28.10.2006

EN

Official Journal of the European Union

C 260/1

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COUNCIL OPINION

of 10 October 2006

on the adjusted convergence programme update of Hungary, 2005-2009

(2006/C 260/01)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

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 policies (1), and in particular Article 9(3) thereof,

Having regard to the opinion of the Council of 24 January 2006 on the updated convergence programme of Hungary, 2005-2008,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

(1)   On 10 October 2006 the Council examined the adjusted convergence programme update of Hungary received on 1 September 2006, which covers the period 2005 to 2009. (2)

(2)   Following the adoption of a comprehensive economic reform package in the mid-nineties, the Hungarian economy enjoyed stable and relatively high rates of growth and a reduction in inflation supported by sound macroeconomic policies and appropriate structural reforms. However, starting from 2001, and more importantly over the recent years, significantly increased public expenditure coupled with tax cuts and generous public wage increases resulted each year in budget deficits well above 5 % of GDP, producing large deviations compared to the original deficit targets. In addition, end-year figures were substantially increased ex-post with virtually every fiscal notification. Instead of the planned deficit targets contained in the May 2004 convergence programme of 4,6 % of GDP in 2004, 4,1 % of GDP in 2005 and 3,6 % of GDP in 2006, the outcome was 6,6 % of GDP in 2004, 7,5 % of GDP in 2005 and is expected by the Government to be around 10,1 % of GDP in 2006, by far the highest level in the EU (all numbers including pension reform burden). A large part of the budgetary slippages stemmed from overoptimistic budgetary planning, large expenditure overruns, tax cuts and the lack of sufficient structural adjustment efforts. This highly expansionary fiscal policy has considerably damaged the credibility of the fiscal policy, and has been weighing increasingly on the economy. In particular, it has contributed to serious external imbalances and to a significant increase in the total foreign debt stock (from below 20 % of GDP in 2001 to close to 30 % of GDP in 2005), and much higher interest rate spreads compared to other recently acceded Member States.

(3)   On 5 July 2004, the Council decided that Hungary was in excessive deficit and issued a first recommendation under Article 104(7) for its correction by 2008, the target year set by the Hungarian authorities in the convergence programme of May 2004. In January 2005 and once again in November 2005, the Council, based on Article 104(8), decided that Hungary did not comply with this first and the follow-up recommendation of 8 March 2005. It notably took into account the substantial deviation from the medium-term adjustment path, namely with respect to the deficit targets in 2005 and 2006.

(4)   On 1 December 2005, the Hungarian authorities presented to the Commission and the Council a convergence programme update which contained a new adjustment path, while retaining the 2008 target year for correction of the excessive deficit. On 24 January 2006, the Council adopted an opinion on this 2005 update, in which it considered that the very large cut in expenditures of 7,5 % of GDP was not backed by concrete measures. Therefore, in accordance with the second paragraph of Art. 9 of section 3 of Council Regulation (EC) No 1466/97 as amended, the Council invited Hungary to present as soon as possible, and by 1 September 2006 at the latest, an adjusted convergence programme update identifying concrete and structural measures that are fully consistent with its medium-term adjustment path.

(5)   After a general government deficit outcome of 7,5 % of GDP in 2005 reported in Spring 2006, the Hungarian authorities announced following the April 2006 general elections that there would be very large upward revisions of the 2006 deficit which could reach, in the absence of corrective steps, 11,6 % of GDP (3). The overshoot compared to the deficit target of 6,1 % of GDP set in the budget law and the 2005 convergence programme update took place almost entirely on the expenditure side (around 5 % of GDP). It mainly occurred in the areas of operational costs of central budgetary institutions, pension payments, health-care expenditure, and because of higher-than-expected investment of local governments due to the electoral cycle. Around 1 % of GDP of the overshoot was explained on the one hand by the accounting of motorway investment inside the general government (4) (1,1 % of GDP), which was originally planned to be undertaken by PPPs (public private partnerships) to be recorded off budget, and on the other by the costs of military aircraft (0,3 % of GDP) purchased under a financial lease. Both of these outlays were not included originally in the official target figure.

(6)   In June, facing a spiralling budget deficit, the Government — re-appointed following the April 2006 general elections — withdrew the remainder of its five-year tax cut programme which would have further lowered revenues by around 3 % of GDP by 2010 and adopted a corrective fiscal package. A number of the corrective measures, including all those on the revenue side, have already been adopted by Parliament. The tax increases, together with some immediate cuts in health-care expenditure, gas price subsidies, public administration expenditure and the full withdrawal of the 0,3 % of GDP general reserve of the budget, are expected by the Government to reduce the deficit overrun in 2006 by 1,5 % of GDP, in order to achieve the new deficit objective of 10,1 % of GDP. These measures are also expected to produce important effects over the future years.

