Council Implementing Decision of 20 December 2012 amending Implementing Decision 2011/344/EU on granting Union financial assistance to Portugal (2013/64/EU)

Article 1 U.K.

Article 3 of Implementing Decision 2011/344/EU is hereby amended as follows:

(1)

paragraph 7 is replaced by the following:

‘7. Portugal shall adopt the following measures during 2013, in line with specifications in the Memorandum of Understanding:

(a) The general government deficit shall not exceed 4,5 % of GDP in 2013. The 2013 budget shall include permanent consolidation measures of at least 3 % of GDP aiming at reducing the general government deficit within the timeframe referred to in paragraph 3. The Portuguese Government shall explore ways to increase the weight of expenditure reduction in the overall consolidation package for 2013 in order to ensure a medium-term growth-friendly fiscal adjustment tilted towards the expenditure side. Given budgetary execution risks, the Portuguese Government shall prepare contingency measures of 0,5 % of GDP by early 2013 which should be activated in case of a materialisation of such risks.

(b) The 2013 budget shall include revenue measures, in particular restructuring the personal income tax by simplifying the tax structure, increasing the average tax rate while preserving progressivity and broadening the tax base through the elimination of some tax benefits; broadening the corporate income tax base; increasing the investment income tax rate; increasing excise taxes; and introducing changes in recurrent property taxation.

(c) The 2013 budget shall include expenditure-saving measures, in particular rationalising public administration, education, healthcare and social benefits; reducing the wage bill by decreasing permanent and temporary staff and reducing overtime pay; streamlining public and private social transfers and subsidies; reducing transfers to local and regional authorities; and lowering operational and capital expenditures by SOEs.

(d) Portugal shall continue implementing its privatisation programme.

(e) Portugal shall develop common revenue forecasting guidelines for regional and local authorities.

(f) Portugal shall deepen the use of shared services in public administration.

(g) Portugal shall reduce the number of local branches of line ministries (e.g. tax, social security, justice) by merging them into the “Lojas do Cidadão” (administration and utilities single points of contact) and developing further the e-administration over the duration of the Programme.

(h) Portugal shall continue the reorganisation and rationalisation of the hospital network through specialisation, concentration and downsizing of hospital services, joint management and joint operation of hospitals, and shall finalise the implementation of the action plan by the end of 2013.

(i) With the support of internationally-renowned experts and following the adoption of the amendments to Law 6/2006 on New Urban Lease and of the decree law which simplifies the administrative procedure for renovation, Portugal shall undertake a comprehensive review of the functioning of the housing market.

(j) Portugal shall develop a nationwide land registration system to allow a more equal distribution of benefits and costs in the execution of urban planning.

(k) Portugal shall make fully operational the management tool to analyse, monitor and assess the results and impacts of education and training policies and shall establish the professional schools of reference.

(l) Portugal shall complete the adoption of the outstanding sectorial amendments necessary to fully implement Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market(1).

(m) Portugal shall implement targeted measures to achieve a steady reduction of the backlogged enforcement cases with a view to resolving the backlog of court cases.

(n) Portugal shall adopt the framework Law on the main national regulator authorities in order to guarantee their full independence and financial, administrative and management autonomy.

(o) Portugal shall improve the business environment by completing pending reforms on the reduction of the administrative burden (Points of Single Contact provided for by Directive 2006/123/EC and “Zero Authorisation” projects) and by carrying out further simplification of existing licensing procedures, regulations and other administrative burdens in the economy which are a major obstacle for the development of economic activities.

(p) Portugal shall complete the reform of the port work legislation and the ports’ governance system, including the overhaul of port operation concessions.

(q) Portugal shall implement the measures enhancing the functioning of the transport system.

(r) Portugal shall implement the measures eliminating the energy tariff debt and fully transpose the Third EU Energy Package.’;

(2)

paragraph 9 is replaced by the following:

‘9. With a view to restoring confidence in the financial sector, Portugal shall adequately recapitalise its banking sector and ensure an orderly deleveraging process. In that regard, Portugal shall implement the strategy for the Portuguese banking sector agreed with the Commission, the ECB and the IMF so that financial stability is preserved. In particular, Portugal shall:

(a) advise banks to strengthen their collateral buffers on a sustainable basis;

(b) ensure a balanced and orderly deleveraging of the banking sector, which remains critical in permanently eliminating funding imbalances. Banks’ funding plans aim at reducing the loan-to-deposit ratio to an indicative value of approximately 120 % in 2014 and reducing the reliance on Eurosystem funding in the medium term. Those funding plans shall be reviewed quarterly;

(c) encourage the diversification of financing alternatives for the corporate sector, and in particular the SMEs, through an array of measures aiming at improving their access to the capital markets and export credit insurance;

(d) continue to streamline the state-owned CGD group;

(e) optimise the process for recovering the assets transferred from BPN to the three state-owned special purpose vehicles through the outsourcing to a professional third party of the management of the assets, with a mandate to gradually recover the assets over time; select the party managing the credits through a competitive bidding process and include adequate incentives to maximise the recoveries and minimise operational costs into the mandate; and ensure timely disposal of the subsidiaries and the assets in the other two state-owned special purpose vehicles;

(f) on the basis of the set of preliminary proposals to encourage the diversification of financing alternatives to the corporate sector presented, develop and implement solutions that provide financing alternatives to traditional bank credit for the corporate sector; and assess the effectiveness of government-sponsored export credit insurance schemes with a view to taking appropriate measures compatible with Union law to promote exports;

(g) ensure the initial and periodical funding arrangements for the Resolution Fund in two steps, first by the approval of a decree-law on the banks’ contributions to the Resolution Fund, and secondly by the approval of a supervisory notice on the specific periodic contributions by banks; adopt the supervisory notices on the resolution plans; and prioritise, in the implementation of the recovery and resolution plans of banks, those banks that are of systemic importance;

(h) implement the framework for financial institutions to engage in out-of-court debt restructuring for households, smooth the application for restructuring of corporate debt, and implement an action plan to raise public awareness of the restructuring tools;

(i) submit to Parliament amendments to the legal framework governing access to public capital to allow the State, under strict circumstances and in accordance with State aid rules, to exercise control over an institution and to perform mandatory recapitalisations.’.

(1)

OJ L 376, 27.12.2006, p. 36.’;