Recommendation for a COUNCIL RECOMMENDATION on the 2018 National Reform Programme of Portugal and delivering a Council opinion on the 2018 Stability Programme of Portugal
Date: 2018-05-23
Institutions: European Commission, Secretariat-General
Subjects: Portugal, adult education, budget deficit, credit policy, economic policy, economic reform, labour market, public finance, stability programme, temporary employment

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   EUROPEAN COMMISSION  Brussels, 23.5.2018 COM(2018) 421 final  Recommendation for a COUNCIL RECOMMENDATION on the 2018 National Reform Programme of Portugal  and delivering a Council opinion on the 2018 Stability Programme of Portugal  
 
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2018 National Reform Programme of Portugal 

and delivering a Council opinion on the 2018 Stability Programme of Portugal 

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, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

On  22  November  2017,  the  Commission  adopted  the  Annual  Growth  Survey, 
marking the start of the 2018 European Semester of economic policy coordination. It 
took  due  account  of  the  European  Pillar  of  Social  Rights,  proclaimed  by  the 
European Parliament, the Council and the Commission on 17 November 2017. The 
priorities of the Annual Growth Survey were endorsed by the European Council on 
22  March  2018.  On  22  November  2017,  on  the  basis  of  Regulation  (EU)  No 
1176/2011,  the  Commission  also  adopted  the  Alert  Mechanism  Report,  in  which  it 
identified Portugal as one of the Member States for which an in-depth review would 
be carried out. On the same day, the Commission also adopted a recommendation for 
a  Council  recommendation  on  the  economic  policy  of  the  euro  area,  which  was 

1 
2 
3 
4 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
COM(2018) 421 final. 
P8_TA(2018)0077 and P8_TA(2018)0078. 

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endorsed by the European Council on 22 March 2018. On 14 May 2018, the Council 
the  euro  area 
the  recommendation  on 
adopted 
(‘recommendation for the euro area’). 

the  economic  policy  of 

As a Member State whose currency is the euro and in view of the close interlinkages 
between  the  economies  in  the  Economic  and  Monetary  Union,  Portugal  should 
ensure  the  full  and  timely  implementation  of  the  recommendation  on  the  economic 
policy for the euro area, as reflected in recommendations (1) to (3) below.  
The 2018 country  report for Portugal5 was published  on 7  March 2018. It assessed 
Portugal’s progress in addressing the country-specific recommendations adopted by 
the Council on 11 July 2017, the follow-up given to the recommendations adopted in 
previous  years  and  Portugal’s  progress  towards  its  national  Europe  2020  targets.  It 
also included an in-depth review under Article 5 of Regulation (EU) No 1176/2011, 
the  results  of  which  were  also  published  on  7  March  20186.  The  Commission’s 
analysis  leads  it  to  conclude  that  Portugal  is  experiencing  macroeconomic 
imbalances.  In  particular,  the  large  stocks  of  net  external  liabilities,  private  and 
public debt, and a high proportion of non-performing loans constitute vulnerabilities 
in a context of low productivity growth. A prudent current account position and the 
maintenance  of  competitiveness  gains  are  required  to  ensure  the  adjustment  of  net 
external  liabilities.  Private  debt  ratios  continue  to  decline  from  high  levels  due  to 
resumed  nominal  growth  and  slightly  negative  credit  flows,  and  the  government 
debt-to-GDP  ratio  is  projected  to  have  entered  a  downward  trend,  in  a  context  of 
persistent  deleveraging  needs.  Financial  sector  interventions  helped  to  reduce 
stability  risks,  although  banks  remain  penalised  by  low  profitability  and  a  large 
(albeit declining) stock of non-performing loans. Higher productivity growth is key 
for  improved  prospects  as  regards  competitiveness,  deleveraging  and  potential 
growth.  Unemployment  has  been  falling  fast  for  several  years.  Policy  gaps  remain, 
notably  in  terms  of  implementing  planned  measures  to  reduce  the  number  of  non-
performing  loans  and  improve  the  business  environment.  The  adoption  and 
implementation of several reform plans, including measures to tackle labour market 
segmentation  and  fiscal-structural  reforms  to  improve  the  sustainability  of  public 
finances, will need to be monitored. 

