Recommendation for a COUNCIL RECOMMENDATION on the 2019 National Reform Programme of Cyprus and delivering a Council opinion on the 2019 Stability Programme of Cyprus
Date: 2019-06-05
Institutions: European Commission, Secretariat-General
Subjects: Cyprus, corruption, economic policy, economic reform, energy policy, euro area, fiscal policy, public administration, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 5.6.2019  COM(2019) 513 final  Recommendation for a COUNCIL RECOMMENDATION on the 2019 National Reform Programme of Cyprus and delivering a Council opinion on the 2019 Stability Programme of Cyprus    
 
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2019 National Reform Programme of Cyprus and delivering a Council opinion on 
the 2019 Stability Programme of Cyprus 

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 Commission, 

Having regard to the resolutions of the European Parliament, 

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 21 November 2018, the Commission adopted the Annual Growth Survey, marking 
the start of the 2019 European Semester for 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  21  March 
2019.  On  21  November  2018,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the 
Commission also adopted the Alert Mechanism Report, in which it identified Cyprus 
as one of the Member States for which an in-depth review would be carried out. On 
the  same  date,  the  Commission  also  adopted  a  recommendation  for  a  Council 
recommendation on the economic policy of the euro area, which was endorsed by the 
European  Council  on  21  March  2019.  On  9  April  2019,  the  Council  adopted  the 

1 
2 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 

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(2) 

(3) 

(4) 

(5) 

recommendation  on  the  economic  policy  of  the  euro  area  (‘Recommendation  for  the 
euro area’).  

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,  Cyprus  should  ensure 
the  full  and  timely  implementation  of  the  Recommendation  for  the  euro  area,  as 
reflected in recommendations (1) to (5) below. In particular, measures to decrease the 
administrative burden will help address the first euro area recommendation as regards 
the  business  environment  and  productivity  improvements  for  euro  area  rebalancing, 
focusing economic policy related to investment in the specified areas will help address 
the second euro area recommendation as regards supporting investment, tax measures 
and measures to improve skills will help address the third euro area recommendation 
as regards fight against Aggressive Tax Planning and functioning of the labour market, 
and measures to improve the functioning of the asset management company will help 
address  the  fourth  euro  area  recommendation  as  regards  the  reduction  of  non-
performing loans. 
The 2019 country report for Cyprus3 was published on 27 February 2019. It assessed 
Cyprus’s progress in addressing the country-specific recommendations adopted by the 
Council  on  13  July  2018,  the  follow-up  given  to  the  recommendations  adopted  in 
previous years and Cyprus'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  27  February  20194.  The  Commission’s 
analysis  led  it  to  conclude  that  Cyprus  is  experiencing  excessive  macroeconomic 
imbalances. In particular, it is essential that the Member State tackles the high stocks 
of private, public and external debt and non-performing loans. 

On 15 April 2019, Cyprus submitted its 2019 National Reform Programme and, on 30 
April  2019,  its  2019  Stability  Programme.  In  order  to  take  account  of  their 
interlinkages, the two programmes have been assessed at the same time. 

Relevant country-specific recommendations have been addressed in the programming 
of  the  European  Structural  and  Investment  Funds  ('ESI  Funds')  for  the  2014-2020 
period.  As  provided  for  in  Article  23  of  Regulation  (EU)  No  1303/2013  of  the 
European  Parliament  and  of  the  Council5,  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 ESI Funds to sound economic governance6. 

(6) 

Cyprus is currently in the preventive arm of the Stability and Growth Pact. In its 2019 
Stability  Programme,  the  general  government  balance,  which  turned  into  a  deficit  of 
4.8% of GDP in 2018 and thereby exceeded the Treaty reference value of 3% of GDP, 
is  projected to  reach a surplus  in  nominal terms  of 3.0% of GDP in  2019 and above 

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5 

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SWD(2019) 1012 final. 
COM(2019) 150 final. 
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. 

