European Semester Winter Package: reviewing Member States’ progress on their economic and social priorities

The European Commission has presented the European Semester Winter Package. The package includes 27 Country Reports (for all Member States except Greece, which is under a stability support programme), the annual analysis by Commission staff on the economic and social situation in Member States and progress made in implementing Country-Specific Recommendations over the years. For the 12 Member States selected last November for an in-depth review, the Country Reports include an assessment of possible macroeconomic imbalances and the package provides an update of the categorisation of countries under the so-called Macroeconomic Imbalances Procedure. For the first time, the Country Reports put a special emphasis on mainstreaming the priorities of the European Pillar of Social Rights, proclaimed in November 2017. A press release and memo are available online. (For more information: Johannes Bahrke – Tel.: +32 229 56153; Annikky Lamp – Tel.: +32 229 56151; Sara Soumillion – Tel.: +32 229 67094)

 

European Commission outlines EU plan to counter US trade restrictions on steel and aluminium

The College of Commissioners discussed today the EU’s response to the possible US import restrictions for steel and aluminium announced on 1 March. The EU stands ready to react proportionately and fully in line with the World Trade Organisation (WTO) rules in case the US measures are formalised and affect EU’s economic interests. The College gave its political endorsement to the proposal presented by President Jean-Claude Juncker, Vice-President Jyrki Katainen and Commissioner for Trade Cecilia Malmström. Speaking after the College meeting, Commissioner Malmström said: “We still hope, as a USA security partner, that the EU would be excluded. We also hope to convince the US administration that this is not the right move. As no decision has been taken yet, no formal action has been taken by the European Union. But we have made clear that if a move like this is taken, it will hurt the European Union. It will put thousands of European jobs in jeopardy and it has to be met by firm and proportionate response. Unlike these proposed US duties, our three tracks of work are in line with our obligations in the WTO. They will be carried out by the book. The root cause of the problem in the steel and aluminium sector is global overcapacity. It is rooted in the fact that a lot of steel and aluminium production takes place under massive state subsidies, and under non-market conditions. This can only be addressed by cooperation, getting to the source of the problem and working together. What is clear is that turning inward is not the answer. Protectionism cannot be the answer, it never is.”The EU remains available to continue working on this together with the United States.The EU has been and remains a strong supporter of an open and rules-based global trade system. (For more information: Daniel Rosario – Tel.: +32 229 56185; Kinga Malinowska – Tel: +32 229 51383)

 

Eurostat: 8 mars 2018: Journée internationale de la femme

Les femmes ont gagné en moyenne 16% de moins que les hommes dans l’UE en 2016, l’écart de rémunération le plus faible en Roumanie et en Italie, le plus élevé en Estonie. En 2016, l’écart de rémunération non ajusté entre les hommes et les femmes était juste supérieur à 16% dans l’Union européenne (UE). Autrement dit, pour chaque euro gagné dans l’heure par un homme, une femme gagnait en moyenne 84 centimes. L’écart de rémunération dans les États membres, en 2016, allait de juste plus de 5% en Roumanie et en Italie à plus de 25% en Estonie, suivie par la République tchèque et l’Allemagne (près de 22% chacune). Le communique Eurostat est à votre disposition en ligne. (Pour plus d’informations: Christian Wigand – Tel.: +32 229 62253; Mélanie Voin – Tel.: +32 229 58659)

 

More Commission support for industrial regions to build resilient and competitive economies

Todaythe Commission has selected 7 additional EU regions and Member States for tailored assistance under the Commission pilot action on industrial transition: Cantabria (Spain), Centre-Val de Loire (France), East-North Finland, Grand-Est (France) and Greater Manchester (United Kingdom) as well as Lithuania and Slovenia, in addition to the regions already selected in December 2017. Commissioner for Regional Policy Corina Creţu said: “Industrial transition is a major challenge for our economy and society. I am very glad that we will be working with 10 regions and two Member States to help them make full use of their strengths and potentials to embrace innovation, decarbonisation, digitisation, and to develop the skills for the future.” The selected authorities will be able to develop or redesign strategies for regional economic transformation based on their smart specialisation priorities i.e. the regions’ niche areas of competitive strengths. Tailored assistance will be offered by the Commission services, external experts and the Organisation for Economic Co-operation and Development (OECD) to help prepare for the jobs of the future, broaden innovation, support the transition to a low-carbon economy, encourage entrepreneurship and promote inclusive growth. A press release and a factsheet are available online. More information on smart specialisation in the participating Member states and regions is available on DG REGIO’s website. A signature ceremony between Commissioner Crețu and representatives from the Member States and regions will take place today at 14h at the Commission’s VIP corner, which you can follow live on EbS. (For more information: Johannes Bahrke – Tel.: +32 229 58615; Sophie Dupin de Saint-Cyr – Tel.: +32 229 56169)