(7)   The macroeconomic scenario presented in the programme projects real GDP growth to fall back in the coming years from 4,1 % in 2006 to 2,2 % and 2,6 % in 2007 and 2008, respectively, due to the contractionary impact of the fiscal adjustment measures set out in the programme, some of which have already been implemented from July 2006. Growth is expected to recover to pre-adjustment levels by 2009. These developments are also reflected in the implicit cyclical conditions, which show negative output gaps for the years 2007 and 2008 and the return of output to its potential level by 2009. Based on currently available information, and without prejudging the Commission services' Autumn 2006 forecast, this macroeconomic scenario appears broadly plausible although it is somewhat optimistic concerning 2009. The significant improvement of the external balances expected in the programme seems plausible in view of both the direct and the indirect effects of the fiscal adjustment measures. In particular, the current account deficit is expected to decrease from close to 8 % of GDP in 2006 to less than 4 % of GDP in 2009. Inflation is projected to peak at 6,2 % in 2007 after 3,5 % in 2006 and to decrease to 3 % by 2009. The projected pattern can be explained in the light of the VAT increase and of the decreases in price subsidies decided in Summer 2006. However, the level of inflation seems somewhat underestimated over the entire horizon despite the dampening effect of the economic slowdown.

(8)   The programme aims to correct the excessive deficit by 2009. This would be achieved by a steep and front-loaded deficit reduction of 6,9 percentage points of GDP within three years, from the high starting position of 10,1 % of GDP in 2006 to 3,2 % of GDP in 2009. The improvement in the primary balance over the period is of the same magnitude. The programme recognises that the deficit target of 3,2 % of GDP in 2009 would still exceed the 3 % of GDP threshold specified in the Treaty, but assumes that the Council and the Commission, when considering the case for an abrogation of the excessive deficit procedure for Hungary, could take into account a part of the net cost of the pension reform, in line with the revised Stability and Growth Pact. (5) Nearly half of the reduction in the deficit ratio is already to take place in 2007. The planned reduction in the nominal deficit is to be achieved by increasing the revenue-to-GDP ratio by 3 percentage points and by reducing the expenditure-to-GDP ratio by 3,9 percentage points over the programme period. (6) As far as the revenue side is concerned, all revenue increases underpinning the projected rise in the programme's revenue-to-GDP ratio have been adopted. On top of the above-mentioned already adopted expenditure cuts, the Hungarian authorities plan to achieve their targets by implementing strict multi-annual spending caps for most expenditure items and to strengthen budgetary expenditure controls. These plans are expected to be included and fully spelled out in the 2007 budget law, which will be presented to parliament by end-October. Moreover, the programme announces comprehensive structural reforms aimed to ensure the achievement of the deficit targets, especially in the outer years of the programme (such as the introduction of co-payment schemes in the health-care sector, the revamping of price subsidies and a streamlining of the central public administration).

(9)   Over the programme period, the structural balance (in cyclically-adjusted terms and net of one-off and other temporary measures) calculated according to the commonly agreed methodology and based on programme figures is planned to improve on average by around 2 % of GDP per year, falling from 9 % of GDP in 2006 to 3 % in 2009. The programme sets the medium-term objective (hereafter MTO) for the budgetary position as a structural budget deficit between 0,5 % and 1 % of GDP, which it does not aim to achieve within the programme period. The MTO lies within the range indicated in the Stability and Growth Pact and the code of conduct and adequately reflects long-term potential output growth and the debt ratio.

(10)   Regarding the budgetary outcome, there are a number of elements on the positive side. Large part of the measures to back the reduction of the deficit in 2006 and 2007 are either already adopted or planned to be incorporated into the 2007 budget. In addition, in recent months the Government has taken decisions on some initial steps of the planned structural reforms. Moreover, the Hungarian authorities have decided to improve the budgetary process through more transparent accounting and by introducing an expenditure-control rule from 2007 onwards and multi-annual expenditure planning for budgetary institutions; they also commit themselves in the programme to report twice a year to the Commission and the Council on budgetary developments and announce corrective steps in case of slippages. However, there are also important risks. There is still some uncertainty about the effective enforcement of the planned expenditure freezes in 2007 and 2008 and about containing expenditure increases in areas not covered by the freezes. Moreover, despite the planned measures, the achievement of the budgetary targets in the outer years could be subject to important risks. Although the risks to the revenue side stemming from the macroeconomic scenario appear on the whole broadly balanced, the expected revenues in the outer years and especially in 2009 are rather optimistic. Moreover, apart from the poor track-record in expenditure control and the lack of precise information about how it will be achieved in the future, the weak institutional control of the budgetary process exposes public finances to substantial slippages. Therefore, the envisaged deficit reduction is contingent on the rigorous implementation of the envisaged structural reforms and expenditure control starting from the early years of the programme.