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2.0%  of  GDP  over  the  programme  period.  Based  on  the  recalculated  structural 
balance7, the medium-term budgetary objective, set at a balanced budgetary position in 
structural  terms,  is  planned to  be reached over 2019-2022. After having  increased to 
around  102.5%  of  GDP  in  2018,  the  general  government  debt-to-GDP  ratio  is 
expected to decrease to  95.7% in 2019 and to continue to steadily decline thereafter, 
reaching  77.5%  by  2022,  according  to  the  2019  Stability  Programme.  The 
macroeconomic  scenario  underpinning  those  budgetary  projections  is  plausible.  The 
risks associated with the macroeconomic and budgetary assumptions presented in the 
to  external 
Stability  Programme  are 
developments,  as  well  as  the  potential  fiscal  impact  of  Court  rulings  on  past  fiscal 
reforms  and  the  financing  needs  of  public  hospitals  during  the  first  years  of  the 
national  health  system.  The  Commission  2019  spring  forecast  projects  the  general 
government balance to register a surplus of 3.0% of GDP in 2019 and 2.8% of GDP in 
2020. Based on the Commission 2019 spring forecast the structural balance is forecast 
to stand at 1.1% of GDP in 2019 and at 0.7% of GDP in 2020, remaining above the 
medium-term budgetary objective. Cyprus is forecast to comply with the debt rule in 
2019  and  2020.  Overall,  the  Council  is  of  the  opinion  that  Cyprus  is  projected  to 
comply with the provisions of the Stability and Growth Pact in 2019 and 2020.  

the  downside,  mainly 

linked 

tilted 

to 

(7) 

(8) 

On 5 June 2019, the Commission issued a report prepared in accordance with Article 
126(3) of the TFEU as based on notified data the headline deficit was in breach of the 
3%  of  GDP  Treaty  reference  value  in  2018.  The  report  concluded  that  further  steps 
leading  to  a  decision  on  the  existence  of  an  excessive  deficit  should  not  be  taken. 
Inefficiencies in the public administration and local  governments  remain  a challenge 
despite some progress with e-government services. This has an impact on the business 
environment.  Key  legislative  proposals  to  address  the  issue  remain  pending.  These 
include draft laws on the reform of the public administration and of local governments. 
Shortcomings  in  the  governance  framework  for  state-owned  entities  might  facilitate 
the  build-up  of  public  contingent  liabilities  and  hinder  investment  capacity  in  key 
utilities, such as telecoms and energy. The containment of the public-sector wage bill, 
which  has  been  a  significant  factor  in  fiscal  consolidation  in  Cyprus,  warrants 
continuation.  

The  fight  against  aggressive  tax  planning  is  essential  to  make  tax  systems  more 
efficient  and  fair  as  acknowledged  in  the  2019  euro  area  recommendation.  Spillover 
effects of taxpayers' aggressive tax planning strategies between Member States call for 
a  coordinated  action  of  national  policies  to  complement  EU  legislation.  Cyprus  has 
taken  measures  against  aggressive  tax  planning,  but  the  high  levels  of  dividend  and 
interest  payments  (relative  to  GDP)  suggests  that  Cyprus'  tax  rules  are  used  by 
companies that engage in aggressive tax planning. The  absence of withholding taxes 
on outbound (i.e. from EU residents to third country residents) dividend, interest and, 
in many cases, royalty payments by Cyprus-based companies to third country residents 
may lead to those payments escaping tax altogether, if they are also not subject to tax 
in the recipient jurisdiction. The absence of such taxes, together with the corporate tax 
residency  rules,  may  continue  to  facilitate  aggressive  tax  planning.  The  Notional 
Interest  Deduction  scheme  needs  to  be  closely  monitored  to  prevent  any  misuse  for 
aggressive tax planning. Finally, the Scheme for Naturalisation of Investors in Cyprus 
by Exception and Residence by Investment Scheme give access to a low personal tax 
rate on income from foreign financial assets and do not require an individual to spend 

7 

Cyclically-adjusted  balance  net  of  one-off  and  temporary  measures,  recalculated  by  the  Commission 
using the commonly agreed methodology. 

