Recommendation for a COUNCIL RECOMMENDATION on the 2019 National Reform Programme of Spain and delivering a Council opinion on the 2019 Stability Programme of Spain
Date: 2019-06-05
Institutions: European Commission, Secretariat-General
Subjects: Spain, economic policy, economic reform, education policy, employment policy, investment, pension scheme, public expenditure, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 5.6.2019  COM(2019) 509 final  Recommendation for a COUNCIL RECOMMENDATION on the 2019 National Reform Programme of Spain and delivering a Council opinion on the 2019 Stability Programme of Spain    
 
 
Recommendation for a 

COUNCIL RECOMMENDATION 

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

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 Spain 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 

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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, Spain should ensure the 
full and timely implementation of the Recommendation for the euro area, as reflected 
in recommendations (1) to (4) below. In particular, measures to improve productivity 
will  help  address  the  first  euro  area  recommendation  as  regards  productivity 
improvements  for  euro  area  rebalancing,  using  windfall  gains  to  reduce  public  debt 
and  focusing  economic  policy  related  to  investment  in  the  specified  areas  will  help 
address  the  second  euro  area  recommendation  as  regards  rebuilding  buffers  and 
supporting  investment,  and  measures  to  improve  skills  and  employability  will  help 
address  the  third  euro  area  recommendation  as  regards  the  functioning  of  the  labour 
market. 
The  2019  country  report  for  Spain3  was  published  on  27  February  2019.  It  assessed 
Spain’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  Spain'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  Spain  is  experiencing  macroeconomic  imbalances.  A 
large  stock  of  internal  and  external  debt,  both  public  and  private,  and  high 
unemployment,  in  the  context  of  weak  productivity  growth,  are  still  vulnerabilities 
with a cross-border relevance. The reduction of private sector debt is progressing, but 
deleveraging  needs  remain  sizeable.  Despite  continued  robust  GDP  growth,  the 
government  debt  as  a  share  of  GDP  remains  high.  The  unemployment  rate  has 
continued  its  rapid  decline,  but  remains  very  high  and  the  high  degree  of  labour 
market  segmentation  between  temporary  and  open-ended  contracts  impedes  faster 
labour productivity growth. After a strong reform momentum between 2012 and 2015, 
an  evolving  political  context  over  the  past  year  has  contributed  to  another  year  of 
limited progress in implementing recommendations. The present favourable economic 
situation  provides  a  window  of  opportunity  to  address  pending  reform  needs  with  a 
view  to  making  the  Spanish  economy  more  resilient  and  raising  its  productivity 
growth. 

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

The  2019  Stability  Programme  reports  on  actions  taken  to  implement  the  preventive 
and corrective tools set out in Spain’s Stability Law. However, it does not set out plans 
to  make  the  enforcement  of  these  tools  automatic  and  to  review  the  Stability  Law’s 
expenditure rule, with a view to strengthening its contribution to fiscal consolidation, 
especially during economic upturns. In the area of public procurement, to improve the 
efficiency  of  public  spending  as  well  as  help  prevent  irregularities,  the  ambitious 
implementation  of  the  Law  on  public  sector  contracts  adopted  in  2017  will  be 
instrumental. In particular, it is important that the new governing structure, notably the 
Independent Office for Regulation and Supervision, can effectively perform the tasks 
allocated  to  it,  and  that  the  comprehensive  National  Public  Procurement  Strategy  be 

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SWD(2019) 1008 final. 
COM(2019) 150 final. 

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(6) 

(7) 

(8) 

(9) 

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swiftly adopted - with the active involvement of contracting authorities and entities at 
national,  regional and local  levels.  Finally,  a number of spending reviews are due in 
2019  and  the  implementation  of  the  recommendations  stemming  from  them  should 
help increase the efficiency of public spending. 

Relevant country-specific recommendations have been addressed in the programming 
of  the  European  Structural  and  Investment  Funds  ('ESI  Funds')  for  2014-2020.  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.  

