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Macroeconomic Imbalance Procedure

The Macroeconomic Imbalance Procedure (MIP) is a surveillance mechanism to detect and address economic trends that may adversely affect the proper functioning of a Member State, the euro area, or the EU. It aims to identify potential risks early on, prevent the emergence of harmful macroeconomic imbalances and correct the imbalances that are already in place.

The annual starting point of the MIP is the Alert Mechanism Report (AMR). Based on a scoreboard of indicators, the AMR identifies countries for which a closer analysis (in-depth review) is deemed necessary. The outcome of these in-depth reviews forms the basis for further steps under the MIP whereby a graduated approach is followed reflecting the gravity of imbalances.

The Commission may propose that the Council issues recommendations to countries identified with imbalances. Countries for which imbalances are considered excessive would be subject to an enhanced process of specific monitoring or could enter the Excessive Imbalance Procedure, which can eventually lead to sanctions for euro area Member States in case of reiterated lack of compliance with obligations.

Results of the 2016 in-depth reviews

Of the 18 countries identified for an in-depth review (IDR) in the Alert Mechanism Report (AMR) of 26 November 2015,  12 are deemed to experience imbalances. Bulgaria, Croatia, France, Italy and Portugal remain in the excessive imbalances category without triggering the Excessive Imbalances Procedure. Finland, Germany, Ireland, The Netherlands, Spain, Sweden and Slovenia are found to experience imbalances. All Member States concerned by imbalances or excessive imbalances (without an Excessive Imbalances Procedure) will be subject to specific monitoring, adapted to the degree and nature of the imbalances presented. Austria and Estonia, which were subject to in-depth reviews for the first time this year, are deemed not to experience imbalances. For Belgium, Hungary, the UK and Romania, the procedure has been closed as the risks from imbalances have been reduced.

After exiting its financial adjustment programme on 31 March 2016, Cyprus was reintegrated into the regular cycle of European economic policy coordination, including the Macroeconomic Imbalance Procedure. The Commission adopted an in-depth review (IDR) for Cyprus on 7 April 2016. Cyprus is deemed to experience excessive imbalances, along with the five other Member States mentioned above.

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More information on the 2016 In-depth reviews

Alert Mechanism Report 2016

The European Commission’s Alert Mechanism Reportpdf(745 kB) kick starts the EU’s annual Macroeconomic Imbalance Procedure. The AMR uses a scoreboard of indicators to screen for potential economic imbalances that policymakers should address. Based on AMR results, countries are selected for in-depth reviews (IDRs), where European Commission services examine the existence or persistence of imbalances or their unwinding in Member States.

In light of the results of the 2015 AMR, 18 countries were analysed in IDRs. Austria and Estonia were analysed in IDRs for the first time, while 16 countries were subject to IDRs to assess the evolution of the imbalances that were identified in the IDRs of 26 February 2015.

Click on a country to discover the flagged MIP indicators and the next steps.

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The European Commission decided in the AMR of 26 December 2015 to study how macroeconomic risks are evolving. It presented its conclusions in in-depth reviews on 24 February 2016.

 

The European Commission did not conduct further in-depth analysis at this stage.

 

Countries undergoing macroeconomic adjustment programmes.

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