Fall in EU economic imbalances — Commission

Reporting to a meeting of EU economy and finance ministers at the Economic and Financial Affairs Council (ECOFIN) on Tuesday, the European Commission put a largely positive spin on its financial country reports, which were first published in late February.

“The EU economy is continuing its recovery and many member states are making progress to address structural problems of their economies,” said Commission Vice President Valdis Dombrovskis, who is responsible for the euro and social dialogue. “Fewer member states than last year are considered to have imbalances.”

The Commission led in-depth economic policy reviews for 18 member countries. Among them, 12 were found to be experiencing economic problems, out of which five countries — including France, Italy and Portugal — were experiencing “excessive” imbalances, while seven countries, including Germany, Ireland, the Netherlands and Spain, were found to be experiencing imbalances.

These EU member countries will publish national reform programs by April, and the Commission will make its country-specific recommendations in May.

Meanwhile, the ECOFIN ministers from eurozone countries also briefed journalists on their Monday discussions at the Eurogroup meeting. Notably, their views on the budgetary reforms needed to comply with the EU’s Stability and Growth Pact on coordinated fiscal policies differed greatly from one country to another.

German Finance Minister Wolfgang Schäuble remarked that budget consolidation in the eurozone had decreased over the last year in a number of countries and that budget deficits had increased. “This development clearly goes in the wrong direction,” he said, insiting that “until May, measures have to be taken to meet the guidelines of the Stability and Growth Pact.”

At a press briefing in another room, however, Italian Economy Minister Pier Carlo Padoan did not share the same view, saying he was confident that the Commission would grant Italy the flexibility it requested for the implementation of its budgetary reform.

“The Commission has to resolve the problem of the additional flexibility that we have asked for,” he said.

French Finance Minister Michel Sapin also reiterated that his country’s draft budgetary plans had been found to be “broadly compliant” by the Commission in November — and rejoiced that the situation this year had “nothing to do with last year.”

This article has been updated to correct the attribution of the analysis of the country reports.

Click Here: Cardiff Blues Store