Finally, it cannot be excluded that the almost 2 % of GDP debt accumulated by the public transport companies since end 2002 will be assumed by the Government (given that this has happened at regular intervals in the past), should the restructuring and partial privatisation plans of the national railway company fail to yield the expected results; this would have a temporary effect on the deficit. Overall, the budgetary outcome could be worse than projected in the programme, both in the short term and the outer years of the programme.

(11)   In view of the risk assessment above, the planned correction of the excessive deficit by 2009 on a sustainable basis requires the Government to strictly achieve the budgetary targets. This hinges upon an effective implementation of all the measures announced in the programme for the years 2006 to 2009, as well as upon a further specification and implementation of structural reforms and expenditure control.

(12)   The debt-to-GDP ratio, according to the programme projections, would significantly increase in 2006 to 68,5 % (from 62.3 % in 2005), above the 60 % of GDP Treaty reference value. The programme projects the debt ratio to increase further to 71,3 % in 2007 and to 72,3 % in 2008. The ratio is expected to start decreasing in 2009 to 70,4 %. Risks to the envisaged debt path mainly stem from higher-than-expected deficits in the primary balance including due to the possible assumption of the debt of the public transport companies. In view of this risk assessment, the debt ratio would not be sufficiently diminishing towards the reference value during the programme period.

(13)   Hungary appears to be at high risk with regard to the sustainability of public finances. The very weak budgetary position, in conjunction with the relatively high and rising debt ratio, constitutes a notable risk to sustainable public finances, even before considering the long-term budgetary impact of an ageing population. Moreover, the long-term budgetary impact of ageing in Hungary is well above the EU average, influenced notably by a significant increase in pension expenditure as a share of GDP over the long-term. Carrying out a large consolidation of the public finances over the medium-term as planned, further strengthening the budgetary position thereafter, and addressing the significant increases in pension expenditure is therefore necessary if these risks are to be reduced.

(14)   While there has been a serious deterioration in public finances in 2006, hampering the correction of the excessive deficit in line with the planned path, the measures envisaged in the programme, if fully specified and implemented, are broadly consistent with the broad economic policy guidelines included in the integrated guidelines. (7) In particular, Hungary plans to take effective actions to correct the excessive deficit and to implement reforms in order to strengthen fiscal discipline and to increase transparency. These measures should also contribute to correcting the high current account deficits. However, they need to be backed up by structural reforms to ensure fiscal sustainability.

(15)   With the Implementation Report to be submitted by mid-October 2006 in the context of the renewed Lisbon strategy for growth and jobs, the Hungarian Government is planning to substantially revise reform plans contained in the October 2005 National Reform Programme (NRP) to reflect the Government's new strategy. The adjusted convergence programme update outlines plans and measures to restructure the public administration, health-care, pension and public education systems. In particular, by 2007, measures are planned to reduce the size of the public administration and improve its efficiency by exploiting economies of scale; to introduce means-testing in subsidies; to restructure pharmaceutical subsidies and to partly liberalise the trade of pharmaceutical products; to introduce co-payments for health-care services. In addition, by 2007, proposals for law amendments are to be submitted to the parliament aiming at increasing the retirement age and decreasing early retirement by improving the incentive schemes and by revamping the disability pension system; at putting health-care services on strict insurance basis and at rationalising the provision and the use of these services; at restructuring public education. These plans are still to be substantiated. The programme complements these plans by envisaged improvements to the institutional features of the public finance framework.

The high and widening budget deficit in Hungary in recent years, and in particular in 2006, has created serious concern and calls for urgent, determined and sustained action. It is therefore to be welcomed that in the adjusted convergence programme update of September 2006 the Hungarian authorities give priority to the reduction of the excessive deficit through a substantial front-loaded effort and commit to reporting to the Commission and Council twice a year on progress and on actions taken to stay on track. While important first steps have been taken to secure additional revenues and cut expenditures with a view to reaching the new 2007 deficit target and plans have been announced to improve expenditure control and undertake structural reforms so as to back the adjustment path, risks with respect to meeting the adjustment path remain in both the short term and the outer years of the programme. The planned deficit reduction is contingent on the rigorous implementation of the envisaged structural reforms, on the enforcement of expenditure controls from the early years of the programme, as well as on a reinforcement of the institutional set-up of public finances in Hungary, all aspects on which the Council urges the Hungarian government to ensure the highest effort.

A recommendation addressed to Hungary to tackle the large budgetary imbalances is adopted by the Council at the same time under Article 104(7) of the Treaty.