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(9) 

a significant  amount of time in  the jurisdiction  offering the scheme. They  have been 
listed by the OECD as having a potentially high risk for being misused to circumvent 
the automatic exchange of financial accounts. 

Important  measures  were  implemented  in  the  context  of  a  comprehensive  non-
performing loans strategy. This led to a marked reduction in non-performing loans in 
the banking sector, mainly due to the sale and wind-down of the Cyprus Cooperative 
Bank  and  the  transfer  of  its  non-performing  loans  portfolio  to  a  state-owned  asset 
management company. Furthermore, the law on the sale of loans was improved and a 
law on the securitisation of loans was adopted. In order to maximise the proceeds from 
the sale of assets and ultimately help reduce private debt, it is essential for the State-
owned asset management company to have an effective governance structure, a highly 
specialised management, operational  independence from  the Cypriot State, and well-
defined targets in line with the commitments made by the government in the context of 
the  State  aid  decision  on  the  sale  of  the  Cyprus  Cooperative  Bank,  which  was 
approved  by  the  European  Commission.  Furthermore,  it  is  important  to  set  up  an 
adequate supervisory framework for the credit-acquiring companies as the number of 
credit-acquiring  companies  has 
the  State-owned  asset 
increased, 
management company, and more non-performing loans portfolio sales are planned in 
the future. The governance and administrative capacity of insurance and pension fund 
supervisors  remains  weak.  The  integration  of  these  supervisors  should  be  swiftly 
finalised. More generally, the supervisory framework for the capital markets has to be 
strengthened,  given  the  relatively  sizeable  cross-border  activities  of  the  non-bank 
financial  services  companies  and  the  exponential  growth  of  licensed  firms  in  recent 
years. 

including 

(10)  Employment  is  rising,  unemployment  is  falling  and  the  public  employment  services 
short-term  capacity  to  facilitate  active  support  to  employment  has  been  improved. 
However, the long-term  sustainability of public employment services capacity is still 
an issue, as the additional staff was recruited for only 2 years. In 2018 the proportion 
of  young people not  in  education, employment  or training  was among the highest  in 
the EU. The low efficiency of the public employment services and their limited rollout 
and  participation  in  activation  for  helping  people  find  work  remain  a  challenge. 
Therefore, there is scope for reinforcing the outreach and activation support for access 
to  employment,  in  particular  for  young  people  and  the  long-term  unemployed.  This 
includes promoting self-employment  and the social economy as well as  modernising 
labour  market  institutions  and  services  to  help  people  gain  skills  that  better  match 
labour market needs. 

(11)  Skills shortages and mismatches are among the main obstacles to business investment, 
highlighting  the  need  to  invest  more  in  training  of  unused  and  under-used  labour 
potential, better aligning education curricula to labour market needs, and investing in 
matching  vocational  education  infrastructure.  Progress  on  crucial  education  and 
training  reforms,  such  as  improving  the  appointments  and  evaluation  of  teachers,  is 
uneven. Educational achievements remain low as does participation in early childhood 
education and care which has become less affordable for households as their income 
during  the  crisis  fell  at  a  faster  rate  than  childcare  costs.  Continuing  efforts  to 
modernise  the  education  and  training  system  at  all  levels  will  help  to  improve 
educational  outcomes  and  increase  the  potential  for  sustainable  growth  in  Cyprus. 
Revising the vocational and training curricula is a promising step in reducing the skills 
mismatches  in  the  labour  market.  However,  prevalent  skills  mismatches  for  tertiary 

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graduates  and  low  participation  in  adult  learning,  especially  of  the  low  qualified, 
indicate the need for enhanced upskilling and reskilling measures. 

