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All articles
October 2010 | Issue 19
Economic governance: the EU gets tough
The crisis has exposed gaps in the current governance system and showed that existing instruments for economic policy coordination need to be used more fully. The Commission has put forward a comprehensive and coherent package of reforms that will strengthen the Stability and Growth Pact (SGP), particularly through an increased focus on public debt and fiscal sustainability, the extension of surveillance to macroeconomic imbalances and by making enforcement more effective through the use of sanctions and incentives. |
October 2010 | Issue 19
Klaus Regling, head of the EFSF, on EU governance
Klaus Regling was appointed chief executive officer of the European Financial Stability Facility (EFSF) on 1 July. The €440 billion facility is based in Luxembourg and its board comprises representatives from the 16 euro-area governments. From 2001 to 2008 Mr. Regling was the Director-General of ECFIN. |
October 2010 | Issue 19
Financial sector reform nearing the finish line
A second EU-wide stress test exercise has confirmed the overall resilience of the EU banking system. Nonetheless, bank capital and liquidity requirements will be increased and the Commission will propose further reforms in the areas of crisis management, derivatives and short-selling. |
October 2010 | Issue 19
Tax reform: increasing revenue without compromising growth
Tax reform is a potential way of supporting budgetary consolidation while enhancing growth. A shift from direct to indirect forms of taxation and the identification of new sources of tax revenue such as financial sector taxation could help boost revenue. |
July 2010 | Issue 18
Financial support to Greece: the inside story
The unprecedented EUR 110 billion financial support to Greece is based on strict conditions, a comprehensive programme of reforms and continuous monitoring. Ultimately, the Greek economy will recover as of 2012, the deficit will return to sustainable levels while the government debt ratio will fall from 2014 on. |
July 2010 | Issue 18
Coping with the crisis: beyond lifeboats
Europe has managed its response to the crisis well, according to speakers at the 11th Brussels Economic Forum. But the crisis is far from over. The Union must now embark on an ambitious programme of reforms to improve fiscal sustainability, productivity and economic governance. |
July 2010 | Issue 18
Tackling global warming: an opportunity for Europe?
Most stakeholders – political leaders, academics, and business executives – believe that deploying green technologies could help Europe to both tackle climate change and achieve sustainable economic growth. Global competition is intensifying, however, and a dearth of financing will make it difficult to scale up. |
July 2010 | Issue 18
Reinforcing economic policy coordination in Europe
Twenty years of hard grind reducing government debt have been wiped out in less than two. Crisis-related lower tax revenues and a GDP drop beyond expectations are widely seen as the major reasons for this situation. But a proposal for a new system of early budget coordination among governments called a “European Semester” could prevent such crises from emerging in the future. |
July 2010 | Issue 18
Estonia on track to become 17th euro-area member
After a detailed economic and financial study the European Commission has pronounced Estonia ready to join the euro area. The final decision was taken by the EU finance ministers who approved the Commission’s recommendation on 13 July 2010. |
July 2010 | Issue 18
G20 leaders discuss economic and financial reform
Leaders from the world’s top 20 advanced and emerging economies (the G20) met in Toronto at the end of June for a crucial meeting on the future of the world economy. A strong push for fiscal consolidation and the rebalancing of the global economy, a bank levy and financial reform made for a packed agenda. |
April 2010 | Issue 17
Interview with Commissioner Olli Rehn
Olli Rehn, the new Economic and Monetary Affairs Commissioner, took office on 10 February 2010 following endorsement of the whole Commission line-up by the European Parliament. The Finn was previously Commissioner for Enlargement and has a long political career at European level as a Member of the European Parliament, Economic Policy Adviser to the Prime Minister of Finland, and Head of Cabinet of former Finnish Commissioner Liikanen. Here Commissioner Rehn tells European Economy News about his vision for his five-year term of office. |
April 2010 | Issue 17
Europe’s ‘moment of truth’: how the Europe 2020 strategy must transform the Union
The crisis has made the task of securing Europe’s future economic growth more difficult and exposed some structural economic weaknesses. A lack of concerted action could consign Europe to relative decline. The Europe 2020 Strategy is a fresh approach designed to help Europe exit and move beyond the current crisis by emphasising smart, sustainable and inclusive growth and improving the governance structure needed to make it happen. |
