TIMMINT MI - Social Protection Weekly Report (Issue 2014-19)

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GLOBAL SOCIAL PROTECTION WEEKLY REPORT Issue 2014 Week 19 05 to 11 of May, 2014

Transcript of TIMMINT MI - Social Protection Weekly Report (Issue 2014-19)

Page 1: TIMMINT MI - Social Protection Weekly Report (Issue 2014-19)

GLOBAL SOCIAL PROTECTION

WEEKLY REPORT

Issue – 2014 Week 19

05 to 11 of May, 2014

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From: TIMMINT

Market Intelligence

To:

Whom it may concern

Subject:

Weekly Status Global Social

Protection Industry.

Issue Year 2014, Week 19

Report Sections Page

SOCIAL INSURANCE 3

SOCIAL ASSISTANCE 7

LABOR MARKET

INTERVENTION 11

Latest Publications 13

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Disclaimer:

This report was prepared as an

account of work sponsored by the

Company. Certain information has

been obtained from published

sources and is given as of the dates

specified. All the information in this

publication is verified to the best of

the authors’ and publisher’s ability,

but neither the company nor the

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use of the information. All such

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without notice.

5

U.K. Pension fears for rising

number of self-employed

Does high levels of self-employment affects a nation’s pension fund? If so, how should this problem be addressed?

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Number of Pension

Funds

1,000 in 1992

382 Today

300 within a few

years

Money saved up in

its workplace

pension fund

UK €1.9trillion

Dutch €950 Billion

Like the UK, the

Netherlands is

moving from a

system of defined

benefits, where

pensions are

guaranteed, to a

system of defined

contributions,

where they depend

on market returns.

SOCIAL INSURANCE

Dutch pension funds grapple with permanent revolution

utch regulators, commentators and the funds themselves all agree that the number of

pension funds in the country – which has already fallen from over 1,000 in 1992 to 382 today

– is set to contract further. According to an estimate from the Dutch central bank, DNB, which

regulates the funds, the number could drop below 300 within a few years.

DNB has written to 60 small and medium funds, it said last month, urging them to consider their “long-

term viability”. The regulator added that it “may ask more funds to examine the sustainability of their

business models” this year, and “take appropriate measures”.

The UK has about twice as much money saved up in its workplace pension funds – €1.9 trillion,

compared with the Dutch €950 billion – but spread out over tens of thousands of individual funds. The

prospect of further consolidation among Dutch pension funds could lead to job cuts among actuaries,

investment consultants and administrators. But it could also prefigure a tougher stance on fees and

costs, with big funds able to gang up on asset managers and pressure them for the best deal.

Late last month, the €115 million pension fund for Dutch Space, an aerospace company involved in

making the European Space Agency’s Vega rockets, became the latest to follow the trend. It announced

it would merge into the larger Pensioenfonds Metalektro, or PME, an industry-wide pension fund for

the metalworking and engineering industries, which has €34 billion under management.

Koos Haakma, transition manager at PME, said consolidation among funds was “already going pretty

fast, and it will go faster”. He said many international companies with a Dutch subsidiary had opted out

of running a separate fund in the Netherlands, and instead were merging into an industry scheme such

as his own. In recent years, German electronics group Siemens and the industrial conglomerate Stork

have both merged their Dutch funds into PME.

According to Jacqueline Lommen, director of European pensions at Dutch asset manager Robeco,

pension funds have come under significant cost and regulatory pressure in recent years. The scheme

mergers are taking place against a wider backdrop of change, as the nature of pensions themselves also

shifts. But unlike the UK, where companies unilaterally shut DB schemes and opened DC plans for new

joiners, in the Netherlands, the existing pension funds are being changed, slowly and not without

considerable controversy, from DB to DC.

Pension reforms

Initially, the Dutch government proposed giving pension funds two options to reform themselves; first,

to offer a non-inflation linked “nominal” pension as a firm guarantee, or second, to offer a “real” or

inflation-linked pension as a non-guaranteed ambition. PFZW came out strongly in favour of the latter,

only to find the government then retreated.

