Council Recommendations
Countries Preambles Recommendations
The Commission’s analysis leads it to conclude that Bulgaria is experiencing1. Further improve tax collection and tax compliance,
excessive macroeconomic imbalances. including through a comprehensive set of measures beyond
• In particular, Bulgaria continues to experience imbalances linked to 2017.
remaining fragilities in the financial sector and high corporate • Step up enforcement of measures to reduce the extent of
indebtedness in a context of the high long-term unemployment. the informal economy, in particular undeclared work.
2. Take follow-up measures on the financial sector reviews, in
→ Bulgaria did not submit its 2017 National Reform Programme and its 2017 particular concerning reinsurance contracts, group-level
Convergence Programme by the deadline. oversight, hard-to-value assets and related-party exposures.
• Improve banking and non-banking supervision through the
• Bulgaria is currently in the preventive arm of the Stability and Growth implementation of comprehensive action plans, in close
Pact. The government did not submit its 2017 Convergence Programme cooperation with European bodies.
by the deadline set by Regulation (EC) No 1466/97. 3. Improve the targeting of active labour market policies and
the integration between employment and social services for
• In spite of the economic deterioration of Bulgaria’s GDP, the structural disadvantaged groups.
balance is projected to remain above the medium-term budgetary • Increase the provision of quality mainstream education, in
objective in both years. Overall, the Council is of the opinion that particular for Roma
Bulgaria Bulgaria is projected to comply with the provisions of the Stability and • Improve the health care system
Growth Pact in 2017 and 2018. 4. Ensure efficient implementation of the 2014-2020 National
Public Procurement Strategy.
• Efforts to improve tax collection are ongoing. Despite improvements, tax
compliance remains a challenge
• The shadow economy and undeclared work are still high
• Tax administrative burden is significant
• While the results confirmed the robustness of the sectors on aggregate,
pockets of vulnerabilities were confirmed, including in some
systemically-important institutions.
• As the follow-up measures have not yet been fully implemented, the
source of the vulnerability remains.
• Corporate debt remains high (well above that of peer countries), placing
a burden on companies’ balance sheets and potentially constraining
credit demand and investment
• The labour force continues to shrink because of population ageing
combined with emigration.
• Currently, the labour market is characterised by high long-term
unemployment and inactivity,
, • Limited accessibility, low funding, the emigration of professionals and
weak health outcomes continue to be key challenges in the healthcare
system.
• Bulgaria’s minimum wage level, while still the lowest in the EU, has
increased significantly since 2011
• The high share of people living at risk of poverty or social exclusion
remains a major economic and social challenge
Finland is currently in the preventive arm of the Stability and Growth Pact 1. Pursue its fiscal policy in line with the requirements of the
and subject to the debt rule. preventive arm of the Stability and Growth Pact, which implies
• In its 2017 Stability Programme, the government plans a deterioration in to achieve its medium term budgetary objective in 2018
the headline balance from -1.9% of GDP in 2016 to -2.3% in 2017, • Ensure timely adoption and implementation of the
followed by steady improvement thereafter, reaching -0.2% in 2020. The administrative reform to improve cost-effectiveness of
medium-term budgetary objective — a deficit of 0.5% of GDP in social and healthcare services.
structural terms — is projected to be met from 2019 onwards.
2. Promote the further alignment of wages with productivity
• Finland requested to avail of the flexibility under the preventive arm developments, fully respecting the role of social partners.
pursuant to the "Commonly agreed position on Flexibility within the
Stability and Growth Pact" endorsed by the ECOFIN Council in February 3. Continue to improve the regulatory framework and reduce
2016 in view of the planned implementation of major structural reforms the administrative burden to increase competition in services
with a positive impact on the long-term sustainability of public finances and to promote investment.
and national expenditures on projects co-financed by the EU under the
Finland European Structural and Investment Funds
This Flexibility was requested in order to go through with the
implementation of the Competitiveness Pact, a labour reform.
• For more than 90% of employees, the Pact freezes wages for 12
months, and permanently increases the annual working time by 24
hours without compensation. In addition, employees will
permanently pay a larger proportion of the contributions to social
security.
• To compensate for the wage freeze and the increased cost burden
for employees, the government lowered the taxes on earned income
permanently as from 2017. → Finland is convinced that this will
improve employment sector and public finances (for the purpose of
increasing investments)
January 2017, a pension reform entered into force that will raise the lowest
statutory retirement age from 63 to 65 by 2027 and will link the statutory
retirement age to changes in life expectancy.
