
Article 1 
In Article 3 of Implementing Decision 2011/344/EU, paragraphs 7 to 9 are replaced by the following:
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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 5,5 % of GDP in 2013. For the calculation of this deficit, the possible budgetary costs of bank support measures in the context of the government’s financial sector strategy shall not be taken into account. The consolidation measures included in the 2013 budget and supplementary budget shall be implemented rigorously throughout the rest of the year. In addition, should further slippages arise in budgetary execution, the Government shall implement additional corrective measures;
(b) Portugal shall continue implementing its privatisation programme;
(c) Portugal shall complete the implementation of the strategy of shared services in public administration;
(d) 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 ensure the implementation of the multiyear action plan for hospital reorganisation;
(e) following the adoption of the amendments to the Law 6/2006 on new urban leases and the decree law which simplifies the administrative procedure for renovations, Portugal shall undertake a comprehensive review of the functioning of the housing market;
(f) Portugal shall develop a nationwide land registration system to allow a more equal distribution of benefits and costs in the execution of urban planning;
(g) while respecting the Constitutional Court’s ruling of 26 September 2013, Portugal shall devise and implement alternative reform options of the labour market with similar effects to those that were declared unconstitutional in that ruling;
(h) Portugal shall promote wage developments which are consistent with the objectives of fostering job creation and improving firms’ competitiveness with a view to correcting macroeconomic imbalances. Over the Programme period, any increase in minimum wages shall take place only if justified by economic and labour market developments;
(i) Portugal shall continue to improve the effectiveness of its active labour market policies in line with the results of the assessment report and the action plan to improve the functioning of the public employment services;
(j) Portugal shall continue to implement the measures set out in its action plans to improve the quality of secondary and vocational education and training; in particular the Government shall present plans to make the funding framework of schools more effective and the professional schools of reference shall be established;
(k) Portugal shall complete the adoption of the outstanding sectorial amendments necessary to fully implement Directive 2006/123/EC of the European Parliament and the Council;
(l) the Government shall submit to the Portuguese Parliament the professional bodies’ amended statutes;
(m) Portugal shall approve the corresponding amendments to the bylaws of the National Regulatory Authorities;
(n) Portugal shall publish quarterly reports on recovery rates; duration and costs of corporate insolvency cases; duration and cost of tax cases and on the clearance rate of enforcement court cases;
(o) Portugal shall improve the business environment by completing pending reforms on the reduction of administrative burden (fully operational 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 ports’ governance system, including the overhaul of port operation concessions;
(q) Portugal shall implement the measures enhancing the functioning of the postal and telecommunications sectors;
(r) Portugal shall implement the measures enhancing the functioning of the transport system;
(s) Portugal shall implement the measures eliminating the energy tariff debt;
(t) Portugal shall ensure that the new legal and institutional PPP framework is applied and the PPP road contracts continue to be renegotiated in line with the strategic plan presented by the Government and with the regulatory framework revision, in order to obtain substantial fiscal gains, particularly in 2013;
(u) Portugal shall continue to focus on measures to combat tax fraud and evasion and strengthen taxpayers’ compliance.
8. Portugal shall adopt the following measures during 2014, in line with specifications in the Memorandum of Understanding:
(a) the general government deficit shall not exceed 4 % of GDP in 2014. For the calculation of this deficit, the possible budgetary costs of bank support measures in the context of the government’s financial sector strategy shall not be taken into account. To achieve this objective Portugal shall deliver consolidation measures worth 2,3 % of GDP, primarily through the 2014 Budget Law. Measures shall be mainly of a permanent nature and tilted towards the expenditure savings side;
(b) the consolidation package shall build on the expenditure-reducing measures that were prepared in the framework of the public expenditure review. Overall, the amount of these measures shall add up to 1,8 % of GDP in 2014 and shall include:
((i)) limiting outlays on the public wage bill by reducing the size of the public-sector work force while changing its composition towards higher-skilled employees, notably through a requalification programme and a voluntary redundancy scheme; further convergence of public and private sector work rules (including the increase in working hours and reduction in holiday entitlements) and the introduction of a single wage scale as well as the streamlining of wage supplements. Beneficiaries’ contributions to the special health insurance schemes shall be increased and thereby contribute to enhance the equity and efficiency of public spending;
((ii)) reforms of the pension system by an increase in the statutory retirement age via changes to the sustainability factor; an alignment of the rules for pension benefit calculations between the civil servants’ pension regime (CGA) and the general pension system, while protecting benefits below minimum thresholds; and streamlining survivors’ pensions of both CGA and the general pension regime in cases where these accumulate with other pensions;