On 27 April 2018, Portugal submitted its 2018 National Reform Programme and its 
2018  Stability  Programme.  To  take  account  of  their  interlinkages,  the  two 
programmes have been assessed at the same time. The Stability Programme projects 
a solid downward path of the public debt-to-GDP ratio. Portugal’s National Reform 
Programme  includes  commitments  both  for  the  short  and  medium  term  and  covers 
the  challenges  identified  in  the  2018  country  report.  In  particular,  it  announces 
measures in the areas of qualifications and innovation, which can boost productivity 
and increase the value of Portuguese exports. The strategy presented to reduce non-
performing loans together with the action to promote firm capitalisation contribute to 
reduce  the  indebtedness  of  the  Portuguese  economy  and  clean-up  banks'  balance 
sheets.  Overall,  the  effective  implementation  of  the  submitted  programmes  would 
underpin the correction of imbalances. 

the 
Relevant  country-specific 
programming  of  the  European  Structural  and  Investment  Funds  for  the  2014-2020 
period. As foreseen in Article 23 of Regulation (EU) No 1303/2013 of the European 

recommendations  have  been  addressed 

in 

(2) 

(3) 

(4) 

(5) 

5 
6 

SWD(2018) 220 final. 
COM(2018) 120 final. 

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(6) 

(7) 

Parliament and of the Council7, where it is necessary to support the implementation 
of relevant Council recommendations, the Commission may request a Member State 
to  review  and  propose  amendments  to  its  Partnership  Agreement  and  relevant 
programmes.  The  Commission  has  provided  further  details  on  how  it  would  make 
use  of  that  provision  in  guidelines  on  the  application  of  the  measures  linking  the 
effectiveness  of  the  European  Structural  and  Investment  Funds  to  sound  economic 
governance8.  

Portugal  is  currently  in  the  preventive  arm  of  the  Stability  and  Growth  Pact  and 
subject to the transitional debt rule. In its 2018 Stability Programme, Portugal plans 
to  attain  a  headline  deficit  of  0.7 %  of  GDP  and  0.2 %  of  GDP  in  2018  and  2019, 
respectively,  and  a  further  improvement  to  a  surplus  of  1.4 %  of  GDP  by  2021. 
Those  plans  do  not  include  the  potential  deficit-increasing  impact  of  bank  support 
measures from 2019 onwards. The medium-term budgetary objective — a structural 
surplus of 0.25 % of GDP — is planned to be achieved by 2020. The 2018 Stability 
Programme projects the general government debt-to-GDP ratio to reach 122.2 % in 
2018  and  118.4 %  in  2019,  which  would  then  be  at  107.3 %  in  2021.  The 
macroeconomic  scenario  underpinning  those  budgetary  projections  is  plausible  for 
2018 but favourable for the following years. At the same time, the measures needed 
to support the planned deficit targets from 2018 onwards have not been sufficiently 
specified. 

that 

indicates 

Portugal's 2018 Stability Programme indicates that the budgetary impact of the large-
scale wildfires that occurred in 2017 was significant and provides adequate evidence 
of  the  scope  and  nature  of  these  additional  budgetary  costs.    In  particular,  the 
Stability  Programme 
the  2018  budget  comprises  exceptional 
expenditure amounting to about 0.07 % of GDP in relation to preventive measures to 
protect  the  national  territory  against  wildfires.  The  Stability  Programme  sets  out 
expenditure  related  to  the  emergency  management,  classified  as  one-offs,  and  to 
prevention. Due to the integrated nature of these expenditures and due to the direct 
link  with  the  large-scale  wildfires  of  2017,  the  specific  treatment  of  wildfire-
prevention  expenditure  could  be  considered  in  application  of  the  "unusual  event 
clause".  According  to  the  Commission,  the  eligible  additional  expenditure  in  2018 
amounts  to  0.07 %  of  GDP  for  preventive  measures.  The  provisions  set  out  in 
Articles  5(1)  and  6(3)  of  Regulation  (EC)  No  1466/97  cater  for  this  additional 
expenditure,  in  that  the  unprecedented  large-scale  wildfires  are  considered  unusual 
events,  their  impact  on  Portugal’s  public  finances  is  significant  and  sustainability 
would  not  be  compromised  by  allowing  for  a  temporary  deviation  from  the 
adjustment path towards  the medium-term budgetary objective. A final assessment, 
including on eligible amounts, will be made in spring 2019 on the basis of observed 
data for 2018 as provided by the Portuguese authorities.  

