What's new from ECFIN
Issue 19 | October 2010
Positive conclusions from first review of the Economic Adjustment Programme for Greece
A joint EC/IMF/ECB first review mission under the Economic Adjustment Programme visited Athens from 26 July to 5 August 2010. The report by European Commission staff provides a detailed assessment of compliance, an overview of challenges faced by Greece and a summary of the main findings of the mission. Subject to approval by the Eurogroup, the overall positive assessment of compliance paves the way for release of the next tranche of loans. A total of €9 billion will be made available, with €6.5 billion provided by euro-area Member States.
Issue 19 | October 2010
Interim economic forecast: EU recovery progressing within an uncertain global environment
The EU economy, while still fragile, is recovering at a faster pace than previously envisaged. Based on an update of the outlook for the seven largest Member States, GDP is now expected to expand by 0.5% in the EU and euro area in the third quarter and by 0.4% and 0.3% respectively in the fourth. Growth is also more balanced towards domestic demand than previously anticipated. For 2010 as a whole, GDP growth is now forecast at 1.8% in the EU and 1.7% in the euro area. This represents a sizeable upward revision compared to the spring forecast (1.0% for the EU and 0.9% for the euro area).
Issue 19 | October 2010
Economic Sentiment Indicator improves, Business Climate Indicator broadly unchanged
After surging in July, the Economic Sentiment Indicator (ESI) continued to improve in both the EU and the euro area, albeit at a slower pace. The ESI rose to 102.7 (up by 0.6 of a point) in the EU and to 101.8 (up by 0.7 of a point) in the euro area. In both the EU and the euro area the ESI is above its long-term average. In contrast, the Business Climate Indicator for the euro area remains broadly unchanged after a jump observed in July. The level of the indicator suggests that economic activity in industry will continue to recover in the coming months but still has some way to go before reaching its pre-crisis level.
Issue 19 | October 2010
Commission report concludes Estonia on track for introduction of euro
The Tenth report on the practical preparations for the future enlargement of the euro area, issued on 27 July, concludes that Estonia’s preparations are on the right path but identifies some areas where further efforts are necessary. The Estonian authorities are in particular advised to reinforce the recommendation to retailers that during the dual circulation period, change is given in euros only. The Commission also recommends that the Estonian authorities encourage businesses to join the fair-pricing initiative, regularly monitor the changeover preparations by local authorities, move forward rapidly on providing information about the changeover and pay particular attention in the information campaign to the public’s concerns, and especially those related to price developments. Estonia will adopt the euro on 1 January 2011.