Eurostat: Estimation du PIB et des principaux agrégats pour le quatrième trimestre 2017, le PIB en hausse de 0,6% tant dans la zone euro que dans l’UE28, +2,7% et +2,6% respectivement par rapport au quatrième trimestre 2016

Au cours du quatrième trimestre 2017, le PIB corrigé des variations saisonnières a progressé de 0,6% tant dans la zone euro (ZE19) que dans l’UE28 par rapport au trimestre précédent, selon l’estimation publiée par Eurostat, l’office statistique de l’Union européenne. Au cours du troisième trimestre 2017, le PIB avait augmenté de 0,7% dans les deux zones. En comparaison avec le même trimestre de l’année précédente, le PIB corrigé des variations saisonnières s’est accru de 2,7% dans la zone euro et de 2,6% dans l’UE28 au quatrième trimestre 2017, après +2,7% dans les deux zones au troisième trimestre 2017. Au cours du quatrième trimestre 2017, le PIB des États-Unis a progressé de 0,6% par rapport au trimestre précédent (après +0,8% au troisième trimestre 2017). Par rapport au même trimestre de l’année précédente, le PIB a progressé de 2,5% (après +2,3% au troisième trimestre 2017). Sur l’ensemble de l’année 2017, le PIB a augmenté de 2,3% dans la zone euro et de 2,4% dans l’UE28, contre 1,8% et 2,0% en 2016. Un communiqué de presse est disponible en ligne. (For more information: Johannes Bahrke – Tel.: +32 229 56153; Annikky Lamp – Tel.: +32 229 56151; Sara Soumillion – Tel.: +32 229 67094)

Concentrations: la Commission autorise l’acquisition du contrôle conjoint d’European Broadcaster Exchange par les sociétés ProSiebenSat.1, TF1, Mediaset et Channel Four Television

La Commission européenne a approuvé, en vertu du règlement européen sur les concentrations, l’acquisition du contrôle en commun de European Broadcaster Exchange (EBX) Limited basée au Royaume-Uni par les sociétés ProSiebenSat.1 Media SE, basée en Allemagne, Télévision Française 1 S.A., basée en France, Mediaset S.p.A., basée en Italie et Channel Four Television Corporation, basée au Royaume-Uni. European Broadcaster Exchange est active dans la commercialisation et la vente, au niveau pan-européen, de l’inventaire publicitaire vidéo affiché avant, pendant et après le contenu vidéo disponible sur les médias numériques exploités par les entreprises actionnaires ou par des tiers. ProSiebenSat.1 Media SE est la société holding de l’un des grands réseaux de télévision à accès libre en Allemagne. Télévision Française 1 SA, appartenant au groupe Bouygues, est la société holding de l’un des grands réseaux de télévision à accès libre et à péage en France. Mediaset SpA, appartenant au groupe Fininvest, est la société holding de l’un des grands réseaux de télévision à accès libre et à péage en Italie et en Espagne. Channel Four Television Corporation est la société holding de l’un des grands réseaux de télévision au Royaume-Uni. La Commission a conclu que la concentration envisagée ne soulèverait pas de problème de concurrence, compte tenu de son impact très limité sur la structure du marché sur le territoire de l’Espace économique européen. L’opération a été examinée dans le cadre de la procédure simplifiée de contrôle des concentrations. De plus amples informations sont disponibles sur le site internet concurrence de la Commission, dans le registre public des affaires sous le numéro d’affaire M.8714. (Pour plus d’informations: Ricardo Cardoso – Tel.: +32 229 80100; Maria Sarantopoulou – Tel.: +32 229 13740)