(8) 

On  11  July  2017,  the  Council  recommended  Portugal  to  ensure  that  the  nominal 
growth rate of net primary government expenditure9 does not exceed 0.1 % in 2018, 

7 

8 
9 

Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 
laying  down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social 
Fund, the  Cohesion Fund, the European Agricultural Fund for Rural Development and the European 
Maritime  and  Fisheries  Fund  and  laying  down  general  provisions  on  the  European  Regional 
Development  Fund,  the  European  Social  Fund,  the  Cohesion  Fund  and  the  European  Maritime  and 
Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320). 
COM(2014) 494 final. 
Net  primary  government  expenditure  comprises  total  government  expenditure  excluding  interest 
expenditure,  expenditure  on  Union  programmes  fully  matched  by  Union  funds  revenue  and  non-

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(9) 

(10) 

(11) 

corresponding  to  an  annual  structural  adjustment  of  at  least  0.6 %  of  GDP.  At  the 
same  time,  it  was  stated  that  the  assessment  of  the  2018  Draft  Budgetary  Plan  and 
subsequent assessment of 2018 budget outcomes will need to take due account of the 
goal  of  achieving  a  fiscal  stance  that  contributes  to  both  strengthening  the  ongoing 
recovery  and  ensuring  the  sustainability  of  public  finances.  Following  the 
Commission's  assessment  of  the  strength  of  the  recovery  in  Portugal  while  giving 
due  consideration  to  its  sustainability  challenges,  carried  out  in  the  context  of  its 
opinion  on  Portugal's  Draft  Budgetary  Plan,  no  additional  elements  in  that  regard 
need to be taken into account. Based on the Commission 2018 spring forecast, there 
is  a  risk  of  a  significant  deviation  from  that  recommended  adjustment  in  2018  and 
over 2017 and 2018 taken together.  

In 2019, in view of Portugal's general government debt ratio above 60 % of GDP and 
projected  output  gap  of  1.3 %,  the  nominal  growth  rate  of  net  primary  government 
expenditure9 should not exceed 0.7 %, in line with the structural adjustment of 0.6 % 
of  GDP  stemming  from  the  matrix  of  requirements  under  the  Stability  and  Growth 
Pact.  Under  unchanged  policies,  there  is  a  risk  of  a  significant  deviation  from  that 
requirement  in  2019  and  over  2018  and  2019  taken  together.  At  the  same  time, 
Portugal  is  forecast  to  comply  with  the  transitional  debt  rule  in  2018  and  2019. 
Overall, the Council is of the opinion that the necessary measures should be taken as 
of 2018 to comply with the provisions of the Stability and Growth Pact. The use of 
any  windfall  gains  to  further  reduce  the  general  government  debt  ratio  would  be 
prudent.    

Ensuring  public  debt  sustainability  hinges  on  sustainable  fiscal  consolidation  via  a 
structural improvement in public finances, to be achieved through stronger revenue 
collection  and  expenditure  controls.  To  enhance  expenditure  controls,  effective 
enforcement of the commitment control law, strict and timely implementation of the 
budget framework law and continued spending review and rationalisation efforts are 
key. Budgetary planning and implementation continue to be a considerable challenge 
particularly  in  the  health  sector,  where  late  payments  (arrears)  remain  very  high, 
which also points to weaknesses in accounting control and managerial practices. For 
sustainable fiscal consolidation, high and rising ageing costs should be addressed. In 
the medium term, higher ageing-related fiscal risks are expected to relate largely to 
the  costs  of  financing  pensions,  while  health-related  costs  will  increase  pressure  in 
the  long-term.  Steps  to  improve  the  medium-term  sustainability  of  the  pension 
system, together with a comprehensive strategy to tackle the health-related costs of 
ageing, would help to address these risks. 