Niels Kortleve, innovation manager at PGGM Investments, the asset manager for the PFZW scheme,

said: “The ministry of social affairs has proposed a ‘middle of the road’ approach, which is closer to the

nominal position. It’s not as ‘hard’ a nominal contract as previously proposed, as some solvency rules

have been relaxed slightly.”

Nevertheless, the option of more radical DC reform is not entirely off the table, he said. With support

from the ministry, the pensions industry has set up a working group to examine the question.

D

Source: efinancialnews.com

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00

public pensions

return

32% Of the Agency’s

investment is in

listed equities

12% In Real Estate

U.S. public pensions outperform peers in 1st quarter –

data

.S. public pension funds returned a median 1.87 percent in the first quarter of 2014, slightly

outperforming the 1.66 percent returns for the larger universe of institutional investment

plans, according to a report to be released on Monday. The results this year are far below the

first quarter of last year, when public pensions returned a median 5.2 percent.

However, the annual median return for public funds remains high, at 12.94 percent, after the first

quarter of 2014, the data from the Wilshire Trust Universe Comparison Service showed. Double-digit

annual returns in 2013 began to give states' and cities' retirement systems a chance to start

implementing reforms to fix gaping deficits.

Wilshire's report covers nearly 1,700 different plans - including foundations, endowments and

corporate funds - representing more than $3.5 trillion in assets.

"While this is the third positive quarter in a row, returns remain below the classic 1.82

percent or higher quarterly return target required for an annualized 7.5 percent return,"

said Wilshire Managing Director Robert Waid, referring to the overall results.

By comparison, the Wilshire 5000 Total Market Index returned 2.04 percent, while the Barclays U.S.

Aggregate Index returned 1.84 percent for the quarter.

Source: reuters.com

Saudi pension agency eyes property investment, no plan

to sell stocks

he Public Pension Agency (PPA), Saudi Arabia's second-largest pension fund, plans to boost its

investments in real estate and has no immediate plans to exit any of its holdings in Saudi

companies, the PPA's governor said.

The agency manages retirement schemes for Saudi nationals. It is one of the major investors in the local

equity market, with 32 percent of its investments in listed equities and about 12 percent in real estate.

It is also a major fixed income investor. The PPA's governor Mohammad Al Kharashi said the fund paid

out an average of 4 billion riyals ($1.1 billion) a month to about 1.1 million retirees and their

dependants.

On Monday the kingdom's Shoura Council, a body that advises the government on policy, suggested

raising the retirement age for government employees to 62 from 60, a step which could reduce

financial pressure on the PPA. However, it is not clear if the suggestion will be adopted, and Kharashi

said he did not know when the change might be implemented.

The PPA has not recently disclosed figures for its size but in its annual report published in May 2013, it

said its local stock market holdings in 2012 reached 41.8 billion riyals.

The agency is the major backer of the King Abdullah Financial District, a huge real estate project, in

Riyadh; Kharashi said total investment in the project had reached 31 billion riyals and that the first

phase should be completed by the end of this year, after which leasing could begin.

U

T

In Q1 2014

In Q1 2013

Is the average paid per month to retirees

Retirement age

suggested to

increase

Source: reuters.com

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1/7 Workers is

now self-employed

650,000 in 2008

4,500,000 Now

31% Contributed

to a pension

U.K. Pension fears for rising number of self-employed

igher levels of self employment have become a permanent feature of the UK economy as a

result of Britain’s ageing workforce and a greater desire for Britons to “work for

themselves”. The number of people who are self employed has grown by 650,000 since the

2008 financial crisis, to 4.5m, meaning one in seven workers is now self employed.

While some of the shift towards self-employment has been caused by cyclical factors, the Resolution

Foundation said 73pc of workers had chosen to become self-employed. “The high self-employment

numbers are here to stay,” said Laura Gardiner, a senior policy analyst at Resolution Foundation.

The rise in self employment has attracted attention from the Bank of England, where policymakers

have argued over whether the increase reflects structural changes in the UK economy or “disguised

labour market slack” because many of these workers would prefer to be working full-time.