Following  the  timely  and  durable  correction  of  the  excessive  deficit  and  Council 
Decision  (EU)  [2019/X]  to  abrogate  the  excessive  deficit  procedure,  Spain  is  in  the 
preventive  arm  of  the  Stability  and  Growth  Pact  and  subject  to  the  transitional  debt 
rule.  It  projects  the  general  government  balance  to  increase  from  -2.5%  of  GDP  in 
2018 to -2.0% of GDP in 2019 and to reach a balanced budget in 2022. Based on the 
recalculated  structural  balance7,  the  medium-term  budgetary  objective  of  a  balanced 
budgetary  position  in  structural  terms  is  not  planned  to  be  achieved  over  the  time 
horizon  of  the  Programme.  According  to  the  Stability  Programme,  the  general 
government debt-to-GDP ratio is expected to decrease from 97.1% in 2018 to 95.8% 
in  2019,  before  reaching  88.7%  in  2022.  The  macroeconomic  scenario  underpinning 
those budgetary projections is plausible. Risks to the achievement of the fiscal targets 
set  in  the  2019  Stability  Programme  mostly  pertain  to  the  revenue  side,  where 
uncertainty about the yield or chances of adoption of many of the revenue measures is 
large. 

On 13 July 2018, the Council recommended Spain to ensure that the nominal growth 
rate  of  net  primary  government  expenditure8  does  not  exceed  0.6%  in  2019, 
corresponding  to  an  annual  structural  adjustment  of  0.65%  of  GDP.  Based  on  the 
Commission  2019  spring  forecast,  there  is  a  risk  of  a  significant  deviation  from  the 
recommended adjustment path towards the medium-term budgetary objective in 2019.  

In 2020, in view of Spain's general government debt-to-GDP ratio, which is above the 
Treaty reference value of 60% of GDP, and projected positive output gap of 2.0% of 
GDP, nominal net primary government expenditure should not grow in  2020, in line 

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. 
Cyclically-adjusted  balance  net  of  one-off  and  temporary  measures,  recalculated  by  the  Commission 
using the commonly agreed methodology. 
Net  primary  government  expenditure  comprises  total  government  expenditure  excluding  interest 
expenditure,  expenditure  on  Union  programmes  fully  matched  by  Union  funds  revenue  and  non-
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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with the structural adjustment of 1.0% of GDP stemming from the commonly agreed 
adjustment matrix of requirements  under the Stability and Growth Pact.  At the same 
time, there are signs that idle capacity in the economy is underestimated, with inflation 
projected  to  stay  below  2%  in  2019  and  remaining  slack  in  the  labour  market  (high 
unemployment  rate  and  a  very  high  share  of  involuntary  part-time  work,  temporary 
employees as well as in-work poverty). In addition, the plausibility tool also indicates 
that there is a high degree of uncertainty surrounding the output gap estimates based 
on the common methodology. On that basis, an annual structural adjustment of 0.65% 
of  GDP,  corresponding  to  a  maximum  growth  rate  of  net  primary  government 
expenditure of 0.9%, appears appropriate. According to the Commission 2019 spring 
forecast, under unchanged policies, there is  a risk of a significant deviation from the 
required fiscal adjustment in 2020. In addition, Spain is not projected to comply with 
the requirements of the transitional debt rule in 2019 and 2020. Overall, the Council is 
of the opinion that the necessary measures should be taken as of 2019 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 important. 

(10)  Employment  growth remains robust in  Spain.  Unemployment  continues to  fall but  it 
remains well above the European Union average, especially for young people and for 
the  low-skilled  people.  Gender  gaps  in  employment  and  length  of  working  careers 
remain  wide.  These  represent  untapped  potential  not  least  given  the  rapidly  ageing 
population.  

(11)  While  progressively  reduced,  the  still  widespread  use  of  temporary  contracts, 
including  in  sectors  less  prone  to  seasonal  or  cyclical  activity,  ranks  amongst  the 
highest  in  Europe  and  may  hinder  Spain’s  growth  potential  and  social  cohesion. 
Young  people,  the  low-skilled  and  third-country  nationals  are  those  most  affected, 
often  suffering  from  lower  entitlements  to  social  benefits  and  higher  poverty  risks. 
Temporary  contracts  are  often  very  short  and  provide  weak  incentives  for  both 
workers  and  employers  to  invest  in  training,  which  in  turn  hinders  productivity 
growth. Moving from a temporary contract to a permanent one remains difficult and, 
barriers  to  mobility  of  labour  reduce  opportunities  for  jobseekers  and  hamper  its 
efficient allocation across the country.  

