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Germany can do more to help eurozone, says EU

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Germany can do more to help eurozone, says EU

Pierre Moscovici - Photo EC

(BRUSSELS) - With its persistently high current account surplus, Germany could do more to help the eurozone economy, the European Commission said Wednesday in its annual analysis of EU Member States' economies.

In its 'winter package' of country-by-country reports, the EU executive says Member States are making headway in implementing the individual policy guidance they received last year on issues such as boosting investment, pursuing structural reforms and ensuring responsible fiscal policies.

This assessment of Member States' progress is part of an annual cycle of economic policy coordination at EU level known as the Winter Package of the European Semester. The package follows the economic forecast released last week.

The 27 Country Reports (for all Member States except Greece, which is under a dedicated stability support programme) provide the annual analysis of Commission staff of the situation in the Member States' economies, including where relevant an assessment of macroeconomic imbalances.

"Over the past twelve months, many EU countries have made further – albeit not yet sufficient – progress in addressing their key economic challenges", said Finance Commissioner Pierre Moscovici: "With so much uncertainty around us, one thing is clear: these challenges will be overcome only if they are tackled decisively, by the governments currently in power as well as their successors."

The Country Reports show that in most Member States, economic recovery has contributed to declining unemployment rates, although these are still above pre-crisis levels."

In-Depth Reviews contained in some of the reports show that large current account deficits have been corrected, and sizeable stocks of private, public and external debt have started falling as a share of Gross Domestic Product."

However, a number of risks remain, says the Commission: high current account surpluses are only being adjusted to a limited extent, while large stocks of non-performing loans weigh on the financial sector in some Member States.

The Commission has Finland a clean bill of health, concluding that it is now not experiencing imbalances in the meaning of the Macroeconomic Imbalances Procedure (MIP).

The other 12 Member States are facing either imbalances (6) or excessive imbalances (6). These 12 will continue to be subject to specific monitoring adapted to the degree and nature of their imbalances. This will focus on their policy responses through an intensified dialogue with the national authorities, through experts' missions and through progress reports. The summary of the In-Depth Reviews is as follows:

  • Bulgaria, France, Croatia, Italy, Portugal and Cyprus are found to be experiencing excessive economic imbalances.
  • Germany, Ireland, Spain, the Netherlands, Slovenia and Sweden are experiencing economic imbalances.
  • Finland is found not to be experiencing economic imbalances.


The Commission has also adopted a report on Italy, in which it reviews the country's compliance with the debt criterion of the Stability and Growth Pact and the benchmark pace of reduction towards it.

The report concludes that unless the additional structural measures, worth at least 0.2% of GDP, that the government committed to adopt by April 2017 are credibly enacted, the debt criterion as defined in the Treaty and in Regulation (EC) No 1467/1997 should be considered as not complied with.

However, a decision on whether to recommend opening an Excessive Deficit Procedure would only be taken on the basis of the Commission 2017 spring forecast, taking into account outturn data for 2016 and the implementation of the fiscal commitments made by the Italian authorities in February 2017.

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