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(1)  OJ L 209, 2.8.1997, p. 1. Regulation as amended by Regulation (EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1). The documents referred to in this text can be found at the following website:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm

(2)  The adjusted convergence programme update (hereafter referred to as the programme), submitted to comply with the Council request of January 2006, broadly follows the model structure and data provision requirements for stability and convergence programmes specified in the new code of conduct. The programme provides all compulsory data prescribed by the new code of conduct. Some optional data are missing. They mainly concern the general government expenditure by function, government debt developments and data on long-term sustainability of public finances.

(3)  Hungary has decided no longer to benefit from the transitory period on the sectoral classification of pension schemes granted by Eurostat on 23 September 2004, that will in any case expire on 1 April 2007. Without the pension reform burden, the deficit outcome in 2005 would have been 6,1 % of GDP and the target for 2006 would have been 4,7 % of GDP.

(4)  Originally this investment was planned to be undertaken by PPPs (public private partnerships) to be recorded off budget.

(5)  According to Council Regulation (EC) No 1056/2005, Article 1 paragraph 7, if the general government deficit ‘…has declined substantially and continuously and has reached a level that comes close to the reference value’, the Council and the Commission should consider degressively the net cost of a pension reform that includes a fully-funded pillar. For Hungary, this would correspond in 2009 to 20 % of the net cost of the pension reform or an estimated 0,3 % of GDP.

(6)  It should be noted in this context that the trajectory of the total revenues and total expenditure ratios includes projected EU transfers which raise both the expenditure and revenue ratios by some 1,7 percentage points over the programme period (by 1,1 percentage point in 2009 alone); thus adjusted for these transfers, the revenue-to-GDP ratio increases by 1,3 percentage points, while the expenditure-to-GDP ratio falls by 5,6 percentage points.

(7)  On July 2005, the broad economic policy guidelines were integrated into the integrated guidelines as part of the Reinforced Lisbon Strategy (OJ L 205, 6.8.2005, p. 28)

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28.10.2006

EN

Official Journal of the European Union

C 260/6

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Euro exchange rates (1)

27 October 2006

(2006/C 260/02)

1 euro=

	Currency	Exchange rate
USD	US dollar	1,2683
JPY	Japanese yen	150,26
DKK	Danish krone	7,4547
GBP	Pound sterling	0,67060
SEK	Swedish krona	9,2215
CHF	Swiss franc	1,5911
ISK	Iceland króna	86,57
NOK	Norwegian krone	8,3110
BGN	Bulgarian lev	1,9558
CYP	Cyprus pound	0,5768
CZK	Czech koruna	28,410
EEK	Estonian kroon	15,6466
HUF	Hungarian forint	261,70
LTL	Lithuanian litas	3,4528
LVL	Latvian lats	0,6961
MTL	Maltese lira	0,4293
PLN	Polish zloty	3,8781
RON	Romanian leu	3,5205
SIT	Slovenian tolar	239,62
SKK	Slovak koruna	36,380
TRY	Turkish lira	1,8403
AUD	Australian dollar	1,6561
CAD	Canadian dollar	1,4262
HKD	Hong Kong dollar	9,8699
NZD	New Zealand dollar	1,9279
SGD	Singapore dollar	1,9837
KRW	South Korean won	1 201,52
ZAR	South African rand	9,5450
CNY	Chinese yuan renminbi	10,0064
HRK	Croatian kuna	7,3660
IDR	Indonesian rupiah	11 547,87
MYR	Malaysian ringgit	4,6312
PHP	Philippine peso	63,149
RUB	Russian rouble	33,9773
THB	Thai baht	46,764

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(1)  

Source: reference exchange rate published by the ECB.

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28.10.2006

EN

Official Journal of the European Union

C 260/7

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Commission communication concerning the prolongation of the Framework on State aid to shipbuilding

(2006/C 260/03)

(Text with EEA relevance)

The Framework on State aid to shipbuilding (1) (‘the Framework’) will expire on 31 December 2006.

The Framework has been applicable since 1 January 2004, which is a relatively short period of time. Only a few cases have been assessed under the Framework. In particular, the Framework contains provisions on innovation aid, which are unique for this industry and with which the Commission has limited experience.

Accordingly, the Commission has decided to continue to apply the Framework until 31 December 2008. During this period, the Commission expects to be able to assess whether it is appropriate to maintain sector-specific State aid rules for shipbuilding, in the light of the further experience it has acquired.

Since Council Regulation (EC) No 1177/2002 of 27 June 2002 concerning a temporary defensive mechanism to shipbuilding (2) expired on 31 March 2005, the references in the Framework to that Regulation are no longer relevant. Accordingly, point 9 and point 12(e) of the Framework will no longer be applied by the Commission with effect from 1 January 2007.