Mergers: Commission clears acquisition of controlling shares in Hyperion by CDPQ

The European Commission has approved, under the EU Merger Regulation, the acquisition of controlling shares in Hyperion Insurance Group Limited (“Hyperion”) of the UK by Caisse de dépôt et placement du Québec (“CDPQ”) of Canada. Hyperion is an insurance and reinsurance broker, and underwriting agency, active worldwide. CDPQ is a long-term institutional investor that manages funds for public as well as private pension and insurance funds, active worldwide. The Commission concluded that the proposed acquisition would raise no competition concerns because there are no overlaps between the companies’ activities in the European Economic Area. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case registerunder the case number M.8767. (For more information: Ricardo Cardoso – Tel.: +32 229 80100; Maria Sarantopoulou – Tel.: +32 229 13740)

Mergers: Commission clears acquisition of Century by Nufarm

The European Commission has approved, under the EU Merger Regulation, the acquisition of Century, a portfolio of assets belonging to Adama Agricultural Solutions Ltd of Israel and Syngenta AG of Switzerland, by Nufarm of Australia. Century comprises a portfolio of pesticides including herbicides, fungicides, insecticides, seed treatment products, as well as plant growth regulators. It is sold as part of the commitments offered by ChemChina to the Commission to approve the acquisition of Syngenta. Nufarm is a public company that offers pesticides including herbicides, insecticides, fungicides, and seed technologies. The Commission concluded that the proposed acquisition would raise no competition concerns because of the presence of several alternative competitors in various pesticide markets within the European Economic Area. The operation was examined under the normal merger review procedure. More information will be available on the Commission’s competition website, in the public case register under the case number M.8725. (For more information: Ricardo Cardoso – Tel.: +32 229 80100; Maria Sarantopoulou – Tel.: +32 229 13740)

 

ANNOUNCEMENTS

Security Union: EU Mayors to discuss security of public spaces

Tomorrow, mayors from cities across Europe will gather in Brussels to discuss lessons learned from recent terrorist attacks and to share best practices to enhance the protection of public spaces. The EU Mayors’ Conference, “Building Urban Defences Against Terrorism”, jointly organised by the European Commission and the European Committee of the Regions, will notably focus on “security by design” solutions, measures to enhance the prevention of radicalisation at local level, public-private cooperation and funding opportunities for public spaces under the different EU financial instruments. Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos said: “In a Europe that protects, it is fundamental that our citizens feel safe when walking down the street. Security by design should become a cornerstone of the way we protect our public spaces from terrorism. We are here to concretely help our Member States with funds and expertise so they step up their efforts at all levels – European, national and local.” Commissioner for the Security Union Julian King said: “We are committed to working closely with cities and local authorities to strengthen the protection of our public spaces, without compromising the very values that we are defending: openness, tolerance and freedom.” Commissioner for Regional Policy Corina Crețu said: “Security in our cities has a social dimension: access to quality and non-segregated basic services, urban regeneration, community empowerment. Solutions will be found by working together at all levels, so we are able to tackle extremism and violence before they can take roots in our streets.” President of the European Committee of the Regions Karl-Heinz Lambertz said: “Community safety is a priority and by bringing together every level of government, the EU is taking the right steps to counter terrorism. We need to cooperate across borders, invest locally to tackle radicalisation and ensure our security services are ready to prevent future attacks. This work starts in our cities”. Following up on the Nice Declaration of 29 September 2017, the conference is one of the key deliverables of the EU Action Plan to support the protection of public spaces, presented by the Commission in October 2017. A press conference with Commissioner Julian King, French Minister of Interior, Gérard Collomb, the Mayor of Mechelen, Bart Somers on behalf of the European Committee of the Regions, and the Mayor of Nice, Christian Estrosi will take place tomorrow at 9:45 and will be broadcast on EbS. Factsheets on the Commission’s efforts to protect public spaces and fight radicalisation are available online. More information on the conference is available on the event’s website. (For more information: Natasha Bertaud – Tel.: +32 229 67456; Tove Ernst – Tel.: +32 229 86764; Katarzyna Kolanko – Tel.: +32 229 63444)

 

Commissioner Andriukaitis in Sofia for the ‘Role of the Wildlife in Animal Health Management’ workshop and Citizens’ Dialogue

