|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Smooth euro changeover in Lithuania
Lithuania adopted the euro on 1 January 2015, thus becoming the 19th member of the euro area. With the dual circulation period ending on 15 January, a crucial part of the changeover was completed this week. The retail sector has coped well with the changeover process and parallel handling of two currencies, and Lithuanians’ transition to euro cash has been smooth. According to a recent Commission survey, by 14 January more than four out of five cash payments (87%) in shops were being made in euro only. Over two in three citizens (69%) polled said they were carrying only euro banknotes in their wallets. The cash changeover has been facilitated by the fact that residents make increased use of electronic means of payment. Euro coins were made available to Lithuanians already in December by way of euro coin starter kits. Practically all of the 900,000 starter kits were sold by 1 January. The Lithuanian Central Bank, Bank of Lithuania, reported that euro cash in circulation exceeded Lithuanian litas cash on 9 January.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In joining the euro, the Lithuanian people are choosing to be part of an area of stability, security and prosperity…the country is well-placed to thrive in the euro area.
|
|
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs
|
|
|
|
|
|
|
|
|
|
Delivery on track: Commission proposes Regulation for investment plan previously endorsed by European Council
The European Commission has adopted the legislative proposal for the European Fund for Strategic Investments, a key component of its ambitious Investment Plan for Europe to boost jobs and growth. The fund announced on 13 January will mobilise at least EUR 315 billion in private and public investment across the EU and be established in close partnership with the European Investment Bank. It will especially target strategic investments, such as in broadband and energy networks, as well as companies with fewer than 3,000 employees. The proposal also sets up a European Investment Advisory Hub to help with project identification, preparation and development, while a European Investment Project Pipeline will improve investors’ knowledge of existing and future projects. The European Council endorsed the fund at its meeting on 18 December 2014, and EU leaders asked that the fund be up and running by June so that the first investment projects can be rolled out in mid-2015. An EU task force has already identified 2,000 potential projects worth EUR 1.3 trillion.
|
|
|
|
|
|
|
|
|
|
|
|
|
Stability and Growth Pact: Commission issues guidance to encourage structural reforms and investment
The European Commission presented detailed new guidance on 13 January concerning how it will apply the existing rules of the Stability and Growth Pact. The aim is to strengthen the positive link between structural reforms, investment and fiscal responsibility in support of growth and jobs. To support structural reforms, the Commission may recommend that the Council allow temporary deviations from the medium-term budgetary objective or the fiscal adjustment path towards it for Member States implementing major structural reforms with a positive budgetary impact in the long-term. The Commission will take into account structural reform efforts when assessing whether to launch or extend an excessive deficit procedure under the corrective arm. In order to benefit from these provisions, Member States will have to present a structural reform plan with well-specified measures and credible timelines for their adoption and implementation. To support investment, the Commission has clarified the conditions for the implementation of the investment clause for Member States in the preventive arm under subdued economic conditions. Moreover, contributions to the European Fund for Strategic Investments also receive a special consideration both under the preventive and corrective arms of the Pact. To take better account of the economic cycle, the Commission will improve the modulation of the required fiscal adjustment for Member States under the preventive arm so that they make larger fiscal efforts during better times and smaller fiscal efforts during difficult economic times. The new guidance will be applied with immediate effect.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission proposes further EUR 1.8 billion in macro-financial assistance for Ukraine
The European Commission has proposed new macro-financial assistance (MFA) to Ukraine of up to EUR 1.8 billion in medium-term loans. The loans proposed on 8 January are intended to further bolster the Ukrainian economy, which has been hit hard by a deep recession and weighed down by the conflict in the east of the country. The new MFA programme, which is to be approved by the European Parliament and the Council of Ministers of the EU, is intended to assist Ukraine with the critical challenges the country is facing, such as a weak balance of payments and fiscal situation. The intention is also to help the new reform-oriented government strengthen the country and deal with economic and political challenges. The proposed macro-financial assistance will be linked to specific actions such as further fiscal consolidation, continuation of comprehensive reforms in the energy and banking sectors, judicial reforms, anti-corruption efforts, and improved macroeconomic management. Continuation of Ukraine's current IMF programme is also a prerequisite.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 2014: Economic Sentiment again stable in both the euro area and the EU, Business Climate Indicator decreases