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(1)  OJ C 317, 30.12.2003, p. 11.

(2)  OJ L 172, 2.7.2002, p. 1. Regulation as amended by Regulation (EC) No 502/2004 (OJ L 81, 19.3.2004, p. 6).

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28.10.2006

EN

Official Journal of the European Union

C 260/8

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Prior notification of a concentration

(Case COMP/M.4417 — Telecom Italia/AOL German Access Business)

(2006/C 260/04)

(Text with EEA relevance)

1.

On 20 October 2006, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (1), by which Telecom Italia S.p.A. (‘Telecom Italia’, Italy) acquires, within the meaning of Article 3(1) (b) of the Council Regulation, sole control of the AOL German Access Business (‘AOL’) by way of purchase of shares.

2.	The business activities of the undertakings concerned are: — for Telecom Italia: provision of voice telephone, mobile services and data transmission services; — for AOL: provision of internet services.

3.	On preliminary examination, the Commission finds that the notified concentration could fall within the scope of Regulation (EEC) No 139/2004. However, the final decision on this point is reserved.

4.

The Commission invites interested third parties to submit their possible observations on the proposed operation to the Commission. Observations must reach the Commission not later than 10 days following the date of this publication. Observations can be sent to the Commission by fax (fax No (32-2) 296 43 01 or 296 72 44) or by post, under reference number COMP/M.4417 — Telecom Italia/AOL German Access Business to the following address: European Commission Directorate-General for Competition Merger Registry J-70 B-1049 Bruxelles/Brussel

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(1)  OJ L 24, 29.1.2004, p. 1.

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28.10.2006

EN

Official Journal of the European Union

C 260/9

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Imposition of public service obligations imposed in respect of scheduled air services on routes within Greece in accordance with Council Regulation (EEC) No 2408/92

(2006/C 260/05)

(Text with EEA relevance)

1.	Pursuant to Article 4(1)(a) of Regulation (EEC) No 2408/92 the Greek Government has decided to impose a public service obligation in respect of scheduled services on the following routes: — Athens — Kalimnos — Thessaloniki — Kalamata — Thessaloniki — Limnos — Ikaria

2.

On these routes, the public service obligation is as follows: (A)   Minimum frequency of flights and minimum number of seats available each week on each route:   Athens — Kalimnos — Six return flights a week and a total of 120 seats a week in each direction throughout the winter; — Eight return flights a week and a total of 160 seats a week in each direction throughout the summer;   Thessaloniki — Kalamata — Two return flights a week and a total of 30 seats a week in each direction throughout the winter; — Three return flights a week and a total of 45 seats a week in each direction throughout the summer;   Thessaloniki — Limnos — Ikaria — Two return flights a week and a total of 40 seats a week in each direction throughout the winter; — Three return flights a week and a total of 60 seats a week in each direction throughout the summer; The winter and summer periods are as determined by IATA. If the average occupancy rate of all the flights on one route has exceeded 75 % during the previous period, the minimum weekly frequency or the minimum number of seats provided each week may be increased in proportion to the increase recorded. This increase shall be notified to the carrier operating the service by registered letter six months before it applies, and shall not come into effect until it has been published by the European Commission in the Official Journal of the European Union. Where the aircraft used do not have the capacity required to cover the minimum weekly seat availability (laid down in paragraph 2(A)), the flight frequencies may be increased accordingly. If flights are cancelled because of weather conditions, they must be operated on the days immediately afterwards in order to fulfil the weekly requirement, taking into account the minimum number of seats provided pursuant to paragraph 2(A). (B)   Fares The single economy fare may not exceed the following rates: — : Athens–Kalimnos: : 60 euros — : Thessaloniki—Kalamata: : 70 euros — : Thessaloniki—Limnos: : 60 euros — : Thessaloniki—Ikaria: : 70 euros — : Limnos—Ikaria: : 40 euros The above amounts may be increased in the event of an unforeseen increase in the costs of operating the service outside the control of the carrier. This increase shall be notified to the carrier operating the service but shall not come into effect until it has been published by the European Commission in the Official Journal of the European Union. (C)   Minimum frequency of flights In accordance with Article 4(1)(c) of Regulation (EEC) No 2408/92, a carrier intending to operate scheduled services on these routes must give a guarantee that it will operate the route for at least twelve months without interruption. The number of flights cancelled for reasons for which the carrier is responsible may not exceed 2 % of the total annual number of flights, except in cases of force majeure. Any intention to cease operation of any of the aforementioned routes must be notified by the air carrier to the Civil Aviation Department, Directorate for Air Operations, Section for Bilateral Air Agreements, at least six months before services are interrupted.

3.