April 2010 | Issue 17
Divergences within the euro area: threat and opportunity
Divergences in the competitive positions and current-account balances of euro area Member States have been building up over the past decade. The divergences may threaten both the economic stability of individual countries and the cohesiveness of the euro area. Addressing the divergences will require significant price and cost adjustments in current-account deficit countries and removing the structural factors that hinder domestic demand in surplus countries. Nonetheless, the euro area and the EU as a whole now have the chance to improve economic surveillance and policy coordination. |
April 2010 | Issue 17
Exploring new avenues: innovative financing at a global level
At its meeting in October 2009, the European Council agreed on the need for a coordinated exit from fiscal stimulus policies and for fiscal consolidation. But at the same time Europe, and the world, is likely to face enormous financing needs in the coming decades, to meet the costs of financial stability, climate change and development. The Council therefore invited the Commission to examine the potential contribution of innovative financing mechanisms in response to which Commission, including ECFIN, staff have recently published a working document on ‘Innovative Financing at a Global Level’. |
April 2010 | Issue 17
Business and Consumer Surveys: accurate and timely indicators complement official statistics
Business and consumer surveys are a proven, and increasingly sophisticated, tool for economic analysis. The results of such surveys reflect economic agents’ judgements about past, current and future economic developments. They provide policymakers, economists and business managers with useful information to assess the current state of the economy and forecast short term developments. The business and consumer surveys produced by ECFIN are used, among others, by the ECB to monitor inflation expectations and other economic variables. |
January 2010 | Issue 16
Climate change
Although the outcome of the UN climate change conference that ended on 19 December was disappointing, the Copenhagen Accord nevertheless represents the first step in determining how to finance mitigation and adaptation measures. It puts in place fast-start funding of 30 billion US dollars for the period 2010-2012 and sets a goal of mobilising 100 billion dollars a year by 2020 to address the needs of developing countries. |
January 2010 | Issue 16
Down but not out
The Sustainability Report 2009 concludes that fiscal policy in most Member States is not sustainable. Fiscal stimulus and other measures intended to re-start the European economy were necessary and successful, but have brought with them a large increase in government deficits and debts. Moreover, the projected impact of ageing populations is expected to dwarf the effects of the crisis many times over. Nonetheless, the success of several countries in getting their finances under control shows that it can be done. Fiscal strategies to reduce deficits and debt should be coupled with structural reforms of labour markets and social protection systems – particularly public pension and healthcare regimes. |
January 2010 | Issue 16
Product Market Review 2009
Examining the microeconomic consequences of the crisis can help us better understand the drivers of recovery. The 2009 Product Market Review explores the impact of the crisis on the structure of the EU economy and on innovation. It concludes that the bulk of adjustments will be within rather than across sectors and that product market support measures need to be smoothly withdrawn in order to avoid distorting competition in the Internal Market. The Review notes that the framework conditions for R&D and innovation must be improved as public spending neither can nor should make up for gaps in private sector R&D. |
January 2010 | Issue 16
Crisis encourages a re-examination of economics
The financial crisis and recession have presented a major challenge for policy makers – and for the economics profession. While there has been little disagreement regarding the immediate crisis response, there has been less agreement on the medium- to long-term approach. How will the crisis affect countries’ willingness to implement reforms, such as reforms to improve the design of the financial system? And how will the crisis affect the very paradigms underlying our economic thinking? DG ECFIN’s 6th Annual Research Conference, held on 15-16 October in Brussels, examined these interrelated questions. |
January 2010 | Issue 16
Croatian accession
Croatia has weathered the recession relatively well thanks to the inherent strengths of its economy. Nevertheless, the country’s large foreign debt is a key vulnerability. The country also needs to complete the re-structuring of its inefficient public sector, reform labour markets and finalise the privatisation of loss-making state industries. Despite the challenges ahead, Croatia is expected to complete negotiations for EU accession in 2010. |
October 2009 | Issue 15
Back from the brink?