(12)  Cyprus has made progress on healthcare by adopting legislation to  establish the new 
National Health System. The new system seeks to improve access, introduce universal 
health  coverage,  reduce  the  high  level  of  out-of-pocket  payments  and  increase  the 
efficiency  of  care  delivery  in  the  public  sector.  Before  the  system  becomes  fully 
functional in 2020, there are major implementation challenges and investment needs. 
Preserving long-term sustainability of the system, including ensuring the financial and 
operational autonomy of public hospitals, as planned, remains crucial. Measures aimed 
at  modernising  and  improving  the  efficiency  of  healthcare  providers,  including 
primary  healthcare,  introducing  e-Health  and  setting  up  a  National  Medicines 
Organisation  would  further  strengthen  the  healthcare  system.  The  level  of  long-term 
care is low and remains a challenge given the ageing population. 

(13)  Cyprus's  weak  environmental  performance  is  a  major  concern  and  it  remains 
vulnerable  to  climate  change.  Cyprus  needs  to  significantly  improve  its  waste 
management system and the circular economy. Waste generation remains significantly 
higher than the Union average and has increased since 2014. The current facilities for 
waste  treatment  do  not  achieve  high  recycling  rates  and  the  lack  of  economic 
instruments  such  as  landfill  taxes  makes  recycling  economically  unattractive.  Water 
management, notably in urban areas, is characterised by inefficiencies. Water scarcity, 
in  combination  with  over-abstraction  of  groundwater,  is  the  main  challenge  for 
Cyprus. On urban wastewater, there is a considerable amount of wastewater that is still 
discharged without collection or treatment – only around half of the total waste water 
undergoes  secondary  treatment.  Droughts  and  water  scarcity  are  major  concerns  and 
an  insufficient  policy  response  might  affect  the  Member  State’s  rural  economy  and 
tourism.  Therefore,  sustainable  management  and  an  efficient  use  of  its  natural 
resources, along with stricter enforcement of environment and climate legislation, are 
essential for Cyprus to mitigate adverse climate change effects, preserve and restore its 
natural environment and ensure sustainable economic growth in the long term. 

(14)  Cyprus can make much better use of its renewable energy sources – particularly solar 
– and address current energy inefficiencies. The renewable energy share in Cyprus was 
8.9% in 2017, with the 2020 target being 13%. Residential and commercial buildings 
constructed with no or low levels of thermal protection, particularly in urban settings, 
are a substantial source of energy inefficiency. Framework conditions for investing in 
the  renewable  energy  sector  have  improved,  and  several  measures  have  been 
introduced,  including  installations  of  photovoltaic  systems  and  grant  schemes  for 
small  and  medium-sized  enterprises  and  households.  However,  Cyprus  has  not  yet 
taken  full  advantage  of  its  considerable  potential  in  renewable  energy  generation 
notably from solar sources. The reliance on roads for inland transport creates a number 
of policy challenges, most notably the struggle to reduce air pollution and greenhouse 
gas  emissions,  and  also  leads  to  severe  congestion  in  urban  areas  during  peak  hours 
and  on  roads  to  and  from  ports.  With  a  2.7%  share  in  2016,  Cyprus  is  also  lagging 
behind in the use of renewable energy sources in transport and may have difficulties 
reaching the binding 10% target by 2020. 

(15) 

Investing in  the digital  economy and in  improving workers’ digital  skills  is  essential 
for  bolstering  productivity.  Cyprus  ranks  in  the  low  end  in  the  European 
Commission’s  Digital  Economy  and  Society  Index  (DESI)  2019.  Only  50%  of 
Cypriots  between  16  and  74  years  have  basic  digital  skills  and  ICT  specialists  still 
represent  a  lower  proportion  of  the  workforce  compared  to  the  EU  (2.3%  vs  3.7%), 

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hampering  the  potential  of  the  digital  economy.  There  is  a  low  level  of  online 
interaction  between  public  authorities  and  citizens,  with  only  50%  of  Cypriots 
interacting online. E-commerce is improving but it is still below the Union average.  