While the Foundation said there was less slack in the economy caused by self-employment than some

policymakers believed, it said underemployment among these workers was “marginally worse than for

employees”, representing a reversal of the pre-crisis trend.

The Foundation found evidence that self-employment might be being used as an alternative to

retirement. Those aged 50 and over have accounted for more than 70pc of the increase in the

number of self-employed since 2008, according to the Office for National Statistics.

The Foundation said the increase in self-employment also presented a “worrying picture of the

security and vulnerability of self employed people”, who have traditionally saved less for retirement

than employees. According to its analysis, only 31pc of self-employed people contributed to a

pension, compared with 52pc of employees.

While the it said the introduction of the single tier pension would help to address some concerns, it

said the Government needed to do more to support self-employed workers. “We have concerns about

the financial security of the self-employed,” said Ms Gardiner. “We think policy around pensions and

access to credit needs to understand these workers better than it has done in the past.

“We’ve found some pretty clear evidence that they are not saving for

retirement to the same extent as employees, and obviously with auto-

enrolement coming in, that gap’s probably only going to get wider.”

Source: telegraph.co.uk

H compared with

52% of

employees

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Wales and U.K.: Pensions review threatens to cut

£420m revenues

he recommendations, if implemented, would mean that revenues big enough to sustain a mid-

sized manager the size of F&C Investments nearly twice over would vanish from active

managers as funds switch into lower-cost passive products such as exchange-traded funds.

Publication of the review last week confirmed an exclusive report in Financial News in January and has

ignited a new debate on the value of active fund management.

The review, written by consultants Hymans Robertson,

aims to improve efficiency in the 89 local government

pension schemes in England and Wales, which manage

£178 billion on behalf of 4.5 million members.

The saving would be made up of £230 million from the

greater use of passive investment funds for listed equities

and bonds and £190 million from reducing costs resulting

from the buying and selling of assets in the portfolio,

known as portfolio turnover costs.

Linda Selman, head of local government pensions scheme investments at Hymans Robertson,

said: “It’s quite important to think about the number of fund managers the [local government]

funds currently employ. There are a lot of them, which means that when you average out their

performance, it adds no value in aggregate. The Investment Management Association, which

represents fund managers it would make further comment “in due course”.

The report was also criticised for not addressing key issues. Andrew Kirton, European/Pacific

investments leader at Mercer, said the report risked taking attention away from the most serious issue

in local government pension provision – the estimated deficit of more than £70 billion – which meant a

fundamental review of benefits or contributions was required.

He added: "“Many funds are exposed to considerable interest rate and inflation risks, which pose a

significantly bigger threat to funding status than the issues the government has chosen to address.”

Tony Deane, chairman of the Wiltshire Pension Fund, which manages more than £1.3 billion for 31,500

members, said he did not believe that a complete allocation to passive strategies was the best solution.

He said: “We need some uplift in our assets and I don’t think we are going to get that from tracker

funds.”

Correction: An earlier version of this article incorrectly stated that The Investment Management

Association had commented on funds' exposure to interest rate and inflation risks. This is incorrect. The

quote was actually from Mercer's Andrew Kirton and the piece has been updated to reflect this..

Source: www.pionline.com

T

Deficit

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5 months battles

displaced hundreds

of thousands of

civilians

1/3 of the

population is

experiencing

emergency levels

of food insecurity

SOCIAL ASSISTANCE

Ban welcomes agreement to resolve South Sudan crisis,

demands end to hostilities

Secretary-General Ban Ki-moon has welcomed the signing of an agreement to resolve the crisis in South

Sudan, and demanded an immediate cessation of hostilities.

The agreement was signed in the Ethiopian capital, Addis Ababa, by South Sudan's President, Salva Kiir,

and former Vice President Riek Machar, whose supporters have waged a five-month battle that has

displaced hundreds of thousands of civilians and led to gross human rights violations by both sides.

Mr. Ban, in a statement issued by his spokesperson,

demanded that the parties “immediately translate

these commitments into action on the ground, in

particular the cessation of all hostilities.”