Iceland’s spectacular and sudden economic collapse was the result of macroeconomic imbalances which built-up over time. These were driven by a booming economy and aggressive expansion by Icelandic banks. Iceland’s highly leveraged economy was vulnerable to adverse external shocks such as the global financial turmoil. Ultimately, the IMF had to step in to rescue it. The country has stabilised, and has several long-term advantages. Moreover, membership in the EU and adoption of the euro – if they proceed – could provide greater stability. Nonetheless, the future of this remote island nation remains uncertain. |
October 2009 | Issue 15
A stronger voice for the euro area
In a referendum held on 3 October, Irish voters approved the Lisbon Treaty by a margin of 67.1 to 32.9 per cent, representing a swing of more than 20 per cent from the outcome registered in June 2008, when an earlier version of the Treaty was rejected by 53.4 per cent. Brian Cowen, Ireland’s prime minister, welcomed the results, saying: “Today the Irish people have spoken with a clear and resounding voice. It is a good day for Ireland and it is a good day for Europe.” The referendum result greatly improves the chances that the institutional reforms set out in the Lisbon Treaty will come into effect next year. The treaty was signed by the Head of States and Governments in December 2007 and is intended to make the EU “more democratic, more transparent and more efficient”. European Economy News interviewed Benjamin Angel, Head of Unit for the economic aspects of regulatory policy in DG ECFIN, to find out how Lisbon will impact EMU. |
October 2009 | Issue 15
No continent is an island
The crisis shows that major economies of the world are highly interdependent. While not the direct cause of the banking crisis and subsequent recession, global macroeconomic imbalances were a contributing factor. A new framework for macro-financial surveillance must be built at the international level and the role of the IMF, the Financial Stability Board and other international organisations should be reinforced. |
October 2009 | Issue 15
Financial sector repair
Complete recovery of the real economy depends on restoring the financial system to full health. The various policy measures implemented thus far have been highly effective in averting a complete meltdown of the financial system and in helping to restore normal market functioning. The final step requires restoring the viability of individual financial institutions. Moreover, care must be taken to ensure that a level playing field is maintained and distortions are not created between countries or banks. |
October 2009 | Issue 15
Not over yet
The EU unemployment rate is expected to increase to above 10% in 2009, reversing the downward trend which started a decade ago. Nonetheless, there is some cause for hope. Member States have allocated considerable budgets and attention to addressing employment issues. Moreover, most of the measures implemented thusfar seem to be temporary, targeted and timely. Such measures have helped lessen the impact of the crisis on unemployment. They now need to be embedded in a comprehensive, coordinated strategy to prevent the rise in unemployment from becoming structural. |
October 2009 | Issue 15
Getting back on track
The EU’s response to the global downturn was immediate and forceful, and has included fiscal support amounting to 5% of GDP. But the process of repair and recovery remains incomplete. The EU must therefore maintain its strong policy response and avoid any premature withdrawal of stimulus, while at the same time beginning to design strategies for exiting from temporary support measures – when the time is right, and in a cooperative and coordinated way. This planning will help make the critical transition from crisis to self-sustaining recovery. |
July 2009 | Issue 14
EU steps in with emergency financing for three member states
European Union crisis funding is available to Member States in distress. Such is the severity of the financial whirlwind that has hit the Continent, the emergency mechanism has already been triggered three times over the last eight months. |
July 2009 | Issue 14
EU public finance takes a battering
Public finance throughout the European Union is under unprecedented stress. Collapsing economic activity has sharply reduced tax revenues. At the same time, rising unemployment has led to increasingly large state benefit payments. Governments have increased spending to stem further job losses while reducing certain taxes to support the most vulnerable groups in society and underpin consumer spending. The result is a dramatic increase in deficits that will take years to reverse. Together with measures to shore up the financial system, these high deficits are leading to ballooning government debt. DG ECFIN examines these developments in detail in its recently published Public Finances Report for 2009. |
July 2009 | Issue 14
Europe’s proactive response to the economic crisis
Amidst an economic downturn that is deeper and more protracted than originally expected, the European Commission is advancing a coherent programme for economic recovery. The proposed measures address regulation of the financial sector and structural reforms including support for the unemployed. The major elements of the Economic Recovery Programme will be proposed at the European Council on 18-19 June. |
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July 2009 | Issue 14
The clock is ticking…Ageing and the long-term sustainability of public finances
While exiting the financial and economic crisis is an immediate priority, the effects of ageing are already expected to impact some European countries within the next ten years and will have long-term consequences for Europe. Commissioner for Economic and Monetary Affairs Joaquín Almunia said we cannot afford a return to business as usual. Given the gravity and urgency of the situation, the Brussels Economic Forum devoted an entire afternoon to the issue. The presentation of the 2009 Ageing Report was followed by reactions of experts and a policy panel discussion on ageing and the economic crisis that included European Commissioners and Ministers of Finance from several European countries. |
July 2009 | Issue 14
The Brussels Economic Forum
