Brussels, 28/11/2014 (Agence Europe) - The member states have continued their progress in correcting their macro-economic imbalances, but have been hindered in their action by the slowness of recovery and the weak level of inflation, the European Commission said on 28 November.
As these imbalances continue to be a source of serious concern, it is keeping 14 countries in which imbalances were identified in 2013 (Belgium, Bulgaria, Germany, Ireland, Spain, France, Croatia, Italy, Hungary, the Netherlands, Slovenia, Finland, Sweden and the United Kingdom) under surveillance, by means of an in-depth examination, and it is adding Romania and Portugal, which have now left their economic adjustment programmes, to the list.
For Croatia, Italy and Slovenia, these in-depth assessments are designed to determine whether the excessive imbalances are getting better or worse. For Ireland, Spain, France and Hungary, the aim will be to assess the risks related to persistent imbalances.
Commissioner for Economic Affairs Pierre Moscovici explained that the rebalancing of the current accounts remains asymmetrical. In many cases, for instance, the reduction of the deficit of the current accounts has been driven mainly by a contraction in demand and a drop in investment.
Germany and the Netherlands continued to record a strong surplus in the balance of payments, which can be explained by low demand and low levels of domestic investment. However, the Commission stresses that in the case of Germany in particular, what makes up the surplus has changed. The German surplus vis-à-vis the rest of the world has increased, while the surplus vis-à-vis the eurozone has declined. The latter has been driven mainly by a reduction in exports to the rest of the eurozone, rather than an increase in imports by Germany. Moscovici explained that Germany has sufficient budgetary margin to make more public investment. (EL)