He commended the Intergovernmental Authority on

Development, and in particular its chair, Prime Minister

Hailemariam Desalegn of Ethiopia, for its ongoing efforts

to mediate a peaceful and sustainable end to the

conflict.

Meanwhile, the UN Food and Agriculture Organization (FAO) warned today that one-third of the

population of South Sudan is now experiencing emergency levels of food insecurity, and that some

areas of the country to appear to be at high risk of famine in the coming months.

The latest food security analysis carried out in South Sudan indicates that, as a result of conflict,

displacement, destroyed markets and disrupted livelihoods, food security has deteriorated at an

alarming rate since the outbreak of conflict in December 2013.

Populations, particularly in the three most conflict-affected states of Unity, Upper Nile and Jonglei,

need urgent humanitarian assistance to save lives and livelihoods, FAO stressed.

Source: UN.org

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Netherlands Aid to

Rwanda

€32,000,000

Between 2014 and

2017

€5,000,000/year to

justice sector

€12,000,000

channeled through

Netherlands-

Affiliated NGOs

South Sudan: UN Calls for Immediate Aid Relief

he United Nations' top official in South Sudan has called for the immediate influx of

emergency aid following the signing of a cease-fire agreement to end months of ethnic

fighting.On his Twitter account Saturday, Toby Lanzer said roads need to be opened for truck

convoys and rivers need to be accessible for barges to deliver "emergency relief for people in

need now."

President Salva Kiir and rebel leader Riek Machar met face-to face Friday for the first time since

violence erupted five months ago, praying together in Addis Ababa, Ethiopia before signing the

agreement.

The two men pledged to cease all hostilities and open up humanitarian corridors. They also agreed that

a transitional government offers the best chance to take the country forward. There were no

immediate details on who would be part of an interim administration. Kiir said the army will implement

the agreement without fail. Machar said he was satisfied with the deal and that if the two sides

seriously engage in dialogue, they can resolve the problem.

Negotiations have dragged on for several months with little progress, while violence has killed

thousands and displaced more than 1.2 million people.

U.S. Secretary of State John Kerry said the agreement could mark a breakthrough for the future of

South Sudan and urged both sides to swiftly implement it. Kerry and UN Secretary-General Ban Ki-

moon had both visited South Sudan in the past week, as part of an international push to stop the

fighting there.

In a report released Thursday, the UN said both the South Sudanese government and the rebels may

have committed crimes against humanity. Amnesty International said its researchers saw a mass grave

in the town of Bor containing as many as 530 bodies. The unrest was sparked by a power dispute

between Kiir and Machar, his former deputy, who was fired in July.

Source: www.voanews.com

Rwanda: Netherlands Resumes Aid to Rwanda

etherlands has resumed its Aid to Rwanda. The country's Minister for Development

cooperation Lilianne Ploumen has announced. In 2012, Netherlands and other European

Countries froze Aid to Rwanda based on the pretext that the country was involved in

facilitating M23 rebel group in the Democratic Republic of Rwanda (DRC).

However, while announcing her Country's new decision before the Parliament, Netherlands Minister

Ploumen said that the decision was right given Rwanda's exceptional efforts in contributing to Peace

and stability in the region.

Netherlands Aid to Rwanda totals to €32million (Approximagtely Rwf32.272billion), with a big portion

expected to be allocated to Justice Sector in the next four years. According to the aid structure,

€5million will be allocated to Rwanda's Justice Sector every year totaling to €20million between 2014

and 2017. The remaining €12million will be channeled through Netherlands-Affiliated NGOs operating

in the Country.

Source: newsofrwanda.com

T

N

Killed

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2,200,000 In need

of humanitarian aid

1/3 of the schools

have been attacked

in recent months

3/10 million $

Of aids needed to

help children

resume their

learning have been

received so far

UNICEF and partners say education system in Central

African Republic ‘on its knees’

ore than half way through the 12-month school year, almost two thirds of schools in the

conflict-ridden Central African Republic (CAR) remain closed, according to a recent survey

by the United Nations Children’s Fund (UNICEF) and its partners.