In a similar vein, controlling expenditure, managing debt and improving the overall 
financial  sustainability  of  state-owned  enterprises  could  contribute  significantly  to 
the  structural  improvement  of  public  finances.  Although  overall  net  income 
continues  to  be  negative,  the  operational  results  of  state-owned  enterprises  have 
generally  improved  in  recent  years,  except  in  the  health  sector,  where  they  have 
worsened.  Total  non-consolidated  debt  of  public  corporations  included  in  general 
government  also  remains  high,  at  around  19.0 %  of  GDP  at  the  end  of  2017. 
Measures to improve the monitoring of state-owned enterprises are being rolled out, 
but  their  impact  remains  to  be  seen.  An  ongoing  debt  management  and 

discretionary  changes  in  unemployment  benefit  expenditure.  Nationally  financed  gross  fixed  capital 
formation  is  smoothed  over  a  4-year  period.  Discretionary  revenue  measures  or  revenue  increases 
mandated by law are factored in. One-off measures on both the revenue and expenditure sides are netted 
out. 

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(12) 

(13) 

(14) 

recapitalisation  plan  for  state-owned  enterprises  should  reduce  indebtedness  and 
lower  interest  costs,  but  good  incentives  could  be  reinforced  by  ensuring  a 
predictable and transparent framework for limited budgetary transfers. 

The  recovery  of  the  Portuguese  labour  market  continues,  in  line  with  strengthened 
economic  performance.  The  economy  added  about  150,000  jobs  in  2017  and  the 
employment rate (20-64 year olds) increased up to 73.4. % in 2017, back to pre-crisis 
levels. The unemployment rate dropped considerably and is now below the euro area 
average.  The  long-term  unemployment  rate  has  also  fallen  rapidly,  although  it 
remains  relatively  high.  Besides  ongoing  active  labour  market  policies,  exemptions 
on social security and a public employment service model of personalised support for 
job seekers, Portugal is also planning to implement one-stop shops for employment 
in  2018.  This  could  play  a  major  role  in  ensuring  wider  coverage  of  activation 
measures. Poverty and inequality indicators have also improved further. The 'at-risk-
of-poverty  or  social  exclusion'  rate  is  coming  closer  to  the  EU  average  and  the 
income  share  of  the  poorest  20 %  has  increased  since  2015.  However,  the  level  of 
income  inequality  is  still  high.  Moreover,  the  effectiveness  of  social  transfers 
(excluding  pensions)  in  lifting  people  out  of  poverty  is  low,  the  adequacy  of  the 
minimum 
limited  and  housing 
affordability is an increasing challenge for low-income households.  

income  scheme  (though 

improved)  remains 

Despite  a  significant  increase  in  the  number  of  permanent  jobs  in  2017,  the 
proportion of temporary employees remained stable at 22 %, still one of the highest 
levels in the EU. In 2017, around 82 % of temporary employees were in this situation 
involuntarily.  While  more  people  are  moving  from  temporary  to  permanent  jobs, 
temporary  contracts  remain  the  norm  for  unemployed  people  finding  a  job. 
Moreover,  the  (already  wide)  wage  gap  between  temporary  and  permanent 
employees  grew  during  the  crisis.  Measures  to  promote  the  creation  of  permanent 
jobs (e.g. Contrato-Emprego) and exemptions from social contributions in return for 
recruiting  people  belonging  to  vulnerable  groups  proved  effective  but  had  limited 
coverage. Some aspects of employment protection legislation and cumbersome court 
procedures  may  still  discourage  recruitment  on  open-ended  contracts.  However,  no 
action  is  currently  planned  to  review  the  legal  framework  for  dismissals.  The 
government  is  planning  measures  to  address  labour  market  segmentation  through 
tripartite discussion with social partners.  

The overall skills level of the adult population remains among the lowest in Europe, 
hampering  the  country’s  innovation  potential  and  competitiveness.  This  includes 
digital  skills:  in  2017,  only  50 %  of  citizens  aged  16-74  possessed  basic  or  above 
basic digital skills (against an EU average of 57 %). Programmes are being rolled out 
in  this  regard  (notably  Qualifica  and  the  national  digital  competences  initiative 
Incode 2030), but their effectiveness in upgrading workers’ basic (numeracy, literacy 
and  digital)  skills  and  ultimately  raising  productivity  will  depend  on  the  coverage 
and  quality  of  the  training  offered,  going  beyond  the  mere  recognition  of  skills. 
While  evidence  suggests  that  recent  minimum  wage  increases  (amounting  to  a 
cumulative rise of 18.3 % since 2014) have not harmed the employment rate among 
low-skilled workers, the substantial rise in the number of employees covered, up to 
20.4 %  in  the  third  quarter  of  2017,  resulted  in  increasing  wage  compression.  This 
threatens to reduce the skills wage premium, in particular between low- and medium-
skilled  workers,  thus  lowering  incentives  for  the  low  skilled  to  invest  in  education 
and  training.  The  government  is  closely  monitoring  minimum  wage  developments 
together with social partners. 

