Brussels, 26/11/2015 (Agence Europe) - Between now and February 2016, the European Commission will be analysing the macroeconomic imbalances of 18 member states.
In its annual report on the early warning mechanism, which was presented on Thursday 26 November alongside the 2016 version of its annual growth review (see other article), the European institution lists 18 countries which will be the subject of an in-depth assessment, to determine whether they are concentrating macroeconomic imbalances. For the first time, Estonia and Austria are included in the macroeconomic imbalance procedure. In the case of Estonia, the in-depth assessment will cover risks related to new “pressures” on domestic consumption. For Austria, there will be a detailed analysis of the exposure of the financial sector to external events and the issuing of credit to the private sector.
The imbalances identified in Bulgaria, France, Croatia, Italy and Portugal will require “decisive” action and “specific” monitoring, said the Commissioner for Economic and Financial Affairs, Pierre Moscovici. For Belgium, Germany, Spain, Finland, Hungary, Ireland, the Netherlands, Romania, Slovenia, Sweden and the United Kingdom, “differentiated” action is called for.
Imbalances had been identified for the same 16 countries at the end of 2014 (see EUROPE 11207), but the act of putting the countries in question at increased supervision levels must be taken as a “sign of how seriously the Commission is taking these matters and its determination to act”, Moscovici stressed, saying that procedures for macroeconomic imbalances and for excessive deficits were, in his view, of “equal importance”. So far, no state has been on the receiving end of infringement proceedings, potentially leading to financial penalties.
In February, the Commission will present conclusions on these in-depth assessments in the framework of its annual country-specific reports. Once it has analysed the national stability and reforms programmes, it will present specific political recommendations on the macroeconomic imbalances in May.
More generally, the Commission notes that the current account deficits inherited from the years preceding the 2008 financial crisis have been “considerably” reduced. Even so, indebtedness, be it public/private or internal/external, remains at “historically high” levels and is weighing down the scale of recovery. Surpluses, which have been observed in Germany and the Netherlands in particular, will remain considerable until 2017. Those observed at eurozone level are among the highest in the world and will increase in 2016.
It is worth noting that three indicators for employment (activity rate, long-term unemployment, youth unemployment) have been included in the score board of the procedure to assess macroeconomic imbalances.
Finally, specific emphasis has also been laid on the impacts of these national imbalances on the whole of the eurozone economy and on the approach coordinated at European level required by these impacts in terms of political response. (Original version in French by Mathieu Bion)