((iii)) savings in intermediate consumption and expenditure programmes across line ministries. In view of political and legal risks, some of the measures may be partly or fully replaced by others of equivalent size and quality;
(c) the public expenditure review package shall be completed with other permanent revenue measures which aim to further improve the efficiency and equity of the current tax and benefit structure (worth 0,4 % of GDP). In particular, the taxation on expenses related to company cars shall be increased and environmental and health-related taxation shall be improved by changing the taxation of passenger diesel cars and by increasing excises on tobacco and on alcoholic beverages. Tax exemptions in property taxation for pension funds and real estate funds shall be reduced. The caps to the social security contributions of members of statutory bodies shall be removed. A special levy on the energy sector shall be imposed curbing excessive rents from the energy sector. Part of the income generated by this levy shall be used to reduce the tariff debt. Online gambling licences shall be sold with a view to the regularisation of this market and this activity shall also be taxed. A special fee on media spectrum shall be introduced and the levy on financial institutions shall be increased. Moreover, a number of one-off measures shall be implemented, more than offsetting the costs arising from the one-off upfront payments related to the introduction of the mutual agreement redundancy scheme in the public sector. These include the transfer of the CTT health fund to the government sector, the sale of a port and silos concessions as well as special dividends from the sale of excessive oil reserves from a public company;
(d) Portugal shall present a report with the following objectives:
((i)) to identify overlaps of services and jurisdictions and other sources of inefficiencies between the central and the local levels of government; and
((ii)) to reorganise the network of decentralised services of ministries mainly through the ‘Lojas do Cidadão’ (administration and utilities single points of contact) network and other approaches, encompassing more efficient geographical areas and intensifying the use of shared services and digital government;
(e) 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 ensure the implementation of the multiyear action plan for hospital reorganisation;
(f) Portugal shall implement the plan to create an independent gas and electricity logistics operator company;
(g) Portugal shall implement the measures enhancing the functioning of the transport system;
(h) Portugal shall assess the impact of the optional VAT cash accounting regime;
(i) Portugal shall carry out an inventory and an analysis of the cost of regulations that are likely to have a higher impact on economic activity.
9. With a view to restoring confidence in the financial sector, Portugal shall aim to maintain an adequate level of capital in its banking sector and ensure an orderly deleveraging process in compliance with the deadlines set in the Memorandum of Understanding. 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) monitor the banks’ transition to the new capital rules as laid down in the Capital Requirements Directive IV package (CRD IV) and ensure that capital buffers remain commensurate with the challenging operating environment;
(b) advise banks to strengthen their collateral buffers on a sustainable basis;
(c) ensure a balanced and orderly deleveraging of the banking sector, which remains critical in permanently eliminating funding imbalances and reducing the reliance on Eurosystem funding in the medium-term. Banks funding and capital plans shall be reviewed quarterly;
(d) encourage the diversification of financing alternatives for the corporate sector, and in particular SMEs, through an array of measures aiming to improve their access to the capital markets;
(e) continue to streamline the state-owned CGD group;
(f) outsource the management of the BPN credits currently held by Parvalorem to the firms selected through the bidding process with a mandate to gradually recover the assets; and ensure timely disposal of the subsidiaries of, and the assets in, the other two state-owned special purpose vehicles;
(g) on the basis of the proposals to encourage the diversification of financing alternatives to the corporate sector, develop and implement solutions that provide financing alternatives to traditional bank credit for the corporate sector; and assess the scope for improving the performance and governance of the existing government-sponsored credit lines building on the results of the recent external audit and the submitted roadmap;
(h) analyse banks’ recovery plans and issue guidelines to the system on recovery plans and prepare resolution plans on the basis of the reports submitted by the banks. The Government shall submit to the Portuguese Parliament the necessary amendments to the recapitalisation law reflecting the Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis;
(i) implement the framework for financial institutions to engage in out-of-court debt restructuring for households, smoothen the application for restructuring of corporate debt and implement an action plan to raise public awareness of the restructuring tools;
(j) prepare quarterly reports on the implementation of the new restructuring tools; on the basis of the recently conducted survey, explore alternatives to increase the successful recovery of companies adhering to the PER (the Special Revitalisation Procedure for companies in serious financial distress) and the SIREVE (the Companies’ Recovery System through Extrajudicial Agreements for companies in a difficult economic situation or imminent or actual insolvency).'.
Article 2 
This Decision shall take effect on the day of its notification.
Article 3 
This Decision is addressed to the Portuguese Republic.
Done at Brussels, 19 November 2013.
For the Council
The President
L. LINKEVIČIUS