(16)  Cyprus  remains  a  moderate  innovator,  with  innovation  performance  having  declined 
since 2010. Public and private research and development expenditure levels are among 
the  lowest  in  the  Union,  thus  hindering  the  capacity  of  the  research  centres  and  the 
business sector to innovate. The interaction between academia and businesses is also 
very  limited.  Increasing  the  capacity  of  the  business  sector  to  innovate  and  boosting 
access  to  finance  and  investments  that  focus  on  well-defined  areas  of  smart 
specialisation  are  crucial  to  improve  Cyprus’s  competitiveness  and  that  of  its  small 
and medium-sized enterprises in particular. 

(17)  The administrative burden is high, especially for initiating strategic investments. There 
is  scope  to  significantly  simplify  the  procedures  for  obtaining  permits  for  strategic 
investments, and the relevant legislation is still pending. 

(18) 

Implementation  of  the  action  plan  for  growth  has  led  to  some  progress  in 
entrepreneurship  and  access  to  finance  for  small  and  medium-sized  enterprises. 
However, financial support measures for small and medium-sized enterprises are still 
based mainly on grants. Alternative sources of finance such as venture capital, equity 
funding  and  crowdfunding  remain  marginal  for  Cypriot  businesses.  Better  co-
ordination  of  business  support  could  improve  uptake.  Privatisation  efforts  to  attract 
productivity-enhancing foreign investments are in many cases on hold, and only a few 
privatisation projects are gradually advancing. 

(19)  Persisting inefficiencies in the justice system continue to affect contract enforcement 
and prevent the swift resolution of civil and commercial cases and the investigation of 
serious crimes. Cumbersome and outdated civil procedure rules and weak enforcement 
of  court  decisions  weigh  on  banks’  incentives  to  use  the  insolvency  and  foreclosure 
frameworks  to  reduce  their  stock  of  non-performing  loans.  A  series  of  reforms  have 
started  to  address  the  most  critical  problems  in  the  justice  system,  in  particular  the 
outdated civil procedures rules, the low specialisation and digitalisation of courts, the 
clearance of the large backlog of cases and the lack of lifelong training for judges, but 
progress remains slow. The reform should be in line with the commitments undertaken 
by the  government  in  the context  of the State aid  decision on the sale of the Cyprus 
Cooperative  Bank,  which  was  approved  by  the  European  Commission.  Improved 
insolvency  and 
in  2018.  Decisive 
implementation of the new laws together with ensuring an efficient judicial system and 
stricter enforcement of judgements should help improve the debt repayment discipline. 
A  national  anti-corruption  strategy  is  in  place  since  December  2017  and  has  been 
reinforced  by  the  approval  of  a  national  horizontal  action  plan  against  corruption  by 
the  Council  of  Ministers  in  May  2019.  Draft  laws  for  the  establishment  of  a  new 
independent  anti-corruption  agency  and  whistle-blower  protection  have  been 
submitted  to  the  parliament  but  are  yet  to  be  adopted.  These  laws  would  help  to 
strengthen the national anti-corruption framework. The anti-corruption reforms should 
be  accelerated  through  the  swift  implementation  of  the  anti-corruption  Action  Plan. 
The  independence  of  the  prosecution  has  to  be  safeguarded  and  the  capacity  of  law 
enforcement should be strengthened. 

frameworks  were  adopted 

foreclosure 

(20)  Despite some efforts to reduce the backlog in the issuance of title deeds, the backlog 
remains  high.  A  structural  solution  to  address  the  inadequacies  of  the  property 

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transaction system (i.e. the issuance and transfer of title deeds) is still lacking. This is 
essential to facilitate foreclosure procedures and enable liquidation of collaterals. 

(21)  The programming of EU Funds for the period 2021-2027 could help address some of 
the  gaps  identified  in  the  recommendations,  in  particular  in  the  areas  covered  by 
Annex  D  to  the  country  report8.  This  would  allow  Cyprus  to  make  the  best  use  of 
those  funds  in  respect  of  the  identified  sectors,  taking  into  account  territorial 
disparities. Strengthening the country’s administrative capacity for the management of 
these funds is an important factor for the success of this investment. 