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(15) 

(16) 

(17) 

(18) 

(19) 

Early  school  leaving  remains  higher  than  the  EU  average,  but  it  is  on  a  long-term 
downward  trend,  partly  thanks  to  measures  being  implemented  to  encourage 
educational  success  and  reduce  drop-out  rates.  Educational  outcomes  continue  to 
improve,  but  there  are  equity  concerns  as  proportions  of  low  achievers  differ 
significantly between the bottom and the top socioeconomic quartiles. Attainment in 
tertiary education (age 30-34) decreased from 34.6 % in 2016 to 33.9 % in 2017, far 
below the national target of 40 % by 2020. Despite the high employability of science, 
engineering, technology, and  mathematics graduates,  there is  low student uptake in 
these fields. 

Despite the positive developments in the Portuguese Research & Innovation system 
in  the  last  years,  notably  in  terms  of  quantity  and  quality  of  human  resources  and 
scientific production, overall significant bottlenecks remain in creating a culture and 
the  enabling  conditions  for  stronger  academia-business  cooperation.  These  include 
barriers to knowledge and technology transfer, commercialisation of research outputs 
as  well  as  research  career  tracks  that  do  not  sufficiently  incentivise  researchers  to 
explore  the  avenues  of  “entrepreneurial  research"  and  the  opportunities  for 
collaboration with industry.  Further raising the awareness and clarity of intellectual 
property  in  the  relation  between  academia  and  business  could  contribute  to  reduce 
the  time  of  execution  of  contractual  objectives,  the  economic  monetization  of 
scientific knowledge as well as their economic potential. 

A  comprehensive  strategy  for  a  faster  reduction  of  non-performing  assets  is  being 
implemented. This helped to reduce the ratio of non-performing loans from 17.2 % 
of gross  loans at the end of 2016 to 14.6 %  in the third quarter of 2017. Corporate 
non-performing loans are a particular concern, as they account for about two-thirds 
of  the  total  stock  of  non-performing  loans;  the  ratio  of  corporate  non-performing 
loans remains high, at 26.6 % of gross loans. Resolving bad assets is key to freeing 
up credit supply for new investments and sustainable growth. However, procedures 
for  insolvent  firms  and  thin  secondary  markets  for  bad  assets  remain  significant 
impediments  to  reducing  the  ratio  of  non-performing  loans.  Although  capital 
increases, together with the ongoing efforts to reduce costs, are improving financial 
sector  prospects,  profitability  remains  low,  exposure  to  sovereign  debt  high  and 
capital buffers weak. 

Access to finance and capital remains a major challenge for the Portuguese economy. 
Obtaining stable access to finance, and in particular to equity capital, is considered to 
be one of the major challenges for Portuguese enterprises, further exacerbated by the 
deleveraging  pressures.  In  relative  terms,  alternative  sources  of  finances  remain  of 
little  relevance.  In  recent  years,  new  programmes  and  credit  lines  have  been 
launched, along with further simplifications in the business environment, but there is 
still  room  for  improvement.  At  the  same  time,  though  decreasing,  non-performing 
loans and corporate debt remain high and improvements in the allocation of capital 
towards more productive firms would be beneficial for the investment environment.  