“The education system is literally on its knees,” said

Souleymane Diabaté, UNICEF Representative in CAR.

“Many teachers have not been paid for months; there

are no textbooks; the little infrastructure that existed

before the crisis has been damaged.”

Fighting in CAR has taken on an increasingly sectarian

nature following a 2012 rebel-led coup and has since

become more brutal with reports of ongoing human

rights violations and reprisal clashes between largely

Christian anti-balaka and mostly Muslim Séléka rebels that have displaced hundreds of thousands of

people both inside and outside the country, and left 2.2 million in need of humanitarian aid.

The crisis has also disrupted two school years since the end of 2012 and many families are still too

scared to send their children back to classes, UNICEF noted in a news release.

The survey carried out in February paints a grim picture. On average, schools have only been open for

four weeks since October 2013 due to the destruction of classrooms, the slow return of teachers to

duty posts and delayed payment of teachers’ salaries.

A third of the 355 schools surveyed have been attacked in recent months – struck by bullets, set on fire,

looted or occupied by armed groups. Meanwhile, enrolment figures dropped drastically – one in three

children who were enrolled in the last school year did not return this year.

“Families, homes, stability – so much has been taken from children

during this crisis,” said Mr. Diabaté. “They cannot be robbed of

education, their best hope for a better and more peaceful future.”

UNICEF is supporting the Ministry of Education’s efforts to provide school supplies, restore looted

schools and offer teacher training.

In areas where insecurity has hindered the resumption of educational activities, including the capital

Bangui, UNICEF and partners set up nearly 120 temporary learning spaces where up to 23,000 children

and adolescents have the opportunity to learn, play and receive psychosocial support.

UNICEF’s education programmes remain grossly underfunded, the agency warned. Only $3 million has

been received so far out of a total $10 million needed to help children resume their learning.

Source: un.org

M

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*Nacala deep

water port is put at

300 million dollars

* 670 million $ of

Promissed aid over

the next 5 years to

Mozambique

Mozambique: 232 Million Dollars of Japanese Aid for

Nacala

he Japanese government is planning to provide about 232 million US dollars - 32 million as a

grant and the rest as loans - for the rehabilitation of the northern Mozambican port of Nacala.

Speaking at a farewell dinner in his honour on Thursday night, the outgoing Japanese

ambassador, Eiji Hashimoto, said this was currently still at the project stage, “but the initiative

is making progress”.

The total cost of rehabilitating the Nacala deep water port is put at 300 million dollars. A funding

agreement worth 84 million dollars was signed between the Mozambican and Japanese authorities in

March. That month the rehabilitation work began, and completion is due in 2017.

The work includes rehabilitating the northern jetty, paving the container parking area, installing

equipment to modernise fuel handling operations, and building a new rail terminal. The contract for

work on the port has been awarded to the Japanese company Penta - Ocean Construction Co Ltd, and

was signed in January,

Hashimoto, who is leaving the country next week, said he was pleased that during his tour of duty he

was able to visit all of Mozambique's 11 province. But he paid special attention to Nampula province,

where Nacala is located, and where JICA (Japanese International Cooperation Agency) has been

concentrating its investments.

“When I arrived, there were five Japanese companies operating in Mozambique”, he recalled. “Now

the number has risen to 11, operating in various spheres of activity”. Hashimoto said he was also

“very happy” with the visit to Mozambique by Japanese Prime Minister Shinzo Abe in January, which

had resulted in a promise of 670 million dollars of aid for Mozambique, spread over five years.

Source: www.poptel.org.uk/mozambique-news

ISSA and CISS sign agreement on social security in the

Americas

he ISSA has signed a new agreement with the Inter-American Conference on Social Security

(CISS) in Geneva on 7 May, with the aim of boosting cooperation between the two

organizations in support of social security administration in the Americas region.

The Memorandum of Understanding provides for strengthened collaboration between the ISSA and the

CISS to promote excellence in social security in the region, in particular through the promotion of the

new ISSA Centre for Excellence in Social Security Administration, and the related ISSA Academy and

ISSA Guidelines.