Beyond the crisis: a changing economic landscape
While economic forecasters now believe the worst is behind us, speakers at the 10th annual Brussels Economic Forum nonetheless urged Europe to make broad and lasting reforms – in the areas of governance, financial supervision and surveillance, macroeconomic policy, social relations, industrial relations and educational systems. They also noted that Europe needs to find ways to gracefully exit from current interventions and to fix government budgets. Reforms should not only help Europe to exit from the immediate crisis, they said, but also address longer-term issues such as ageing and the sustainability of public finances. In that sense, the crisis can be seen as a window of opportunity. |
April 2009 | Issue 13
Containing the financial fallout
Now that the financial crisis has infected the wider economy, Europe and many other parts of the world are facing up to the prospect of a deeper and more drawn-out recession. But timely action is supporting global demand and has so far averted the financial meltdown some feared might occur. Now the EU and its Member States are implementing policies that will help Europe claw its way back to growth. |
April 2009 | Issue 13
Global plan for recovery and reform: the G20 London summit
With the EU at the forefront, leaders from the world’s largest 20 economies met in London at the latest G20 summit on 2 April to agree a coordinated action plan to put the world economy back on a growth path and to reform global financial institutions. |
April 2009 | Issue 13
Changeovers made easy
Introducing euro cash is a logistical challenge of the first order – and the EU has risen to it on every occasion. The collective experience gathered during the euro ‘big bang’ of 2002 and subsequent changeovers has set a ‘gold standard’ for the switch which maps out the smoothest route for new entrants into the euro area. |
April 2009 | Issue 13
Enlargement: good for all
The fifth wave of EU enlargement marked a milestone in reunifying Europe a decade and a half after the end of the Cold War. Twelve countries from Central and Eastern Europe and the Mediterranean have joined the EU over the past five years, ten of them in 2004 and two more in 2007. |
April 2009 | Issue 13
Productivity and growth: keeping the long term in perspective
Every year, DG ECFIN’s Annual Research Conference presents current research and insight into issues relating to Europe’s economy. Last year’s event, held on 16-17 October, heard from economists from DG ECFIN, universities and research institutes on the role of international flows of goods, services, capital and labour in boosting growth and productivity. |
January 2009 | Issue 12
From crisis to recovery: the tools for the job
As the financial crisis infects the economy at large, the EU has unveiled its economic action plan to give the European economy a much-needed boost. This is the latest in a series of robust coordinated measures to stave off a deepening recession and to turn crisis into opportunity with key reforms of the European and global financial sectors. |
January 2009 | Issue 12
The financial crisis of today: a rerun of the past?
The deep financial crisis of today has created an interest in the financial catastrophes of yesterday. Lars Jonung, Research Adviser at DG ECFIN, asks: is the present crisis a rerun of those of the past? |
January 2009 | Issue 12
Slovakia’s historic achievement
On the occasion of Slovakia’s entry to the euro area, European Economy News invited Ján Počiatek, Minister of Finance of the Slovak Republic, to contribute his view on the achievement. |
January 2009 | Issue 12
ECFIN documentary: 10th anniversary of the euro
1 January 2009 marked 10 years since the euro was launched. The single currency has confounded critics and doomsayers to become one of the greatest success stories of European integration. To celebrate this achievement DG ECFIN has produced a 26-minute video documentary on the story of the euro, from its beginnings as a vision in the minds of a few committed Europeans to its existence as an everyday reality for millions of people. |
January 2009 | Issue 12
MEMBER STATE PROFILE
The EU’s Nordics: responsive to changing circumstances
The EU’s three Nordic Member States – Denmark, Finland and Sweden – are examples of modern welfare states that have managed to balance high tax rates with competitive economies and strong fiscal discipline. All three have higher GDP per capita levels than the EU and the euro area’s average, and have achieved higher growth and employment rates than many other Member States over the past decade. |
October 2008 | Issue 11
The Lisbon Process: strengthening the delivery of reforms
How can the EU help Member States design the reform policies necessary to achieve higher economic growth and more jobs? Is the Lisbon Strategy effectively helping Member States? These and other questions lay at the heart of a conference – ‘Strengthening delivery of Lisbon structural reforms in the Member States – held on 19 September in Rome. |
October 2008 | Issue 11
The rising cost of food and energy
Food and energy prices have reached troubling highs. In two Communications, the Commission has come up with a package of recommended measures that deal both with the immediate crisis and pave the way, in parallel with other EU policies, to a gradual shift towards more sustainability and efficiency. |
October 2008 | Issue 11
Improving the quality of public finances
Public finances have improved significantly in the EU. However, the current economic downturn, demographic ageing, and global competition need addressing through a comprehensive fiscal policy approach that raises the quality of public finances and supports long-term economic growth, according to this year’s ‘Public Finances in EMU‘ report. |
October 2008 | Issue 11
Consolidating the euro’s position on the world stage
Over the past decade, the euro has firmly established itself as a world currency, acting as a pole of stability for the global economy and an inspiration for other regional groupings. Alongside the benefits, Europe must rise to the stewardship responsibilities of the single currency’s international status. |
October 2008 | Issue 11
Member State profile
The economy of Ireland: whither the Celtic Tiger?