In December 2014, the Economic Sentiment Indicator (ESI) remained stable for the second month in a row. It stayed unchanged (at 100.7) in the euro area and was also virtually flat in the EU (+0.1 points to 104.2). The flat development in euro-area sentiment was due to worsened confidence in industry, which outweighed improved confidence among consumers and managers in the services, construction and retail trade sectors. Amongst the largest euro-area economies, the ESI increased in Spain (+1.4) and Italy (+1.3), while it remained unchanged in Germany and the Netherlands, and decreased in France (-1.6). The largest Member States outside the euro area registered only slight improvements (+0.4 in Poland) or broadly flat developments (-0.1 in the UK). The December 2014 Business Climate Indicator (BCI) for the euro area decreased by 0.13 points to +0.04. Managers’ views on the stocks of finished products, overall order books, production expectations and, in particular, the level of past production deteriorated. The assessment of export order books remained broadly unchanged.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission meets Latvian EU Presidency to discuss 2015 work programme adopted on 16 December 2014
On 7-8 January, the College of Commissioners travelled to Riga for its traditional visit to the incoming Presidency of the Council of the European Union. The rotating Presidency is being held by Latvia for the first time, from January through June 2015. The College of Commissioners and the Latvian government discussed the priorities of the Latvian Presidency during a plenary session as well as in several “cluster debates” on topics including jobs and growth, and the investment package proposed by the Commission last year. The Vice-Presidents and Commissioners also held bilateral meetings with Ministers and engaged in a dialogue with key stakeholders and Members of the Saeima, the Latvian Parliament. On 9 January, President Jean-Claude Juncker and the Latvian Prime Minister Laimdota Straujuma also kicked-off the European Year for Development 2015 which focuses on setting a new course to ending poverty, promoting development and combating climate change for a sustainable post-2015 world.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Court of Justice Advocate General states that ECB Outright Monetary Transactions are compatible with EU Treaty
In a non-legally binding opinion issued on 14 January, the Advocate General of the European Court of Justice (ECJ), Cruz Villalón, has said that the European Central Bank’s Outright Monetary Transactions (OMT) programme is compatible, in principle, with the Treaty on the Functioning of the European Union but posed a number of conditions for the ECB’s OMT lawfulness. The ECJ involvement is a response to a request by Germany’s Federal Constitutional Court or “BVerfG”. The Advocate General found that the OMT programme is an unconventional monetary policy measure rather than economic policy measure and to retain such character the ECB should refrain from any direct involvement in the financial assistance programme that applies to the state concerned. The Advocate General further noted that the ECB should give a proper account of the reasons for adopting an unconventional measure such as the OMT programme. In the event of the programme being implemented, the ECB should permit the formation of a market price in respect of the government bonds, thereby ensuring that there continues to be a real difference between a purchase of bonds on the primary market and a purchase on the secondary market. The ECB should also comply with the requirements deriving from the principle of proportionality. The final ruling is expected for the summer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Navigating stormy seas: latest ECFIN video details EU response to the crisis
The third video in the series “European Economy Explained” was released on 17 December 2014. “Navigating stormy seas. Preventing future crises” uses the metaphor of preparing for and navigating stormy seas to help viewers to understand why the crisis happened and how Europe has responded. It explains how Europe is emerging from the economic crisis with new common institutions and a greater commitment to shared responsibility and solidarity. DG ECFIN launched the series of videos to explore key economic policy topics. Using animations in a storytelling format, the videos make understanding complex economic policies easy and entertaining. The first video, “Climbing higher together. Structural reforms for growth”, was launched on 2 December, and followed by a second video released on 9 December, “Everyday training. Managing our economies”.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Citizen’s Dialogues: Timmermans, Dombrovskis and Creţu engage in open discussion with citizens from Latvia, Estonia and Lithuania
The European Commission has launched a new series of Citizen’s Dialogues. The Dialogues give people across Europe a chance to talk directly with members of the European Commission. This is part of a clear commitment to better communication with citizens. At the Dialogue on 8 January, citizens from Latvia, Estonia and Lithuania exchanged views with Commission First Vice-President Frans Timmermans, Commission Vice-President Valdis Dombrovskis and Commissioner Corina Creţu in Riga. The Commissioners discussed important topics for Europe and the Baltic region, such as job creation, economic growth, the new EU Investment Plan, fiscal responsibility, structural reforms and social dialogue. The event was moderated by Edijs Boss, a TV3 news journalist and presenter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public Finances in EMU - 2014. European Economy 9/2014.
This annual report presents a review of recent policy developments and analytical findings in the area of public finances, including the latest improvements in the EU budgetary surveillance framework, a comparison between budgetary targets in the planning and the implementation phase, and an assessment of the effectiveness of expenditure-based consolidations in ensuring sound public finances in the EU. The report finds that fiscal consolidation efforts are bearing fruit: in 2014 the aggregate headline fiscal deficit for the EU is expected to be decline to 3% of GDP for the first time since 2008, while only 11 Member States now remain subject to the Excessive Deficit Procedure, compared to 16 at the end of 2013. The report notes, however, that Member States still often miss their budgetary targets (by up to 0.5 percentage points of GDP on average) because they tend to be overly optimistic or overly ambitious. The analysis concludes that Member States should focus on the more fixed and less discretionary components of their spending.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directorate-General for Economic and Financial Affairs
|
|
|
|