(12)  Spain has strengthened the support to the long-term unemployed, who still represented 
6.4% of the active population in 2018. Recent initiatives seek to make  young people 
employable through counselling and career guidance, but public employment services 
still handle a low share of job vacancies and further efforts are needed to improve their 
use  in  job  search  and  placement.  In  particular,  in  some  regions,  engagement  with 
employers  is  weak  and  profiling  tools  to  better  match  jobseekers  with  employers’ 
needs  are  still  in  an  initial  phase.  Partnerships  between  public  employment  services 
and  social  services  are  progressing,  but  cooperation  is  still  limited  in  some  regions. 
Increased investment in modern public employment services together with support to 
labour  mobility  could  contribute  to  improve  the  employability  and  adaptability  of 
workers and smoothens labour market transitions, thus improving Spain’s productivity 
and long-term inclusive growth.  

(13)  Efforts  to  reinforce  labour  inspectorates  in  order  to  fight  the  abuse  of  temporary 
contracts  are  bearing  some  fruit  and  the  share  of  open-ended  contracts  in  net 
employment growth is increasing. However, employers continue to make an extensive 
use  of  short-term  contracts.  Past  evidence  shows  that  the  numerous  incentives  to 
support  job  creation  are  having  limited  effects  in  promoting  quality  employment. 
Spain launched a new evaluation with the view of simplifying the system, but results 

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are  not  available  yet.  Recruitment  competitions  to  reduce  the  share  of  fixed-term 
employment  in  the  public  sector  at  all  levels  of  government  need  to  be  sped  up  to 
reach  the  target  of  8%  by  the  end  of  2019.  While  the  setting-up  of  tripartite  round 
tables  is  a  good  step  towards  greater  involvement  by  the  social  partners  in  policy 
design, there is room for deeper and more timely consultations. 

(14)  Though decreasing, the proportion of people at risk of poverty and social exclusion as 
well as income inequality remains above the Union average. In-work poverty rates are 
high  amongst  temporary  or  low-skilled  workers,  or  non-EU-born.  The  child  poverty 
rate, although declining, remains very high. The capacity of social transfers other than 
pensions  to  reduce  poverty  remains  among  the  lowest  in  the  Union,  especially  for 
children. Social spending as a share of GDP in Spain for households with children in 
Spain is one of the lowest in the EU and is poorly targeted. Despite a positive trend, 
there  are  still  significant  gaps  in  the  coverage  of  people  with  severe  and  moderate 
dependency.  National  unemployment  assistance  remains  fragmented,  with  multiple 
schemes  that  target  different  groups  of  jobseekers.  Recent  measures  improving  the 
coverage  and  protection  of  income  assistance  for  older  long-term  unemployed  (aged 
52 or above) may, at the same time, weaken incentives to work within this particular 
group.  Meanwhile,  regional  minimum  income  schemes  present  wide  disparities  in 
access conditions, coverage and adequacy across regions and their limited portability 
between  regions  reduces  incentives  for  labour  mobility.  As  a  result,  a  number  of 
people in need do not receive support. The launch of the Universal Social Card system 
will  make  the  social  benefits  system  more  transparent  and  thus  allow  for  a  better 
targeting. While the economic recovery continues to  curb poverty, the situation calls 
for  investment  in  social  inclusion  policies  and  social  infrastructure  (e.g.  social 
housing) in order to attain inclusive growth. In addition, Spain faces specific territorial 
cohesion  challenges,  such  as  acute  depopulation  and  ageing  in  certain  rural  areas. 
Actions  promoting  entrepreneurship,  digitalisation  and  the  social  economy  can  help 
respond to those challenges, as part of integrated territorial development strategies. 

(15)  During the crisis, the Spanish pension system played an important role in maintaining 
the living standards of the elderly, who face a lower risk of poverty. Projections in the 
2018  Ageing  Report  and  Pension  Adequacy  Report  indicate  that  the  2011  and  2013 
reforms  helped  to  ensure  the  sustainability  and  relative  adequacy  of  pensions  in  the 
long term.  However,  a continuation of the relinking of pension increases to  inflation 
(as decided in 2018 and 2019) and the postponement of the sustainability factor would 
require  compensatory  measures  to  ensure  the  sustainability  of  the  pension  system  in 
the medium to long-term. Moreover, action would be needed to address both the main 
challenge of the adequacy of future retirees' incomes and the length and completeness 
of  their  working  careers  in  a  context  of  high  unemployment  and  widespread  use  of 
temporary contracts and part-time employment.  