Wage increases have been moderate over recent years
Countries Preambles Recommendations
The Commission’s analysis leads it to conclude that Bulgaria is experiencing1. Further improve tax collection and tax compliance,
excessive macroeconomic imbalances. including through a comprehensive set of measures beyond
• In particular, Bulgaria continues to experience imbalances linked to 2017.
remaining fragilities in the financial sector and high corporate • Step up enforcement of measures to reduce the extent of
indebtedness in a context of the high long-term unemployment. the informal economy, in particular undeclared work.
2. Take follow-up measures on the financial sector reviews, in
→ Bulgaria did not submit its 2017 National Reform Programme and its 2017 particular concerning reinsurance contracts, group-level
Convergence Programme by the deadline. oversight, hard-to-value assets and related-party exposures.
• Improve banking and non-banking supervision through the
• Bulgaria is currently in the preventive arm of the Stability and Growth implementation of comprehensive action plans, in close
Pact. The government did not submit its 2017 Convergence Programme cooperation with European bodies.
by the deadline set by Regulation (EC) No 1466/97. 3. Improve the targeting of active labour market policies and
the integration between employment and social services for
• In spite of the economic deterioration of Bulgaria’s GDP, the structural disadvantaged groups.
balance is projected to remain above the medium-term budgetary • Increase the provision of quality mainstream education, in
objective in both years. Overall, the Council is of the opinion that particular for Roma
Bulgaria Bulgaria is projected to comply with the provisions of the Stability and • Improve the health care system
Growth Pact in 2017 and 2018. 4. Ensure efficient implementation of the 2014-2020 National
Public Procurement Strategy.
• Efforts to improve tax collection are ongoing. Despite improvements, tax
compliance remains a challenge
• The shadow economy and undeclared work are still high
• Tax administrative burden is significant
• While the results confirmed the robustness of the sectors on aggregate,
pockets of vulnerabilities were confirmed, including in some
systemically-important institutions.
• As the follow-up measures have not yet been fully implemented, the
source of the vulnerability remains.
• Corporate debt remains high (well above that of peer countries), placing
a burden on companies’ balance sheets and potentially constraining
credit demand and investment
• The labour force continues to shrink because of population ageing
combined with emigration.
• Currently, the labour market is characterised by high long-term
unemployment and inactivity,
, • Limited accessibility, low funding, the emigration of professionals and
weak health outcomes continue to be key challenges in the healthcare
system.
• Bulgaria’s minimum wage level, while still the lowest in the EU, has
increased significantly since 2011
• The high share of people living at risk of poverty or social exclusion
remains a major economic and social challenge
Finland is currently in the preventive arm of the Stability and Growth Pact 1. Pursue its fiscal policy in line with the requirements of the
and subject to the debt rule. preventive arm of the Stability and Growth Pact, which implies
• In its 2017 Stability Programme, the government plans a deterioration in to achieve its medium term budgetary objective in 2018
the headline balance from -1.9% of GDP in 2016 to -2.3% in 2017, • Ensure timely adoption and implementation of the
followed by steady improvement thereafter, reaching -0.2% in 2020. The administrative reform to improve cost-effectiveness of
medium-term budgetary objective — a deficit of 0.5% of GDP in social and healthcare services.
structural terms — is projected to be met from 2019 onwards.
2. Promote the further alignment of wages with productivity
• Finland requested to avail of the flexibility under the preventive arm developments, fully respecting the role of social partners.
pursuant to the "Commonly agreed position on Flexibility within the
Stability and Growth Pact" endorsed by the ECOFIN Council in February 3. Continue to improve the regulatory framework and reduce
2016 in view of the planned implementation of major structural reforms the administrative burden to increase competition in services
with a positive impact on the long-term sustainability of public finances and to promote investment.
and national expenditures on projects co-financed by the EU under the
Finland European Structural and Investment Funds
This Flexibility was requested in order to go through with the
implementation of the Competitiveness Pact, a labour reform.
• For more than 90% of employees, the Pact freezes wages for 12
months, and permanently increases the annual working time by 24
hours without compensation. In addition, employees will
permanently pay a larger proportion of the contributions to social
security.
• To compensate for the wage freeze and the increased cost burden
for employees, the government lowered the taxes on earned income
permanently as from 2017. → Finland is convinced that this will
improve employment sector and public finances (for the purpose of
increasing investments)
January 2017, a pension reform entered into force that will raise the lowest
statutory retirement age from 63 to 65 by 2027 and will link the statutory
retirement age to changes in life expectancy.
Wage increases have been moderate over recent years