Over the last two decades, Ireland achieved a remarkable economic transformation – from being one of the poorest to one of the richest Member States in the EU when measured by per capita income. It now faces a period of considerable economic uncertainty in common with many other European countries. Can the factors behind its transformation be harnessed in order to ensure the sustainability of its achievements during the current downturn? Furthermore, can the EU’s newest Member States use the Irish example as a model for success? A recent seminar organised by DG ECFIN attempted to answer these questions. |
June 2008 | Issue 10
Brussels Economic Forum 2008
Economic and Monetary Union: 10 years on
Organised by DG ECFIN, the annual Brussels Economic Forum (BEF) brings together EU leaders, economists and many other stakeholders to discuss major issues in European economics and economies. This year’s BEF, held on 15-16 May, took the first ten years of Economic and Monetary Union as its subject, and the recent DG ECFIN ‘EMU@10 report’ provided the background context. |
June 2008 | Issue 10
Brussels Economic Forum 2008
EMU: looking forward to the next decade
The overall mood was one of resounding success as the Brussels Economic Forum got under way with its first session, ‘Growth and Employment in Europe – Assessing Ten Years of EMU’. Figures past and present from the history of the euro came together to discuss achievements and unfinished business arising from EMU’s historic first decade. |
June 2008 | Issue 10
Brussels Economic Forum 2008
The euro in the world
Session II of the Brussels Economic Forum explored the global position of the euro, charting its rise to international prominence, its current status, and the opportunities and challenges which lie ahead. Leading figures from the world of policy-making and finance were at hand to give their expert opinions and expectations. |
June 2008 | Issue 10
Brussels Economic Forum 2008
Realising the full potential of EMU
The third session of the Brussels Economic Forum looked at how the euro area can be consolidated. Speakers considered issues such as economic policy governance, and the structural reforms needed to ensure the euro delivers growth according to its potential. |
June 2008 | Issue 10
Euro area profile
The economy of the euro area
The euro area has proved over the past ten years to have been a successful and increasingly integrated economy. Today, in many respects, the euro area can be viewed as a single economic entity comparable to other very large economies. |
June 2008 | Issue 10
Slovakia’s date with the euro
Slovakia has convincingly passed the first of the EU’s tests for euro entry. Armed with the Commission’s recommendation, it is well on the way to introducing the single currency, as expected, on 1 January 2009. |
June 2008 | Issue 10
Editorial: EMU@10
As we celebrate the first decade of Economic and Monetary Union (EMU) we should remember that the launch of EMU and the euro ten years ago marked a watershed in European integration. |
January 2008 | Issue 9
Cyprus and Malta: two islands, one currency
On 1 January the citizens of Cyprus and Malta woke up to a new year and a new currency as their adoption of the euro became a reality. Thanks to the extensive practical preparations beforehand – which drew heavily on past experiences in other euro area Member States – Cypriot and Maltese citizens, businesses and authorities were well prepared, and well informed about the details of the changeover. Here, we present two invited contributions – from the Minister of Finance of the Republic of Cyprus, Michael Sarris; and from the Prime Minister and Minister of Finance of Malta, Lawrence Gonzi – who share their countries’ experiences on the preparations for Economic and Monetary Union and the challenges and opportunities it offers for the future. |
January 2008 | Issue 9
More for less: The productive path to prosperity
The EU is one of the world’s most productive economies. However, since the mid-1990s, a transatlantic productivity gap has emerged. Although productivity growth has picked up in the past two years, this is largely cyclical and, consequently, the Union must persevere with and enhance certain aspects of its current reform strategy if Europe is truly to overcome its productivity problems. |
January 2008 | Issue 9
Shifting Lisbon into an upward cycle
The Commission’s strategic review of the relaunched Lisbon Strategy’s first three years has good news for the Union, but the next three-year cycle will need to keep up the pace. The review therefore sets out a whole series of clear and coherent recommendations for accelerated reform. |
January 2008 | Issue 9
Member State profile
The economy of Germany: powered by reform
As the largest economy in the EU, Germany’s economic performance is of concern to all. However, for the past 15 years it has faltered, partly owing to the burden of German reunification, but also to earlier, growing structural deficiencies. Today, after a long convalescence, it is now powering ahead. The question is whether it has reformed itself deeply enough to ensure a return to the sustained high growth rates of the past – an issue that was analysed in a recent seminar organised by DG ECFIN. |
October 2007 | Issue 8
A single market for the 21st century
DG ECFIN economists are contributing to the ongoing forward-looking review of the EU single market that the European Commission is preparing. Barriers to a truly single, internal market in the Union still exist, which means that many benefits have yet to be realised and the potential of the single market to contribute to a more dynamic, innovative and competitive EU is not being fully exploited. On the economic aspects of the single market review, DG ECFIN analysts suggest it is time to move towards a more economics-based and results-oriented approach using the targeted monitoring of selected markets and sectors. This could allow better policies and, in turn, bring real improvements to the operations of the single market. |