The Memorandum was signed at the ISSA Secretariat by Mr Hans-Horst Konkolewsky, ISSA Secretary

General, and Mr Juan Alfredo Lozano Tovar, the Secretary General of the CISS. The Memorandum

builds on a long-standing partnership between the two institutions.

The Inter-American Conference on Social Security (CISS) is a technical and specialized international

organization established in 1942 which fosters cooperation among social insurance and social security

administrations in the Americas region.

T

T

Source: ISSA

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Helping the 25

million unemployed

in Europe to get a

job and in

addressing skills

mismatches.

LABOR MARKET INTERVENTION

European Commission welcomes adoption of Decision

to improve cooperation between public employment

services

he European Commission welcomes today's adoption by the EU's Council of Ministers of a

Decision to improve cooperation between public employment services. Member States' public

employment services have a crucial role to

play in helping the 25 million unemployed

in Europe to get a job and in addressing skills

mismatches.

Effective public employment services are essential

for the practical implementation by Member States

of employment policies, such as the Youth

Guarantee, under which Member States ensure that

young people are offered a job, further education, an

apprenticeship or a traineeship within four months

of becoming unemployed or leaving school.

The Decision, proposed on 17 June 2013, aims to help Member States' public employment services to

improve their effectiveness through closer cooperation. It establishes a platform for comparing the

performance public employment services against relevant benchmarks, identifying good practice and

fostering mutual learning.

The network will help Member States to implement the country-specific recommendations on

improving the efficiency and effectiveness of public employment services issued by the Council in the

framework of the EU's annual review of Member States' economic and social policies, the European

Semester.

Each Member State will nominate from the senior management of its Public Employment Service one

member and one alternate member to sit in the Board of the Public Employment Services Network. The

Commission will also appoint one member and one alternate member to the Board.

Source: ec.europa.eu

T

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To help

In the Steel Industry

Total Cost

Commission proposes €3.6 million from Globalisation

Fund to help 1000 redundant workers in Romanian steel

industry

he European Commission has proposed to provide Romania with €3.6 million from the

European Globalisation Adjustment Fund (EGF) to help 1 000 former workers of the steel

products manufacturer SC Mechel Campia Turzii SA and the downstream producer SC Mechel

Reparatii Targoviste SRL to find new jobs.

The measures co-financed by the EGF would help 1 000 workers in finding new jobs by providing

them with:

career guidance and skills assessment,

training,

support to entrepreneurship, and

a variety of allowances.

One of the flagship measures will be to help 250 of the workers to

set up a cooperative enterprise that will manufacture sports

equipment.

The total estimated cost of the package is €7.14 million, of which the EGF would provide half.

Romania applied for support from the EGF following the dismissal of more than 1 500 workers in

Mechel Campia Turzii and in Mechel Reparatii Targoviste in the Cluj region of Romania. The dismissals

were the result of increased competition from steel products manufacturers elsewhere in the world.

The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.

Source: ec.europa.eu

T

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Latest Publications

The table below contains links to the most recent publications (downloadable for free or after payment) related to social

protection, click on the Download Link to view the file:

N: Title Type Source Download Link

1

East Asia Pacific Urged to Adopt Social Protection Policies that Cover More

Workers

PDF World Bank Click Here

1 Analyzing Food Security Using

Household Survey Data PDF World Bank Click Here

2

Transforming Economies: Making industrial policy work

for growth, jobs and development

Book ILO Click Here

3

Beyond Macroeconomic Stability: Structural

Transformation and Inclusive Development

Book ILO Click Here

2

Beyond Macroeconomic Stability: Structural

Transformation and Inclusive Development

Book ILO Click Here

3 Creative Labour Regulation:

Indeterminacy and protection in an uncertain world

Book ILO Click Here

4 Wage-led Growth: An equitable strategy for

economic recovery Book ILO Click Here

6

Investing in children: Breaking the cycle of disadvantage – A

study of national policies (05/05/2014)

PDF European Commission Click Here

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