On 8 March, Vytenis Andriukaitis, Commissioner for Health and Food safety will be in Sofia to participate in the multi-country workshop on the ‘Role of the Wildlife in Animal Health Management’ organised by the Technical Assistance and Information Exchange Instrument (TAIEX) of the European Commission and the Bulgarian Presidency. ‘Clearly there is no one-size-fits-all overall strategy to deal with wildlife in relation to animal health management. The EU animal health policy that covers all animals in the EU kept for food, farming, sport, companionship, entertainment, as well as animals used in research and kept in zoos is currently covered in many different pieces of EU legislation. The intentions is to replace it, over time, by the new Animal Health Law and its implementing legislation which will be presented and discussed in more detail during the event.’ said Commissioner Andriukaitis ahead of the visit. In Sofia the Commissioner is scheduled to meet with Mr Rumen Porodzanov, Minister for Agriculture, Food and Forestry, Mr Kiril Ananiev, Minister for Health and coordinators of European Reference Networks. During his visit Commissioner will also participate in the Citizens’ Dialogue “Towards more sustainable food production and healthier consumption in the EU” alongside Ms Desislava Taneva, Member of the Parliament and Chair of Agriculture and Food Committee, webstream available here. (For more information: Anca Paduraru – Tel.: +32 229 91269; Aikaterini Apostola – Tel.: +32 229 87624)

 

Commissioners Avramopoulos, Jourová and King to attend the Justice and Home Affairs Council

Commissioners Dimitris Avramopoulos, Věra Jourová and Julian King will participate in the Justice and Home Affairs Council taking place in Brussels on 8 and 9 March. On Thursday, Home Affairs Ministers together with Commissioners Avramopoulos and King will exchange views on the implementation of the Passenger Name Record (PNR) Directive, cooperation between CSDP missions and EU Justice and Home Affairs Agencies and the work with the Western Balkan countries in the area of security and counter terrorism. Over lunch, the Ministers will discuss the issue of terrorist content online and the recent Recommendation presented by the Commission. In the afternoon, the discussion will focus on the Commission’s proposal on interoperability of EU information systems and the state of play on migration. A press conference is scheduled to take place after the meeting at 18:00 CET and will be streamed live on EbS. On Friday, Commissioner Jourováwill discuss with Justice Minsters the reform of the Brussels IIa Regulation on cross-border matrimonial matters and parental responsibilities. Commissioner Jourová will also inform Ministers on the state of play of the setting up of the European Public Prosecutor’s Office (EPPO). Ministers will exchange views on improving the cross-border access to electronic evidence, a session which Commissioner King will also participate in, ahead of Commissioner Jourová’s visit to the U.S. and the presentation of a proposal by the Commission on this topic. Finally, the lunch session will be dedicated to the issue of radicalisation in prisons. A press conference is scheduled to take place after the meeting at around 15:30 CET and will be broadcast on EbS.(For more information: Natasha Bertaud – Tel.: +32 229 67456; Tove Ernst – Tel.: +32 2 298 67 64; Christian Wigand Tel.: +32 2 29 62253

Upcoming events of the European Commission (ex-Top News)

Today, the Commission adopted the 2018 Annual Work Programme defining reform support measures that will be funded through the Structural Reform Support Programme (SRSP). In 2018, the SRSP will provide technical support to 24 Member States to carry out more than 140 projects. This comes in addition to more than 150 projects selected in 2017.

Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “While Europe’s economy has strengthened and is on a steady growth path, further structural reforms are needed to make our economies more stable, inclusive, productive and resilient. Today’s decision will enable us to continue providing support to EU Member States to prepare, design and implement growth-enhancing reforms.”

The SRSP Annual Work Programme sets out the priorities, objectives, expected results, and outlines actions that will be implemented through the Programme. In 2018, technical support will for example be provided to help Member States reform budgetary systems, modernise public administration and enhance the quality and efficiency of national judicial systems, as well as to help fight against fraud, corruption and money laundering. Further support will be deployed to better manage natural resources and resource efficiency, and to implement Energy Union initiatives. Numerous Member States will also benefit from support to implement reforms of healthcare and social welfare systems. In addition, Member States will be assisted with the development of capital markets, reforms of insolvency frameworks and with strengthening their ability to deal with non-performing loans.

This year, Member States’ requests for technical support exceeded five times the available amount and the number of Member States that will benefit from technical support under the SRSP has increased substantially compared to 2017. To be able to accommodate more requests, the Commission proposed in December to increase the funding available for technical support activities.

The support provided by the Commission for structural reforms is closely linked to the European Semester framework, as the SRSP is also intended to improve the implementation of reforms highlighted in the Country-Specific Recommendations and Country Reports. Examples of technical support provided in 2017 and earlier are outlined in the 2018 Country Reports, published today.

