CELEX: 52013PC0910
Language: en
Date: 2013-11-15
Title: Proposal for a COUNCIL OPINION on the Economic Partnership Programme of the Netherlands

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		52013PC0910
		
			Proposal for a COUNCIL OPINION on the Economic Partnership Programme of the Netherlands /* COM/2013/0910 final - 2013/0397 (NLE) */
			
				
		
		
			
			   	2013/0397 (NLE)
Proposal for a
COUNCIL OPINION
on the Economic Partnership Programme of
the Netherlands

THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the
Treaty on the Functioning of the European Union,
Having regard to
Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21
May 2013[1] on common provisions for monitoring and
assessing Draft Budgetary Plans and ensuring the correction of excessive
deficit of the Member States in the euro area, and in particular Article 9(4) thereof,
Having regard to the
proposal of the European Commission,
Whereas: 
(1)       The Stability and Growth
Pact (SGP) aims at securing budgetary discipline across the Union and sets out
the framework for preventing and correcting excessive government deficits. It
is based on the objective of sound government finances as a means of
strengthening the conditions for price stability and for strong sustainable
growth underpinned by financial stability, thereby supporting the achievement
of the Union's objectives for sustainable growth and jobs. 
(2)       Regulation (EU) No
473/2013 of the European Parliament and of the Council of 21 May 2013 on common
provisions for monitoring and assessing Draft Budgetary Plans and ensuring the
correction of excessive deficit of the Member States in the euro area sets out
provisions for enhanced monitoring of budgetary policies in the euro area and
for ensuring that national budgets are consistent with the economic policy
guidance issued in the context of the SGP and the European Semester. Since
purely budgetary measures might be insufficient to ensure a lasting correction
of the excessive deficit, additional policy measures and structural reforms may
be required.  
(3)       Article 9 of Regulation
(EU) No 473/2013 sets out the modalities for Economic Partnership Programmes,
to be submitted by euro area Member States under an Excessive Deficit
Procedure. Setting out a roadmap of measures to contribute to an effective and
durable correction of the excessive deficit, the Economic Partnership Programme should detail in particular the main
fiscal-structural reforms, notably those referring to taxation, pension and
health systems and budgetary frameworks, which will be instrumental to correct
the excessive deficit in a lasting manner. 
(4)       On 2 December 2009, the
Council adopted a decision according to Article 126(6) of the Treaty, whereby the
  Netherlands is placed in an excessive deficit procedure. The Council adopted
a revised recommendation under Article 126(7) on 21 June 2013. In this context,
the Netherlands was requested to present an Economic Partnership Programme by 1
October 2013.
(5)       On 30 September 2013, and
thereby within the time frame established by Article 9(3) and 17(2) of
Regulation (EU) No 473/2013, the Netherlands presented to the Commission and to
the Council an Economic Partnership Programme, setting out in particular fiscal-structural
reforms that aim at ensuring an effective and lasting correction of the
excessive deficit (CSR 1). The Economic Partnership Programme also includes measures
aimed at addressing the wider set of country-specific recommendations addressed
to the Netherlands by the Council on 9 July 2013: a limitation of debts and
related financial risks on the house purchasing market; a promotion of turnover
in the house purchasing market, an improvement in the functioning and
allocation of the subsidised rental sector; a promotion of the private rental
sector (CSR 2); the improvement of the financial supervision of the pension
funds, enabling an improved balance between risks and ambition, also from an
intergenerational perspective; a lowering of the annual accrual rate for
occupational pensions, taking into account the longer accrual period in view of
increases in the pension age; the improvement of the employability of older
employees; a revision of the long-term care system (CSR 3); improving labour
force participation; and promoting labour market transitions (CSR 4). Apart
from the additional consolidation measures for 2014 and beyond that have been
transmitted in the Draft Budgetary Plan of the Netherlands, new measures in the
area of fiscal structural measures listed in the Economic Partnership Programme
pertain to a tighter coverage of budgetary rules for subnational layers of
government. Actual  measures listed in the Economic Partnership Programme
covering CSRs 2 to 4 had for a large part already been launched before the
latest vintage of country specific recommendations were released. 
 (6)      The fiscal structural
measures that the Netherlands plans to implement pertain in particular to the
codification of fiscal rules, accompanied by a tighter coverage of subnational
governments which supports the strengthening of the national fiscal framework.
In combination with the additional fiscal consolidation measures adopted in the
2014 Draft Budgetary Plan they can be expected to support a sustainable
correction of the excessive deficit and the pursuit of the medium-term
objective of a structural budget balance. 
(7)       The measures to improve
the functioning of the housing market can be expected to gradually reduce the
subsidies to debt-financing of house purchases and the default risks the
government is exposed to through the national mortgage guarantee scheme. The
lowering of the transfer tax is costly in terms of foregone fiscal revenue, but
is expected to improve the balance of demand and supply and the allocation of
capital in the housing market. The most important of these measures were
already outlined in the National Reform Programme. Overall, they appear to go
in the right direction but need to be followed up and possibly adapted to
ensure their adequacy in response to the relevant country specific
recommendation (CSR 2). 
(8)       The measures to improve
the functioning of pension funds can be expected to reduce fiscal subsidies to
the system while at the same time supporting the employability of older
workers. The measures can be expected to improve the efficiency of the
long-term care system if results materialise as foreseen, thereby contributing
to fiscal sustainability. However, risks remain regarding the details of the
implementation and their economic and budgetary effects, as well as with
respect to the impact on actual pension contributions. As the measures are
still work in progress, a further analysis of the impact of the policy plans
and their contribution to addressing the challenge of fiscal sustainability
will be needed.
(9)       The measures to improve
labour market participation include changes to the transferability of tax
credits and reforms of a number of allowances and unemployment benefits.
Overall, these measures can also be expected to have a positive impact on the
budgetary balance. However, the measures are planned to be phased in slowly,
also as a result of the agreements with social partners governing their
implementation. The most important of these measures were already outlined in
the National Reform Programme. A faster implementation would provide for a
better functioning of the labour market and support economic growth,
HAS ADOPTED THIS OPINION: 
The Economic Partnership
Programme of the Netherlands presented to the Commission and to the Council on
30 September 2013 includes a broadly adequate set of fiscal-structural reforms,
which would be supportive of an effective and lasting correction of the excessive
deficit. Specifically, the Economic Partnership Programme reiterates the
commitment to reforms as given in the latest National Reform Programme and
provides some further details on the implementation of some of these measures
since its submission and on the timelines for follow-up. The timetable
of the measures planned to address the country-specific recommendation on the
labour market in particular appears to constitute a protraction of major
reforms in this area. Although detailed information on all measures is given,
the Economic Partnership Programme lacks information regarding the specific
challenges and risks during their implementation. The Netherlands is
therefore invited in the upcoming National Reform and Stability Programmes to
provide additional information on the implementation of planned reforms and to
ensure progress towards meeting the country specific recommendations under the
European Semester. The Commission and the Council will monitor the
implementation of reforms in the context of the European Semester. 
Done at Brussels, 
                                                                       For
the Council
                                                                       The
President
[1]       OJ L 140, 27.5.2013 p. 11.