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Dark clouds over a long road © Clint Spencer

January 2008 | Issue 9
Gathering clouds and stiff headwinds…

Turbulence on the financial markets has led the Commission to moderate its predictions for EU economic growth in 2008, from 2.6% forecast in the spring to 2.4%. However, there are silver linings, suggested Commissioner Joaquín Almunia at the press conference to announce the new forecasts. “Clouds have clearly gathered on the horizon with this summer’s turbulence in the financial markets, the US slowdown and the ever-rising oil prices,” he said. “But thanks to strong world growth and solid economic fundamentals, the negative impact should be limited.” Overall, the Commission expects the EU economy to ‘weather the storm’ and grow at close to its potential over the next two years.

© Richard Blaker

January 2008 | Issue 9
Poland at a crossroads

Much has been achieved in reorienting the Polish economy, especially in the early years of transition, but real convergence has slowed down recently, both compared to the past and to the other new Member States. In particular, employment and labour-activity levels and investment were poor for many years. They have improved since EU accession, but they remain unsatisfactory. A DG ECFIN seminar in Brussels on 23 January 2008 and gathering researchers and practitioners dealing with Poland attempted to identify the largest obstacles to fast growth and the optimal policy response, with a particular focus on the role of public finances.
Worker assembling products © Christopher O’Driscoll

January 2008 | Issue 9
Small businesses, big currency

On 18 October 2007, DG ECFIN hosted a conference on ‘SMEs and the euro’, jointly organised with the European Association of Craft, Small and Medium- Sized Enterprises (UEAPME). The topic covered the preparations that small businesses need to undertake as their country moves to adopt the euro, including the measures that public authorities might implement to support them. In his welcome address, UEAPME Secretary-General Hans-Werner Müller warned against apathy arising from the success of the first-wave introduction that created the euro area. “They have to prepare properly; they don’t have to reinvent the wheel,” he said. The conference covered areas such as preparing IT systems, pricing strategies and communication issues; challenges that all busy SMEs will need to face in preparing for the single currency.

January 2008 | Issue 9
Delivery for the Deutsche Post

Speaking on 7 November at a conference of the Deutsche Post World Net, Commissioner Almunia gave participants a broad overview of the single market and the challenges it faces for the future, and in particular the achievements of Europe’s network industries, such as the postal services his hosts deliver. “A truly integrated and competitive market for network industries is a key component of the dynamic single market that we are working towards,” he told his audience, and explained that while market opening is often met by fears of lower standards, this is precisely why the universal nature of network industry services, such as postal services, is firmly anchored in many pieces of EU legislation.
Golden medal featuring the figure 10

January 2008 | Issue 9
A commemorative coin: click and vote

A special €2 coin is planned to celebrate the tenth anniversary of Economic and Monetary Union. It will appear at the beginning of 2009 and will have the same special design in all euro-area countries. Euro-area national mints have each sent their design proposals – from which a shortlist of four designs will be selected. In early 2008,these four designs will appear on a dedicated website set up by the European Commission where EU citizens and residents can vote for their choice – the design with the most votes wins. One lucky voter will receive a prize of a set of highvalue euro collector coins. You will be able to access the designs and vote for your choice via the ECFIN website from the beginning of February.

Front cover of the Quarterly Report on the Euro Area © European Commission

January 2008 | Issue 9
The euro area: regular report

The European Commission released its ‘Quarterly Report on the Euro Area’ on 18 December, which assesses the euro area’s short-term economic outlook. Its focus section analyses euro-area productivity trends in industry, and shows that the relative weakness of productivity can be traced back to developments in total factor productivity (TFP) in a small group of industries. The report also analyses developments in inflation volatility, arguing that better macroeconomic policies have brought greater macroeconomic stability in the euro area. Other topics are the euro’s evolving international role since its introduction, and structural reforms since the launch of the euro.