Background

The Commission created the Structural Reform Support Service in 2015 to support Member States in the preparation, design and implementation of institutional, structural and administrative reforms. The Structural Reform Support Service (SRSS) manages a dedicated support programme, the Structural Reform Support Programme (SRSP), with a budget of €142.8 million over the years 2017-2020. The Programme entered into force in May 2017. The support provided through the Programme is available to all EU Member States upon their request and requires no co-financing.

As part of its proposals to deepen Europe’s Economic and Monetary Union put forward in December 2017, the Commission proposed to increase the SRSP budget until 2020 by €80 million. An additional €80 million is expected to come through voluntary transfers by Member States from their technical assistance component under the European Structural and Investment Funds. This would increase the available budget for support activities to €300 million until 2020, thus allowing the SRSP to respond to the greater than expected demand for technical support and to provide support for reforms in non-euro-area Member States on their way to joining the euro.

Further information

Factsheet: Structural Reform Support Service

Press release: European Semester Winter package

Memo: European Semester Winter Package

Country Reports

Structural Reform Support Service

Structural Reform Support Programme

What does today’s package include?

Today, the Commission publishes:

• 27 Country Reports (for all Member States except Greece, which is subject to a stability support programme), including in-depth reviews (IDRs) for 12 countries identified in the Alert Mechanism Report of last November
• A Chapeau Communication on the main findings and results of the Country Reports and IDRs
• Special monitoring reports in the context of the macroeconomic imbalances procedure

COUNTRY REPORTS

What are Country Reports?

Country Reports are analytical documents that provide an overview of the economic and social challenges in the Member States as well as policy action taken by them. The reports are a tool under the European Semester, the process of policy coordination to monitor reforms and to point to issues facing Member States. For countries for which the Commission’s Alert Mechanism Report 2018 identified the need for an in-depth review in November, these Country Reports include the analyses into whether the countries are experiencing macroeconomic imbalances and to what degree. The Country Reports will serve as a basis for the continuation of the dialogue with Member States and stakeholders at all levels, ahead of the presentation of national programmes in April and of the preparation of new Country-Specific Recommendations later in spring. The Country Reports also include policy highlights for all Member States, which are important for the countries in question or can serve as inspiration for others.

Member States have been consulted on the analytical elements of the reports in advance of publication, also to give them the opportunity to check the accuracy of facts and figures. The final analysis is that of the Commission.

What are the overall findings of the Country Reports?

The Country Reports review progress by Member States in addressing the issues identified in the Country-Specific Recommendations they received over the years.

The analysis presented in today’s Country Reports shows that the economic recovery, together with the reforms carried out in many parts of Europe, has contributed to improving the labour market and social context in Europe. Unemployment is at a ten-year low and almost back to pre-crisis levels, investment is picking up and public finances continue to improve. The share of people at risk of poverty or social exclusion has decreased to pre-crisis levels. However, remaining vulnerabilities, such as the high level of public and private debt, need to be overcome to safeguard the sustainability and inclusiveness of the current economic growth.

Today’s economic conditions call for further strengthening the foundations of Europe’s economies. Further reforms are needed to make them more resilient to future shocks, to mitigate the costs of demographic evolutions and to adapt to technological change. With continued focus on the ‘virtuous triangle’ of investment, structural reforms, and responsible fiscal policies, the European Semester continues to guide Member States in implementing the necessary reforms. This year’s Country Reports also look at the priorities of the European Pillar of Social Rights, which was recently proclaimed by the European Parliament, the Council and the Commission. The European Pillar of Social Rights serves as a compass towards better working and living conditions across the EU.

Have the Member States addressed the challenges identified in past Country-Specific Recommendations?

Member States continue to make progress in addressing the Country-Specific Recommendations adopted by the Council in the context of the European Semester.Reform implementation has slightly increased overall, as compared to the May 2017 stocktaking exercise. Since the start of the European Semester in 2011, Member States achieved at least ‘some progress’ with regard to more than two-thirds of the recommendations.

Reform implementation has been solid in some key areas. Since the outset of the European Semester, Member States have made most progress in financial services and in fiscal policy and fiscal governance. This continues to reflect the priority that was given to the stabilisation of public finances and of the financial sector, following the economic and financial crisis. Significant progress has also been made in addressing access to finance, in employment protection legislation and frameworks for labour contracts. However, more modest progress has been made in areas like the broadening tax bases or transport. In many Member States, progress towards addressing the important challenges related to long-term sustainability of public finances is slow.