October 2007 | Issue 8
Kosovo: an economy on hold
The undecided status of Kosovo, currently under UN mandate, is hindering economic and social development in the province. The European Commission is providing financial assistance to support the Kosovo public budget, which is currently unsustainable, but a settlement of the final status of the province is badly needed for further economic development. The EU has particular responsibility for economic development in Kosovo, and DG ECFIN has contributed to the economic and financial aspects of the UN proposals for the future status of Kosovo. |
October 2007 | Issue 8
Finance for Europe’s growing enterprises
In the years leading up to 2013, the European Union will put €1.1 billion into a set of financial instruments which will help small firms throughout Europe gain better access to the funds they need in order to grow. Part of the EU’s Competitiveness and Innovation Programme, they are designed to bridge the gap between the financial sector and small enterprises looking for funds. They will build on the success of instruments that have helped more than 330 000 firms, employing close to 1.9 million people, find finance since 1998. |
October 2007 | Issue 8
Member State profile
The economy of the Czech Republic
Of the mainly Central and Eastern European countries that joined the EU in May 2004, the Czech Republic has one of the most developed and prosperous economies, characterised by strong growth, low inflation and continued heavy inflows of foreign investment. However, like many of its peers it must address persistent long-term unemployment and a high public deficit in order to prepare for eventual euro entry. |
July 2007 | Issue 7
The euro heads south
The euro-area climate became decidedly sunnier when, on 16 May, the European Commission backed the accession of Cyprus and Malta to the euro area from 1 January 2008. The two islands have not let the surrounding sea hamper their progressive economic convergence towards the other members of the euro area and are now making practical preparations to launch the single currency in the new year. |
July 2007 | Issue 7
Harvest today's windfalls for tomorrow's shortfalls
Favourable economic conditions over the past couple of years have provided Member States’ governments with a precious opportunity to improve the sustainability of their budgets. Whilst those with excessive deficits have done well to bring them down, too little has been done by most Member States to reduce deficits further. The opportunity of good economic conditions should enable all Member States to improve their budgetary frameworks for the longer term, but few are taking real advantage of this. The preventive arm of the Stability and Growth Pact – which has been overshadowed by the deterrent function embodied in the excessive deficit procedure – provides the tools to help Member States improve their budgetary situation for the future, so the Commission is recommending ways to make it more effective. |
July 2007 | Issue 7
ECFIN in action
On the road with the euro
DG ECFIN has launched a new travelling exhibition with the aim of communicating the facts, the figures, and the benefits of the single currency to the general public. With many Member States preparing to adopt the euro over the next decade, the push to inform citizens about the single currency is gaining momentum. Of course, most of us know what it is, but do we know why it came about, and how? Surveys from when euro cash was launched in 2002 reveal that in those countries where the general public were well informed, the euro was also well received. So, informing citizens on the euro is a critical part of preparations for entry into the euro area. |
July 2007 | Issue 7
Member State profile
The economy of Slovakia
Slovakia experienced a less painful transition than some of its neighbours from a centrally planned economy to a market economy, without, for example, hyperinflation or high poverty rates. Driven by rapid productivity growth accompanied by low inflation, the Slovak economy today is among the most dynamic of the ten mainly Central and Eastern European countries that joined the EU in May 2004. However, it still lags some of its peers in terms of per capita income levels. |
April 2007 | Issue 6
Europe and economic growth – by Tommaso Padoa-Schioppa
This article looks back at the ups and downs of economic growth in Europe over the last 50 years: the dynamism of the post-war period and the sluggish performance of the later decades; and calls for a change of emphasis from stability to flexibility at both national and European level to revitalise the European economy for the 21st century. |
April 2007 | Issue 6
Economic and monetary integration in Europe as seen from outside – by Michael Deppler
This article notes that there is much to celebrate on this 50th anniversary of European economic and monetary integration. And although ensuring satisfactory growth remains a considerable challenge, the successes of European integration to date suggest that with the same ‘forward-looking leadership’ there is no reason to suppose that Europe will not rise to that challenge. |
April 2007 | Issue 6
50 years of economic thought at the Commission – by Ivo Maes
This contribution looks at how economic thinking within the Commission has evolved over time, drawing on the main European schools of thought yet always remaining close to the policy-making process. The two principal concerns have been to further the process of economic integration and to strengthen the EU’s economic performance. |
April 2007 | Issue 6
Member State profile
The economy of Poland
Poland is at a crossroads. Economic growth is robust, inflation is under control, and the country is gradually closing the gap with the EU-25 average in terms of living standards. However, employment levels are low, investment is still below the economy’s potential, and public finances have yet to be put on a sound footing. Policy-makers have a critical opportunity to implement macroeconomic and institutional reforms to reap the full benefits of EU membership. |