Useful information Operation of flights by a Community carrier who does not fulfil the public service obligations imposed may result in the imposition of administrative or other sanctions. As regards the types of aircraft to be used, air carriers are asked to consult Aeronautical Information Publications of Greece (AIP Greece) as regards technical and business data and airport procedures. As regards timetables, arrivals and departures of aircraft must be planned within the operating times of airports as determined by decision of the Minister for Transport and Communications. If no air carrier has declared to the Civil Aviation Authority, Directorate for Air Operations, an intention to operate scheduled services from 1 May 2007 on one or more of the abovementioned routes without financial compensation, Greece has decided, under the procedure set out in Article 4(1)(d) of Regulation (EEC) No 2408/92, to limit access to each or several of the abovementioned routes to only one carrier for three years and to grant the right to operate those services from 1 May 2007 following an invitation to tender.

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28.10.2006

EN

Official Journal of the European Union

C 260/11

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New national side of euro circulation coins

(2006/C 260/06)

Euro circulation coins have legal tender status throughout the euro area. The Commission publishes all new euro coin designs (1) with a view to informing anyone required to handle coins in the course of their work and the public at large. In accordance with the Council conclusions of 8 December 2003 (2), Member States and countries that have concluded a Monetary Agreement with the Community providing for the issuance of euro circulation coins are allowed to issue certain quantities of commemorative euro circulation coins on condition that not more than one new coin design is issued per country per year and that only the 2-euro denomination is used. These coins have the technical features of normal euro circulation coins, but bear a commemorative design on the obverse national side.

Issuing State: Vatican City State

Subject of commemoration: 5th centenary of the Swiss Pontifical Guard

Factual description of the design: The coin features a Swiss guard taking the solemn oath on the Swiss Guard flag. The inscription ‘GUARDIA SVIZZERA PONTIFICIA’ surrounds the guard, forming a semi-circle which is complemented under the flag by the name of the issuing state ‘CITTÁ DEL VATICANO’. The year 1506 appears on the left side, above the signature of the engraver ‘O. ROSSI’ along the pole of the flag. The year 2006 appears on the upper right side, above the mint mark ‘R’. The twelve stars of the European flag are depicted on the outer ring.

Issue volume: max 100 000 coins

Approximate issue period: November 2006

Edge lettering: 2 ★, repeated six times, alternately upright and inverted.

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(1)  See OJ C 373 of 28.12.2001, pp. 1-30 for a reference to all national sides that were issued in 2002.

(2)  See conclusions of the General Affairs Council of 8 December 2003 on changes in the design of national sides of euro coins. See also Commission Recommendation of 29 September 2003 on a common practice for changes to the design of national obverse sides of euro circulation coins (OJ L 264 of 15.10.2003, p. 38-39).

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28.10.2006

EN

Official Journal of the European Union

C 260/12

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Information communicated by Member States regarding State aid granted under Commission Regulation (EC) No 68/2001 of 12 January 2001, as amended by Commission Regulation (EC) No 363/2004 of 25 February 2004, on the application of Articles 87 and 88 of the EC Treaty to training aid

(2006/C 260/07)

(Text with EEA relevance)

Aid No	XT 27/06
Member State	Germany
Region	Nordrhein-Westfalen
Title of aid scheme or name of company receiving individual aid	‘Promoting the development of employee skills through training cheques’ Training cheques serve to improve the employability of workers among firms and are issued to share the costs of general traning schemes that come under further vocational training
Legal basis	§ 44 Landeshaushaltsordnung des Landes NRW und Durchführungsbestimmungen
Annual expenditure planned or overall amount of individual aid granted to the company	Aid scheme	Annual overall amount	EUR 10 million
		Loans guaranteed
	Individual aid	Overall aid amount
		Loans guaranteed
Maximum aid intensity	In conformity with Article 4(2)-(7) of the Regulation		Yes
Date of implementation	2006
Duration of the scheme or individual aid award	Until 31.12.2007 with additional payment period up to 31.3.2008
Objective of aid	General training		Yes
	Specific training
Economic sectors concerned	All sectors eligible for training aid		Yes
Name and address of the granting authority	Versorgungsamt Aachen, Schenkendorfstr. 2-6, D-52066 Aachen Versorgungsamt Bielefeld, Stappenhorststr. 62, D-33615 Bielefeld Versorgungsamt Dortmund, Rheinische Str. 173, D-44137 Dortmund Versorgungsamt Düsseldorf, Erkrather Str. 339, D-40231 Düsseldorf Versorgungsamt Duisburg, Ludgeristr.12, D-47057 Duisburg Versorgungsamt Essen, Kurfürstenstr. 33, D-45138 Essen Versorgungsamt Gelsenkirchen, Vattmannstr. 2-8, D-45879 Gelsenkirschen Versorgungsamt Köln, Boltensternstr. 10, D-50735 Köln Versorgungsamt Soest, Heinsbergplatz 13, D-59494 Soest
Large individual aid grants	In conformity with Article 5 of the Regulation		Not applicable, as max. EUR 750 is granted per training cheque

