Brussels, 14/02/2012 (Agence Europe) - Twelve member states (Belgium, Bulgaria, Cyprus, Denmark, Spain, Finland, France, Hungary, Italy, Slovenia, Sweden and the United Kingdom) will be subject to an in-depth macroeconomic analysis. This is the main result of the first report from the application of a new early warning mechanism on macroeconomic imbalances, which was published by the European Commission on Tuesday 14 February. If this detailed analysis points to severe imbalances, the European institution may open specific infringement proceedings against the countries in question, under either the preventative or the corrective plank of the revised stability and growth pact. The Eurogroup and the Ecofin Council will hold an exchange of views on this report. The results of the in-depth analyses, together with any recommendations made, will be announced in May or June of this year.
The “raison d'être” of this exercise is to tackle “risky and potentially harmful macroeconomic imbalances” throughout the European Union and to initiate a specific dialogue with the member states, said the commissioner in charge of the euro, Olli Rehn. He pointed out that the Commission's scoreboard contained “10 indicators” making it possible to detect imbalances in areas such as “competitiveness, export performance, public current accounts, private indebtedness and the real estate market”.
For Spain, the Commission wants to have a look at the structural reasons for the high level of unemployment and problems prevailing on the real estate market. Speaking to the press, Rehn declined to draw any “premature conclusions” regarding the decision to be made by the Commission on the budgetary situation of the country when it presents its spring economic forecasts in late February. He favourably welcomed the commitment of Mariano Rajoy's government to clean up the public finances. The Spanish deficit for 2011 is likely to stand at 8% of GDP instead of the 6% anticipated. For Italy, the analysis will focus on the high level of public indebtedness and the low growth potential. The Commission will also look at the reasons explaining the recurrent market losses observed in Belgium, France and the United Kingdom.
Why are you not talking about Germany, which has accumulated extremely high surpluses, which is partly responsible for the imbalances within the eurozone? The commissioner went no further than to refer to Germany's good performances. However, he said that the country had lost some of its export market share (down 8% in five years), largely due to competition from the emerging Asian countries, together with high public indebtedness (83% of GDP). He said that “domestic consumption” will be the main element of German growth and will help to reduce the country's surpluses in terms of current account. The Portuguese Socialist Elisa Ferreira strongly criticised the Commission, which has “deliberately failed to produce an overall vision of the imbalances between the countries of the eurozone (…). Its report focuses on the countries with deficits and omits the main cause of imbalance, which is the German economy”, she said. (MB/transl.fl)