January 2007 | Issue 5
Slovenia: a new year, a new currency
The curious among us occasionally flick through the coins in our purse while at the supermarket checkout – just on the off chance of finding something rare like a Vatican euro coin, or to admire the Greek owl or Italy’s Dante. Now we will have something new to look out for as on 1 January 2007 Slovenia adopted the single currency – the first of the newly acceded Member States to do so. Euro-area citizens can now look forward to seeing new euro coins engraved with Mount Triglav, storks and a portrait of France Prešeren, Slovenia’s national poet. Slovenia’s entry date to the euro area was confirmed in July 2006. Since then, the country has intensified and finalised its practical preparations for the cash changeover, an activity that involved many stakeholders and which, as well as building on the experience of the first-wave introduction, will also provide lessons for future enlargements of the euro area. |
January 2007 | Issue 5
Euro cash: five and familiar
It is already five years since euro cash was first introduced in January 2002. Euro banknotes and coins have now become an accepted part of life for the citizens of the 12 Member States that were the first to introduce euro cash. The euro is also used outside the euro area, notably in neighbouring countries and regions, as well as in tourist destinations all over the world, and has established itself as a major international currency. |
January 2007 | Issue 5
ECFIN in action
The 2006 EU Economy Review: adjustment dynamics in the euro area
The EU Economy Review is published annually by DG ECFIN and each year it presents an in-depth study of a topical issue in EU and euro-area economics. In this year’s Review, DG ECFIN economists take a close look at ‘adjustment dynamics’ in the euro area. In an ideal euro area, given the single monetary policy and tightly coordinated budgetary policies and constraints, one might expect that individual euro-area economies would behave in much the same way in response to events, such as common external shocks. But they do not. While some euro-area Member States show above-average growth rates and inflation, others show persistent low economic growth often with higher unemployment. The Review investigates the factors underlying such divergences. In particular, the authors look at adjustment mechanisms in euro-area economies and seek to identify possible policy lessons to ensure the smooth functioning of the euro area in the years ahead. |
January 2007 | Issue 5
Member State profile
The economies of Bulgaria and Romania
New EU Member States Bulgaria and Romania have hit the ground running as they endeavour to narrow the economic gap between them and their peers. Despite the very real challenges facing the two countries, robust economic and investment growth are making the painful transition period in the early 1990s following the collapse of the Soviet bloc an increasingly distant memory. |
October 2006 | Issue 4
Out of the red and into the grey
Ageing populations pose a major challenge to public finances across the EU. Under current policies government debt is set to rise from 63% of GDP today to nearly 200% by 2050. But, if resolute action is taken to ensure fiscal consolidation and implement broad structural reforms, this challenge need not turn into a crisis in the coming decade, concludes a new Commission report that compares the gaps in public finances between the ‘business as usual’ case and more prudent economic responses to the challenges. |
October 2006 | Issue 4
Financial markets: adjusting to change, adjusting to EMU
Every year, DG ECFIN hosts a research conference on a topical subject in European economics. On 7 and 8 September 2006, economics researchers from the EU and the US gathered in Brussels for the third annual DG ECFIN research conference on the subject of ‘Adjustment under monetary unions: financial market issues’. In an open market economy the financial markets are the main mechanism by which capital is allocated and flows: between industrial sectors, between countries and regions, and between banks and consumers. The introduction of the euro brought a huge boost to the single market for capital by reducing the costs and risks of transferring money between countries and offering the opportunity for a more efficient allocation of capital. However, while there has been some convergence, financial integration in the EU still has a long way to go. Participants at the conference discussed recent research on how the financial markets in the EU Member States have adjusted to the challenges and opportunities of monetary union and what are the lessons for the future. |
October 2006 | Issue 4
ECFIN in action
Showing the way to the euro
What do I need to do to prepare my company for the introduction of the euro? What will happen to my savings? Questions like these are widespread amongst the citizens of the new Member States, now preparing to adopt the euro in place of their national currency. To improve understanding of the challenges of euro introduction, the Commission has set up a group of experts in each country – the Euro Team – who can explain to citizens first hand how the euro will affect them, in their own language. |
October 2006 | Issue 4
Member State profile
The economy of Hungary
Hungary began its transition to a market economy earlier than other Central European economies, with a significant private sector developing well before the communist period ended. After some years of turbulence following the collapse of the Soviet bloc, Hungary began to build on these foundations, implementing structural reforms and stabilisation measures – resulting in an impressive macroeconomic performance by the end of the 1990s. However, in recent years results have been much more mixed and a period of large fiscal slippages is now threatening long-term growth and sustainability. The Government has adopted a new programme to address the situation. |