Regulatory reforms have improved the business environment especially in those Member States that needed them most. These reforms have reduced administrative barriers to the creation of new business. However, entrepreneurship remains weak in many Member States. Access to bank credit and loans have improved for SMEs but venture capital is still insufficient in many parts of the Union. Significant progress can also be reported in public procurement. However, the pace of reform in services markets is slow in particular in business services, construction and real estate.

How do Country Reports help to address employment and social priorities in the context of the European Semester?

Since coming into office, the Juncker Commission has strengthened the focus of the European Semester, the process of economic policy coordination, on employment and social priorities. Member States continue to implement a wide spectrum of employment, education and social reforms. These reforms are expected to bring the Member States closer to the Europe 2020 targets in the employment and social areas: helping people to find jobs, providing them with the right skills and reducing poverty.

Employment in the EU reached 236.3 million in the third quarter of 2017, the highest number ever recorded. EU unemployment fell to 7.3% in December 2017. The number of people at risk of poverty or social exclusion continues to decrease for the 4th year in a row. The overall income distribution is more equal than in other major economies.

However, significant challenges still persist as high unemployment, poverty and inequality in some countries remain key concerns following the economic and financial crisis. Moreover, there are still big differences between Member States. Disposable household income is not yet above pre-crisis levels in all Member States. More convergence in performance needs to be encouraged.Social dialogue is a precondition to successful reforms.

To support this much needed convergence between Member States towards better working and living conditions, the Commission proposed to establish the European Pillar of Social Rights, which was proclaimed at the Social Summit in Gothenburg by the European Parliament, the Council of the EU and the Commission. The 2018 Country Reports look notably at how Member States deliver on the dimensions of the Pillar which are most acute for their situations. Dimensions that are looked at are, for example, the low impact of social transfers on poverty reduction, the gender employment gap, high labour market segmentation and sluggish wage growth, as well as the role of social dialogue in some Member States.

How is the European Pillar of Social Rights integrated into the European Semester?

The Pillar sets out a number of key principles and rights to support better living and working conditions across the EU. It is accompanied by a Social Scoreboard which tracks trends and relative performance across Member States in the three main dimensions of the Pillar: equal opportunities and access to the labour market, fair working conditions, and social protection and inclusion. This analysis feeds into the European Semester. The Annual Growth Survey (AGS) published in November already makes clear that the Semester will be key for delivering on the Pillar. The Joint Employment Report includes most of the indicators of the Social Scoreboard to monitor areas covered by the Pillar. In addition, the Employment Guidelines, the basis for the Country-Specific Recommendations (CSRs), have been aligned with the principles of the Pillar.

The Country Reports published today use the Pillar as a compass, focusing on reforms that help increase the resilience of labour markets, the effectiveness of national welfare systems and the capacity to deal with longer-term structural drivers of change (e.g. new forms of work, demographic ageing). To achieve this, the Pillar is covered in different parts of the report. A separate information box complements the analysis: it outlines the country’s general performance and then presents a few specific examples including one particularly important challenge and one good performance or promising policy development from the country.

STEPS UNDER THE MACROECONOMIC IMBALANCES PROCEDURE (MIP)

What are in-depth reviews?

In-depth reviews are carried out in the context of the macroeconomic imbalances procedure to identify and prevent the emergence of potentially harmful macroeconomic imbalances that could damage economic stability in a single country, the euro area or the EU as a whole. First, the Alert Mechanism Review identifies, on the basis of a reading of a scoreboard of indicators, released in November of each year, Member States with possible risks of economic imbalances. Then the Commission undertakes in-depth reviews to assess whether imbalances or excessive imbalances indeed exist in these countries and to assess their gravity. For those countries where an in-depth review was carried out, the results are included in the Country Reports.

The reviews examine aspects such as the sustainability of Member States’ external accounts, savings and investment balances, effective exchange rates, export market shares, cost and non-cost competitiveness, productivity, private and public debt, housing prices, credit flows, financial systems, unemployment and other variables.

Since the publication of the Alert Mechanism Report, the services of the Commission have been in close contact with experts from national authorities and stakeholders to gather the latest information and undertake the analysis.

What do you mean by “macroeconomic imbalances”?