Aid No	XT 32/06
Member State	United Kingdom (and Republic of Ireland)
Region	32 Counties of the island of Ireland — Northern Ireland and Republic of Ireland
Title of aid scheme or name of company receiving individual aid	Focus Roll-out
Legal basis	British/Irish Agreement Act 1999 Section 2.3 Part 7 of Annex 2 of the Act empowers InterTradeIreland to invest, lend or grant aid for the purpose of its function
Annual expenditure planned under the scheme or overall amount of individual aid granted to the company	Aid scheme	Annual overall amount 2006	GBP 0,422 million
		Annual overall amount 2007	GBP 0,253 million
		Total	GBP 0,675 million
		Loans guaranteed
	Individual aid	Overall aid amount
		Loans guaranteed
Maximum aid intensity	In conformity with Article 4(2)-(7) of the Regulation		Yes
Date of implementation	June 2006
Duration of scheme or individual aid award	June 2007 The grant is committed prior to 31 December 2006 then payments against this commitment could continue until 31 December 2007. Scheme will run from 2006 to 2007 (Individual companies will be eligible for assistance for up to a maximum of 18 months)
Objective of aid	General training		Yes
	Specific training
Economic sectors concerned	All sectors eligible for training aid		Yes
Name and address of the granting authority	InterTradeIreland
	The Old Gasworks Kilmorey Street Newry Co.Down BT34 2DE United Kingdom
Large individual aid grants	In conformity with Article 5 of the Regulation		Yes

Aid No	XT 34/06
Member State	(United Kingdom and) Republic of Ireland
Region	32 Counties of the island of Ireland — Northern Ireland and Republic of Ireland
Title of aid scheme or name of company receiving individual aid	Focus Roll-out
Legal basis	British/Irish Agreement Act 1999 Section 2.3 Part 7 of Annex 2 of the Act empowers InterTradeIreland to invest, lend or grant aid for the purpose of its function
Annual expenditure planned under the scheme or overall amount of individual aid granted to the company	Aid scheme	Annual overall amount 2006	GBP 0,422 million
		Annual overall amount 2007	GBP 0,253 million
		Total	GBP 0,675 million
		Loans guaranteed
	Individual aid	Overall aid amount
		Loans guaranteed
Maximum aid intensity	In conformity with Article 4(2)-(7) of the Regulation		Yes
Date of implementation	June 2006
Duration of scheme or individual aid award	June 2007 The grant is committed prior to 31 December 2006 then payments against this commitment could continue until 31 December 2007. Scheme will run from 2006 to 2007 (Individual companies will be eligible for assistance for up to a maximum of 18 months)
Objective of aid	General training		Yes
	Specific training
Economic sectors concerned	All sectors eligible for training aid		Yes
Name and address of the granting authority	InterTradeIreland
	The Old Gasworks Kilmorey Street Newry Co.Down BT34 2DE United Kingdom
Large individual aid grants	In conformity with Article 5 of the Regulation		Yes

Aid No	XT 36/06
Member State	Latvia
Region	The whole territory of Latvia
Title of aid scheme or name of company receiving individual aid	National program ‘Support for Training, Re-training, and Raising Qualification of Employed’
Legal basis	1) Vienotais programmdokuments, 2004.-2006. (www.esfondi.lv); 2) Vienotā programmdokumenta papildinājums, 2004.-2006. (www.esfondi.lv)
Annual expenditure planned under the scheme or overall amount of individual aid granted to the company	Aid scheme	Annual overall amount	2006–EUR 802`797 2007–EUR 2`309`031 2008-EUR 427`781 Total: EUR 3`539`609
		Loans guaranteed
	Individual aid	Overall aid amount
		Loans guaranteed
Maximum aid intensity	In conformity with Article 4(2)-(7) of the Regulation		Yes
Date of implementation	01/07/2006
Duration of scheme or individual aid award	Until 31/07/2008
Objective of aid	General training		Yes
	Specific training		Yes
Economic sectors concerned	Limited to specific sectors		Yes
	Manufacture of wood and wood products (NACE DD), Forestry and logging (NACE A 02.01)		Yes
	Manufacture of basic metals and fabricated metal products (NACE DJ), Manufacture of machinery and equipment n.e.c. (NACE DK)		Yes
	Manufacture of electrical and optical equipment (NACE DL), Manufacture of machinery and equipment n.e.c. (NACE DK), Telecommunications (NACE I 64.20)		Yes
	Construction (NACE F)		Yes
	Computer and related activities (NACE K 72)		Yes
Name and address of the granting authority	Latvijas Investīciju un attīstības aģentūra
	Pērses iela 2 LV-1042 Rīga
Large individual aid grants	In conformity with Article 5 of the Regulation		Yes