(22) 

(23) 

(24) 

In  the  context  of  the  2019  European  Semester,  the  Commission  has  carried  out  a 
comprehensive  analysis  of  Cyprus’s  economic  policy  and  published  it  in  the  2019 
country  report.  It  has  also  assessed  the  2019  Stability  Programme  and  the  2019 
National  Reform  Programme  and  the  follow-up  given  to  the  recommendations 
addressed  to  Cyprus  in  previous  years.  It  has  taken  into  account  not  only  their 
relevance  for  sustainable  fiscal  and  socioeconomic  policy  in  Cyprus,  but  also  their 
compliance with Union rules and guidance, given the need to strengthen the Union’s 
overall  economic  governance  by  providing  Union-level  input  into  future  national 
decisions.  

In  the  light  of  this  assessment,  the  Council  has  examined  the  2019  Stability 
Programme and is of the opinion9 that […]. 

In the light of the Commission’s in-depth review and this assessment, the Council has 
examined  the  2019  National  Reform  Programme  and  the  2019  Stability  Programme. 
Its recommendations under Article 6 of Regulation (EU) No 1176/2011  are reflected 
in  recommendations  (1)  to  (5)  below.  Those  recommendations  also  contribute  to  the 
implementation of the Recommendation for the euro area, in particular the first, third 
and 
in 
the  fourth  euro  area  recommendations.  Fiscal  policies  referred 
recommendation  (1)  contribute  inter-alia  to  address  imbalances  linked  to  high 
government debt. 

to 

HEREBY RECOMMENDS that Cyprus take action in 2019 and 2020 to:  

1. 

2. 

3. 

Adopt key legislative reforms to improve efficiency in the public sector, in particular 
as regards the functioning of the public administration and the governance of state-
owned entities and local governments.  Address  features of the tax system  that may 
facilitate aggressive tax planning by individuals and multinationals, in particular by 
means of outbound payments. 

Facilitate the reduction of non-performing loans including by setting up an effective 
governance structure of the State-owned asset management company, taking steps to 
improve payment discipline and strengthening the supervision of the credit acquiring 
companies.  Strengthen  the  supervision  capacities  in  the  non-bank  financial  sector, 
including by fully integrating the insurance and pension funds supervisors. 

Complete  reforms  aimed  at  increasing  the  effectiveness  of  the  public  employment 
services and reinforce outreach and activation support for young people. Deliver on 
the  reform  of  the  education  and  training  system,  including  teacher  evaluation,  and 
increase  employers'  engagement  and  learners'  participation  in  vocational  education 
and training, and affordable childhood education and care. Take measures to ensure 

8 
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SWD(2019) 1012 final. 
Under Article 5(2) of Regulation (EC) No 1466/97. 

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4. 

5. 

that  the  National  Health  System  becomes  operational  in  2020,  as  planned,  while 
preserving its long-term sustainability. 

Focus investment-related economic policy on sustainable transport, environment, in 
particular  waste  and  water  management,  energy  efficiency  and  renewable  energy, 
digitalisation,  including  digital  skills,  and  research  and  innovation,  taking  into 
account territorial disparities within the Member State. Adopt legislation to simplify 
the  procedures  for  strategic  investors  to  obtain  necessary  permits  and  licences. 
Improve  access  to  finance  for  small  and  medium-sized  enterprises,  and  resume  the 
implementation of privatisation projects. 

Step  up  efforts  to  improve  the  efficiency  of  the  judicial  system,  including  the 
functioning  of  administrative  justice  and  revising  civil  procedures,  increasing  the 
specialisation of courts and setting up an operational e-justice system. Take measures 
to strengthen the legal enforcement of claims and ensure reliable and swift systems 
for the issuance and transfer of title deeds and immovable property rights. Accelerate 
anti-corruption  reforms,  safeguard  the  independence  of  the  prosecution  and 
strengthen the capacity of the law enforcement.  

Done at Brussels, 

For the Council 
The President 

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