In the context of the European Semester, a macroeconomic imbalance is defined as ‘any trend giving rise to macroeconomic developments which are adversely affecting, or have the potential to adversely affect, the proper functioning of the economy of a Member State or of the Economic and Monetary Union, or of the Union as a whole’, while excessive imbalances are ‘severe imbalances that jeopardise or risk jeopardising the proper functioning of the Economic and Monetary Union’.

The situations that fall under the definition of imbalances might be related to unsustainable trends (e.g. excessive and protracted growth in house prices) which could result in disruptive adjustment, or the presence of vulnerabilities (e.g. large stocks of debt) that weigh on the economy and amplify the impact of macroeconomic shocks.

For which countries did the Commission publish in-depth reviews?

In the 2018 Alert Mechanism Report, published in November 2017 as part of the European Semester Autumn Package which started the 2018 European Semester cycle, the Commission identified 12 Member States for in-depth reviews: Bulgaria, Croatia, Cyprus, France, Germany, Ireland, Italy, the Netherlands, Portugal, Slovenia, Spain and Sweden. All 12 countries were found to experience imbalances or excessive imbalances also in 2017.

An in-depth review is needed to identify the existence of imbalances and to assess their gravity. For imbalances already identified, in-depth-reviews are needed to analyse whether imbalances are unwinding, persisting or aggravating, while paying due attention to the contribution of the policies implemented by these Member States to overcome imbalances.

In the case of Greece, the surveillance of imbalances and the monitoring of corrective measures continue to take place in the context of its stability support programme.

The Commission has concluded that 11 out of the 12 Member States examined are facing either imbalances (8) or excessive imbalances (3). The summary of the in-depth reviews outcome is as follows:

• Croatia, Cyprus, and Italy are experiencing excessive economic imbalances.
• Bulgaria, France, Germany, Ireland, the Netherlands, Portugal, Spain and Sweden are experiencing economic imbalances. For Bulgaria, France and Portugal this is a de-escalation from excessive imbalances last year.
• Slovenia is no longerexperiencing economic imbalances.

The countries experiencing imbalances will continue to be subject to specific monitoring of progress in addressing their imbalances within the macroeconomic imbalance procedure (MIP) framework. For Bulgaria and Portugal the Commission underlined that further efforts remain necessary to achieve a sustainable correction of the imbalances.

The Commission does not at this stage carry out further analyses in the context of the MIP for the other Member States. However, careful surveillance and policy coordination are necessary on a continuous basis for all Member States to identify emerging risks and put forward the policies that contribute to growth and jobs.

What are the specific monitoring reports and why are they published now?

Specific monitoring is an instrument to monitor policies carried out in the context of the MIP. It allows for an intensified dialogue with the national authorities for countries identified as experiencing imbalances or excessive imbalances under the MIP. It takes place through experts’ missions and throughspecific monitoring reports, which are progress reports focussing on policy measures. The most recent reports were discussed in the relevant Council committees in late autumn last year and the findings have fed into the country reports.

The Commission publishes today these specific monitoring reports for nine countries: Bulgaria, Croatia, France, Germany, Italy, Spain, Slovenia, Sweden and the Netherlands. The specific monitoring reports for Cyprus, Ireland and Portugal were included in their latest post-programme surveillance reports.

What are the next steps?

The Council is expected to discuss the Commission’s findings emerging from the Country Reports and the in-depth reviews included in some of them. The Commission will then hold bilateral meetings with the Member States on the Country Reports. The Vice-Presidents and Commissioners will visit Member States to meet the governments, national parliaments, social partners and other stakeholders and to discuss the findings from the Country Reports.

By mid-April, Member States are expected to address the identified challenges in their National Reform Programmes and their Stability Programmes (for euro area countries) or Convergence Programmes (for non-euro area countries) related to public finances.

Member States are expected to involve national parliaments and social partners closely and ensure the ownership of the reform process by a wider range of stakeholders. Member States will also be invited to explain how regional and local authorities are involved in the preparation of the programme, as the success of implementation also relies on various levels of government.

On the basis of all these sources, the Commission will present its proposals for new Country-Specific Recommendations later in spring, targeting the key challenges each country should address.

For more information:

Press release

Communication

Country Reports

Specific monitoring reports under the MIP

SRSP 2018 Annual work programme

Winter 2018 Economic Forecast

Start of the 2018 European Semester: Autumn Package

Visual presentation of the European Semester cycle

Alert Mechanism Report 2018

Annual Growth Survey 2018

Euro Area Recommendation 2018

Draft Joint Employment Report 2018