Aid No	XT 37/06
Member State	Italy
Region	Provincia Autonoma di Trento
Title of aid scheme or name of company receiving individual aid	Financing of employee training activities under Objective 3, Measure D1 of the 2006 European Social Fund
Legal basis	Deliberazione della Giunta Provinciale n. 1354 di data 30.6.2006, pubblicata sul Bollettino della Regione Trentino Alto Adige dell'11.7.2006 n. 28
Annual expenditure planned under the scheme	Aid scheme	Annual overall amount 2006	EUR 4,48 million
		Loans guaranteed
	Individual aid	Overall aid amount
		Loans guaranteed
Maximum aid intensity	In conformity with Article 4(2)-(7) of the Regulation		Yes
Date of implementation	11.7.2006
Duration of scheme or individual aid award	Until 31.12.2006
Objective of aid	General training		Yes
	Specific training		Yes
Economic sectors concerned	All sectors eligible for training aid		Yes
Name and address of the granting authority	Provincia Autonoma di Trento Dipartimento Politiche Sociali e del Lavoro Ufficio Fondo Sociale Europeo
	via Giusti, 40 I-38100 Trento
Large individual aid grants	In conformity with Article 5 of the Regulation The measure excludes awards of aid, or requires prior notification to the Commission of awards of aid, if the amount of aid granted to one enterprise for a single training project exceeds EUR 1 million		Yes

Aid No	XT 61/05
Member State	United Kingdom
Region	INTERREG 111A — Welsh NUTS 111 eligible counties of Gwynedd, Anglesey, Carmarthenshire, Ceredigion, Conwy & Pembrokeshire
Title of aid scheme or name of company receiving individual aid	Wales — Ireland Regional E — Business Development (WIRED)
Legal basis	Council Regulation (EC) No. 1260/1999
	The Structural Funds (National Assembly for Wales) Regulations 2000 (No/906/2000)
	The Structural Funds (National Assembly for Wales) Designation 2000
Annual expenditure planned under the scheme or overall amount of individual aid granted to the company	Aid scheme	Annual overall amount	GBP 131 484
		Loans guaranteed
	Individual aid	Overall aid amount
		Loans guaranteed
Maximum aid intensity	In conformity with Article 4(2)-(7) of the Regulation		Yes
Date of implementation	From 5.10.2005.
Duration of scheme or individual aid award	Until 31.12.2006
Objective of aid	General training		Yes
	Specific training		No
Economic sectors concerned	All sectors eligible for training aid		Yes
Name and address of the granting authority	National Assembly for Wales
	C/o Welsh European Funding Office Cwm Cynon Business Park Mountain Ash CF45 4ER United Kingdom
Large individual aid grants	In conformity with Article 5 of the Regulation		Yes

Aid No	XT 63/05
Member State	Ireland
Region	INTERREG 111A — Welsh NUTS 111 eligible counties of Gwynedd, Anglesey, Carmarthenshire, Ceredigion, Conwy & Pembrokeshire
Title of aid scheme or name of company receiving individual aid	Wales — Ireland Regional E-Business Development (WIRED)
Legal basis	Council Regulation (EC) No.1260/1999
	The Structural Funds (National Assembly for Wales) Regulations 2000 (No/906/2000)
	The Structural Funds (National Assembly for Wales) Designation 2000
Annual expenditure planned under the scheme or overall amount of individual aid granted to the company	Aid scheme	Annual overall amount
		Loans guaranteed
	Individual aid	Overall aid amount	GBP 131 400
		Loans guaranteed
Maximum aid intensity	In conformity with Article 4(2)-(7) of the Regulation		Yes
Date of implementation	From 1.4.2005
Duration of scheme or individual aid award	Until 30.9.2006
Objective of aid	General training		Yes
	Specific training		No
Economic sectors concerned	All sectors eligible for training aid		Yes
Name and address of the granting authority	National Assembly for Wales
	C/o Welsh European Funding Office Cwm Cynon Business Park Mountain Ash CF45 4ER United Kingdom
Large individual aid grants	In conformity with Article 5 of the Regulation		Yes

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28.10.2006

EN

Official Journal of the European Union

C 260/18

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Corrigendum to the Explanatory notes to the Combined Nomenclature of the European Communities

( Official Journal of the European Union C 50 of 28 February 2006 )

(2006/C 260/08)

On page 238, Figure 1 is replaced by the following Figure 1:

On page 253, the illustration at the bottom of the page is replaced by the following illustration:

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