(16)  Spain's  innovation  performance  and  productivity  growth  are  hampered  by  subdued 
levels of investment in research and development and by skills mismatches. Research 
and development expenditure in the business sector in Spain is only half the level of 
the  Union  average,  particularly  for  large  firms,  with  significant  regional  disparities. 
That  divergence  is  reinforced  by  the  low  and  falling  execution  rate  of  the  public 
budget  for  research  and  development.  Skills  shortages  and  mismatches  are  another 
important  barrier to  the  development  and use of  advanced technologies, in particular 
by  small  and  medium-sized  firms.  Employment  in  high  technology  sectors  and 
knowledge  intensive  services  is  well  below  the  Union  average  in  many  Spanish 
regions.  While  regional  innovation  strategies  for  smart  specialisation  are  being 

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developed  and  the  governance  of  national  research  and  innovation  policy  is  being 
streamlined,  national-regional  coordination  in  the  design,  implementation  and 
evaluation  of  policy  remains  weak.  Improving  Spain's  innovation  performance 
requires significant investments to foster entrepreneurship and start-ups and help them 
grow and to promote the competitiveness of all firms and their adaptation – including 
through digitalisation- to higher added-value activities with the aim of expanding their 
presence  in  international  markets.  It  also  requires  a  stronger  focus  on  public-private 
partnerships,  cooperation  between  academia  and  business  and  technology  transfer, 
particularly  in  favour  of  small  and  medium-sized  companies,  a  strengthened 
governance of research and innovation policy across government levels, and a closer 
alignment  of  research  and  development  infrastructure  and  projects  to  regional  and 
national innovation strategies.   

(17)  Although  improving,  the  early  school  leaving  rate  remains  very  high  in  Spain,  with 
significant regional disparities. There is scope to improve educational outcomes which 
vary greatly across regions. Both factors negatively affect the long-term potential for 
productivity growth. Efforts to reform the education system have stalled. Firms report 
difficulty  in  finding  the  skills  needed  to  embrace  innovation,  notably  as  regards 
specialists in information and communication technologies. Spain approved measures 
to upgrade the dual vocational education and training system, which could play a key 
role  in  providing  the  skills  and  qualifications  required  to  absorb  innovation,  but 
enrolment  in  those  systems  remains  moderate.  Spain’s  rate  of  tertiary  education 
attainment  is  above the  EU average but  tertiary  graduates face difficulties  in  finding 
adequate jobs. Developing human capital through all levels of education and training, 
including  higher  education  and  vocational  training,  and  greater  cooperation  between 
education  and  business  with  a  view  to  mitigating  existing  skills  mismatches,  could 
boost  labour  market  access  of  young  graduates.  It  could  also  provide  firms  with  the 
skills and qualifications required to enhance their innovation capacity and to take full 
advantage  of  the  growth  potential  offered  by  digitalisation.  Retraining  workers  in 
digital  skills  would  also  allow  Spanish  companies  to  remain  competitive  in  an 
increasingly digitised economy. All those actions would contribute to the reduction of 
regional disparities. 

(18)  The  restrictiveness  and  fragmentation  of  regulation  within  Spain  is  preventing  firms 
from benefiting from economies of scale and is holding back productivity. The Law on 
Market Unity remains an important tool to address these issues. Implementing this law 
more  decisively  and  removing  identified  restrictions  on  services  in  particular  for 
certain  professional  services  such  as  civil  engineers,  architects,  legal  and  computer 
services  would  improve  growth  opportunities  and  competition.  As  in  other  fields 
where regions are key actors for the successful implementation of reforms, a stronger 
and  sustained  coordination  between  national  and  regional  authorities  could  make 
policies in this area more effective. 