Despite  progress  in  introducing  administrative  simplification  for  cross-cutting 
matters  impacting  the  daily  lives  of  citizens  and  businesses,  sector-specific 
regulatory  and  administrative  barriers  still  impede  investment  and  an  efficient 
allocation of resources. A revamp of procedural workflows by shortening deadlines 
for  decision-making,  derogating  from  the  tacit  approval  principle  in  very  limited 
cases only and replacing authorisation schemes requiring the submission of multiple 
documents  by  'responsible  declarations'  are  much  needed  sector-specific  reforms  in 
this regard. Administrative charges in the construction sector should be brought into 

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proportion  with  actual  costs.  Competition  in  public  procurement  remains  limited. 
The revised public procurement code aims to promote transparency, competition and 
better management of public contracts. The implementation of the new rules should 
be monitored, including the impact of the stricter rules on the use of direct awards. 
Even  though  the  Portuguese  justice  system  continues  to  improve  its  efficiency,  the 
length  of  proceedings  in  administrative  courts  remains  a  challenge.  Moreover, 
corruption  and  lack  of  transparency  are  still  perceived  by  businesses  as  areas  of 
concern.  While progress has  continued as  regards prosecuting corruption, efforts to 
improve the culture of integrity in public institutions have not so far shown sufficient 
results.  

Regulatory  reforms  have  been  scarce  since  the  financial  assistance  programme, 
halting or at times  even reversing  reforms agreed in  that context.  Corporate  groups 
are banned from providing several professional services. By-laws regulating certain 
professional  business  services,  notably  legal  services,  are  less  ambitious  than  the 
framework law in decisive respects, such as legal form, shareholding, management, 
advertising  and  multidisciplinary  practices.  A  reform  of  the  authorisation  and 
registration of construction service providers has been scarcely complemented by an 
easing of controls for installation services and building controls. 

In  the  context  of  the  2018  European  Semester,  the  Commission  has  carried  out  a 
comprehensive analysis of Portugal’s economic policy and published it in the 2018 
country  report.  It  has  also  assessed  the  2018  Stability  Programme  and  the  2018 
National  Reform  Programme  and  the  follow-up  given  to  the  recommendations 
addressed to Portugal in previous years. The Commission has taken into account not 
only their relevance for sustainable fiscal and socioeconomic policy in Portugal but 
also the extent to which they comply with Union rules and guidance, given the need 
to  strengthen  the  Union’s  overall  economic  governance  by  providing  Union-level 
input for future national decisions.  

In  the  light  of  this  assessment,  the  Council  has  examined  the  2018  Stability 
Programme and its opinion10 is reflected in particular in recommendation 1 below. 

In  the  light  of  the  Commission’s  in-depth  review  and  this  assessment,  the  Council 
has  examined  the  National  Reform  Programme  and  the  Stability  Programme.  Its 
recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in 
recommendations 1 to 3 below, 

(20) 

(21) 

(22) 

(23) 

HEREBY RECOMMENDS that Portugal take action in 2018 and 2019 to: 

1. 

2. 

Ensure that the nominal growth rate of net primary government expenditure does not 
exceed 0.7 % in 2019, corresponding to an annual structural adjustment of 0.6 % of 
GDP. Use windfall gains to accelerate the reduction of the general government debt 
ratio.  Strengthen  expenditure  control,  cost  effectiveness  and adequate  budgeting,  in 
particular  in  the  health  sector  with  a  focus  on  the  reduction  of  arrears  in  hospitals. 
Improve  the  financial  sustainability  of  state-owned  enterprises,  in  particular  by 
increasing their overall net income and by reducing debt. 

Promote an environment conducive to hiring on open-ended contracts, including by 
reviewing the legal framework in consultation with social partners. Increase the skills 
level  of  the  adult  population,  including  digital  literacy,  by  strengthening  and 
in  adult  qualification 
broadening 

training  component 

the  coverage  of 

the 

10 

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

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3. 

programmes.  Improve  higher  education  uptake,  namely  in  science  and  technology 
fields. 

Increase  the  efficiency  of  insolvency  and  recovery  proceedings  and  reduce 
impediments  to  the  secondary  market  for  non-performing  loans.  Improve  access  to 
finance  for  businesses.  Reduce  the  administrative  burden  by  shortening  procedural 
deadlines,  using  more 
reducing  document  submission 
requirements.  Remove  persistent  regulatory  restrictions  by  ensuring  a  proper 
implementation of the framework law for highly regulated professions. Increase the 
efficiency  of  administrative  courts,  inter  alia  by  decreasing  the  length  of 
proceedings. 

tacit  approval  and 

Done at Brussels, 

For the Council 
The President 

EN 

8 

  EN