July 2006 | Issue 3
The Brussels Economic Forum: Renewal in Europe
The annual Brussels Economic Forum brings together politicians, economists, academics and civil society to discuss timely and important issues facing the European Union, with an emphasis, naturally, on the economics. The 2006 Forum was held on 18 and 19 May against a background of accelerating economic growth, both in Europe and globally. Over four sessions, participants heard from distinguished speakers on the risks that must be managed and the opportunities that must be grasped, and how the message of renewal must be clearly communicated to the people of Europe. |
July 2006 | Issue 3
The euro-area economy: a statement with intent
The first ‘Annual Statement on the euro area’ takes stock of the euro-area economy at a time when economic recovery is taking hold and ‘good times’ seem to be on the horizon. As the economic situation evolves, so too must economic policies. In the macroeconomic sphere, the priority is to seize the opportunity created by the improved economic outlook to lock in sound monetary and fiscal policies. In the microeconomic sphere, the euro-area's disappointing record of delivering growth and jobs calls for structural reforms to be stepped up. The main messages of the Annual Statement are summarised here. |
July 2006 | Issue 3
ECFIN in action
Predicting the impact of a bird flu pandemic
Last winter, fears grew of a possible avian flu pandemic sweeping the world. In the event, as birds migrated in advance of the summer, the number of cases of sick birds remained small, and as yet there has been no case of human-to-human transfer of the dangerous H5N1 strain of flu. But this autumn, birds will return to their winter habitats – where the infection is concentrated – and fears of pandemic will undoubtedly rise again over the winter. What would be the economic impact of a pandemic, and how much should Europe be preparing for one? |
July 2006 | Issue 3
Member State profile
The economy of Slovenia
In the latest in our series of profiles of Member States’ economies, we look at Slovenia. Less than three years after joining the EU, Slovenia seems set to be the first of the ten new Member States to adopt the euro. In January 2007, 2 million Slovenes will convert their tolars into euros, but reaching that milestone does not mean that the Slovenian government can sit back. The country still has some way to go to consolidate economic reform, in particular ensuring the economy is less vulnerable to possible shocks. |
April 2006 | Issue 2
Stability and Convergence Programmes: an eye on the economics
The Stability and Growth Pact (SGP) coordinates government fiscal policies. While it covers the EU as a whole, it is of particular importance for the euro area. The SGP contains common rules that ensure government debt and deficits are controlled within specific limits chosen to encourage a stable economic environment that will support sustainable growth and employment. |
April 2006 | Issue 2
Adopting the euro: economic communication and challenges
The relatively smooth introduction of euro banknotes and coins in 2002 was due in large part to well-planned preparations involving governments, public administrations and representatives of business and consumers. Examples of good practice are being shared with EU-10 administrations as they prepare for the euro; however, there are also lessons to be learned. |
April 2006 | Issue 2
The Spring European Council: gearing for growth
More investment, more jobs and less regulation are key priorities for action, confirm Europe’s leaders. Since the original Lisbon Strategy was launched in 2000, appreciable progress has been made in re-engineering Europe to meet the challenges of the globalised economy. Not enough perhaps, patchy in parts maybe, and not fast enough for some, but nevertheless structural reforms are happening, investment in R&D is rising and growth is heading upwards. |
April 2006 | Issue 2
The economies of Estonia, Latvia and Lithuania
As part of a series of profiles covering the Member States’ economies, we look at the three Baltic States. The three gained independence from the Soviet Union in 1991, and have since undergone major economic and social restructuring in their process of integration with the EU. Reforms continue as each country seeks to consolidate its position within the Union and lay the foundations for euro adoption. |
January 2006 | Issue 1
European Social Models: the challenge of an ageing population
While the European Social Model is a topical subject, in fact there does not appear to be any single model. Instead there are a wide variety of models in the Member States, reflecting different histories, circumstances and political choices that have shaped social welfare provision over the course of time. |
January 2006 | Issue 1
Putting globalisation to work for Europe
The 2005 edition of the EU Economy Annual Review is devoted to globalisation. It takes a considered, non-partisan look at the economic issues globalisation raises for Europe. And it pays particular attention to those aspects that concern the public most, such as potential job losses as businesses go overseas, and pressure on wages from cheap imports, and it puts these issues in context. |
January 2006 | Issue 1
The Autumn Economic Forecasts: growth picks up
The single market and, in particular, economic and monetary union, is driving increasing economic integration between the EU Member States. This growing interdependence requires deeper and broader coordination on economic policy-making within the EU. |
January 2006 | Issue 1
The economies of Cyprus and Malta
In the first of our series of profiles covering all the Member State economies, we look at Cyprus and Malta. Tourism is of major importance for both these Mediterranean islands. In contrast to the other eight countries which joined the EU in May 2004, neither had experience of centrally planned economies. |
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