(19) 

Incomplete  connections  for  freight  transport  by  rail  and  limited  integration  with  the 
Union's electricity and gas markets prevent Spain from fully benefitting from the EU 
Single  Market.  For  this  reason,  Spain  also  needs  to  invest  further  in  electricity 
interconnections with the rest of the Union to achieve the target of at least 10% of its 
installed  electricity  production  capacity  by  2020.  Investment  is  also  needed  to  allow 
for  greater  use  of  rail  for  freight  transport,  including  cross-border  connections  with 
France and Portugal and connections to ports and logistic hubs. 

(20)  Significant investment gaps also remain in the area of natural resources management 
to  ensure  a  more  sustainable  development  model.  Reducing  energy  consumption  in 

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buildings, and developing smart grids and renewable electricity storage would help to 
better  manage  the  demand.  Additional  efforts  should  promote  sustainable  transport 
and  the  circular  economy.  Certain  areas  of  Spain  are  amongst  the  most  exposed  in 
Europe to climate change, with pressure over the existing water resources that require 
further  infrastructure  investments  to  improve  water  management  such  as  wastewater 
treatment,  leaks  in  the  networks  and  water  supply.  In  spite  of  a  steady  progress  in 
recent  years,  Spain  still  needs  to  fulfil  certain  requirements  of  the  Union's  water 
legislation.  Progress  in  meeting  all  these  objectives  would  bring  environmental, 
economic and social benefits to Spain.  

(21)  For  all  identified  investment  gaps,  account  should  be  taken  of  specific  regional 
disparities  in  investment  needs.  Territorial  disparities  in  GDP  per  head  are  moderate 
but they remain wider than before the crisis, mostly due to the asymmetric impact of 
labour shedding across regions. The widest regional disparities are currently identified 
in  labour  and  social  outcome  indicators,  where  most  Spanish  regions  underperform 
relative to the Union average. Other socio-economic indicators present wide territorial 
disparities,  such  as  innovation,  entrepreneurship,  and  competitiveness.  Economic 
policy  related  to  investment  should  take  due  account  of  regional  disparities  in 
investment needs.  

(22)  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 report9. This would allow Spain to make the best use of those 
funds in respect of the identified sectors,  taking into account regional disparities and 
the special situation of the outermost region of the Canary Islands. Strengthening the 
country’s  administrative  capacity  for  the  management  of  these  funds  is  an  important 
factor for the success of this investment. 

(23) 

(24) 

(25) 

In  the  context  of  the  2019  European  Semester,  the  Commission  has  carried  out  a 
comprehensive  analysis  of  Spain’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 Spain in previous years. It has taken into account not only their relevance 
for  sustainable  fiscal  and  socioeconomic  policy  in  Spain,  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 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  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 (4) below. 

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

1. 

Ensure that the nominal growth rate of net primary government expenditure does not 
exceed 0.9% in 2020, corresponding to an annual structural adjustment of 0.65% of 
GDP. Take measures to strengthen the fiscal and public procurement frameworks at 
all  levels  of  government.  Preserve  the  sustainability  of  the  pension  system.  Use 
windfall gains to accelerate the reduction of the general government debt ratio. 

9 
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SWD(2019) 1008 final. 
Under Article 5(2) of Council Regulation (EC) No 1466/97. 

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2. 

3. 

4. 

Ensure  that  employment  and  social  services  have  the  capacity  to  provide  effective 
support.  Foster  transitions  towards  open-ended  contracts,  including  by  simplifying 
the  system  of  hiring  incentives.  Improve  support  for  families  and  address  coverage 
gaps  in  national  unemployment  assistance  and  regional  minimum  income  schemes. 
Reduce early school leaving and improve educational outcomes, taking into account 
regional  disparities.  Increase  cooperation  between  education  and  businesses  with  a 
view to improving the provision of labour market relevant skills and qualifications, 
in particular for information and communication technologies. 

Focus  investment-related  economic  policy  on  fostering  innovation,  resource  and 
energy  efficiency,  upgrading  rail  freight  infrastructure  and  extending  energy 
interconnections with the rest of the Union, taking into account regional disparities. 
Enhance the effectiveness of policies supporting research and innovation. 

Further the implementation of the Law on Market Unity by ensuring that, at all levels 
of  government,  rules  governing  access  to  and  exercise  of  economic  activities,  in 
particular  for  services,  are  in  line  with  principles  of  that  Law  and  by  improving 
cooperation between administrations.  

Done at Brussels, 

For the Council 
The President 

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