6) below. 

(20) 

In  the  context  of  the  European  Semester  the  Commission  has  also  carried  out  an 
analysis of the economic policy of the euro area as a whole. On this basis the Council 

10 

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

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has issued specific recommendations addressed to the Member States whose currency 
is  the  euro.  France  also  should  ensure  the  full  and  timely  implementation  of  these 
recommendations. 

HEREBY RECOMMENDS that France should take action within the period 2013-2014 to: 

1. 

2. 

3. 

4. 

5. 

Reinforce and pursue the budgetary strategy in 2013. Enhance the credibility of the 
adjustment by specifying by autumn 2013 and implementing the necessary measures 
for  the  year  2014  and  beyond  to  ensure  a  correction  of  the  excessive  deficit  in  a 
sustainable  manner  by  2015  at  the  latest  and  the  achievement  of  the  structural 
adjustment effort specified in the Council recommendations under the EDP. Use all 
windfall  gains  for  deficit  reduction.  A  durable  correction  of  the  fiscal  imbalances 
requires  a  credible  implementation  of  ambitious  structural  reforms  to  increase  the 
adjustment capacity and boost growth and employment. Maintain a growth-friendly 
fiscal consolidation course and further increase the efficiency of public expenditure, 
in particular by proceeding as planned with a review of spending categories across all 
sub-sectors  of  general  government.  Take  action 
the  forthcoming 
decentralisation law to achieve better synergies and savings between central, regional 
and local government levels. After the correction of the excessive deficit, pursue the 
structural  adjustment  effort  at  an  adequate  pace  so  as  to  reach  the  MTO  by  2016,. 
Take  measures  by  the  end  of  2013  to  bring  the  pension  system  into  balance  in  a 
sustainable  manner  no  later  than  2020,  for  example  by  adapting  indexation  rules, 
further  increasing  the  statutory  retirement  age  and  full-pension  contribution  period 
and  reviewing  special  schemes,  while  avoiding  an  increase  in  employers'  social 
the  cost-effectiveness  of  healthcare  expenditure, 
increase 
contributions,  and 
including in the areas of pharmaceutical spending. 

through 

Ensure  that  the  ‘crédit  d’impôt  compétitivité  et  emploi’  effectively  reduces  labour 
costs  by  the  planned  amount  and  that  no  other  measure  will  offset  its  effect.  Take 
further  action  to  lower  the  cost  of  labour, in  particular  through  further  measures  to 
reduce  employers’  social-security  contributions.  Ensure  that  developments  in  the 
minimum  wage  are  supportive  of  competitiveness  and  job  creation,  taking  into 
account the existence of wage support schemes and social contribution exemptions.  

Take measures to improve the business environment and develop the innovation and 
export capacity of firms, in particular SMEs and enterprises of intermediate size. In 
the  regulatory 
particular, 
framework,  and  improve  the  framework  conditions  for  innovation,  by  enhancing 
technology transfer and the commercial exploitation of research, including through a 
reorientation of the competitiveness poles.  

the  announced  simplification 

initiative  of 

launch 

Take action to enhance competition in services; remove unjustified restrictions in the 
access  to  and  exercise  of  professional  services,  notably  regarding  legal  form, 
shareholding  structure,  quotas  and  territorial  restrictions;  take  action  to  simplify 
authorisation for the opening of trade outlets and to remove the ban of sales at a loss; 
remove  regulated  gas  and  electricity  tariffs  for  non-household  customers  and 
strengthen  interconnection  capacity  with  neighbouring  countries;  in  the  railway 
sector, open domestic passenger transport to competition.  

Pursue efforts to simplify the tax system and improve its efficiency, while ensuring 
continuity of tax rules over time. Take measures to remove the debt bias in corporate 
taxation. Step up efforts to reduce and streamline personal and corporate income tax 
expenditures  while  reducing  statutory  rates;  bring  reduced  VAT  rates  closer  to  the 

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6. 

standard rate and remove inefficient reduced rates. Take further measures shifting the 
tax burden from labour to environmental taxation or consumption.  

Implement fully and without delay the January 2013 inter-professional agreement, in 
consultation  with  the  social  partners.  Take  further  action  to  combat  labour-market 
segmentation,  in  particular  to  address  the  situation  of  interim  agency  workers. 
Launch  urgently  a  reform  of  the  unemployment  benefit  system  in  association  with 
the  social  partners  to  ensure  sustainability  of  the  system  while  ensuring  that  it 
provides  adequate  incentives  to  return  to  work.  Enhance  the  employment  rate  of 
older  workers  and  stimulate  their  participation  in  the  labour  market.  Take  specific 
action  to  improve  the  employment  perspective  of  older  unemployed  people  in 
particular  through  specific  counselling  and  training.  Increase  adult  participation  in 
lifelong learning, especially of the least qualified and of the unemployed. Ensure that 
public  employment  services  effectively  deliver  individualised  support  to  the 
unemployed  and  that  active  labour  market  policies  effectively  target  the  most 
disadvantaged. Take further measures to improve the transition from school to work 
through, for example, a Youth Guarantee and promotion of apprenticeship. 

Done at Brussels,  

Done at Brussels,  

For the Council 
The President 

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