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EU leaders endorse plans for investment, structural reforms and fiscal responsibility; Greece scheduled to submit reform plan
Meeting on 19-20 March, EU leaders exchanged views on the economic situation in Europe and on the implementation of key structural reforms undertaken by Member States. They invited Member States to reflect the investment, structural reform and fiscal priorities identified in the Annual Growth Survey, which kicks off the European Semester of economic and budgetary policy coordination, in their forthcoming National Reform Programmes and Stability or Convergence Programmes. The Heads of State and Government also welcomed the adoption by the Council of the general approach on the European Fund for Strategic Investments (EFSI) and invited the co-legislators to adopt the legislative act by June, so that the EFSI can be fully operational by mid-2015. EU leaders also discussed the state of play in the negotiations with the US on the Transatlantic Trade and Investment Partnership, and stressed that the EU and the US should make all efforts to conclude the talks by the end of the year. As regards the financial assistance for Greece, it was agreed that the Greek government would submit a full list of specific reforms in the coming days as next step in the negotiations.
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Council agrees on negotiation position with European Parliament on EU investment fund; road show continues with stops in Finland, France and Portugal
On 10 March, EU finance ministers agreed on their general approach for the negotiations with the European Parliament (EP) on a Regulation proposed by the Commission on 13 January to set up the European Fund for Strategic Investments (EFSI), a key component of the Commission’s EUR 315 billion Investment Plan for Europe. The fund would be built on EUR 16 billion in guarantees from the EU budget and EUR 5 billion from the European Investment Bank. Negotiations with the EP will begin as soon as the latter has agreed upon its negotiating position, scheduled for the second half of April. A draft report about EFSI´s governance structure and the allocation of budgetary resources has been published by the Parliament’s budget and economic and monetary affairs committees. The EU aims to reach overall agreement by June so that new investments can be made as early as mid-2015. Also on 10 March, France and Italy announced that they would each contribute EUR 8 billion to EFSI via their national promotional banks, after Spain´s and Germany´s earlier commitments (EUR 1.5 billion and 8 billion respectively). Meanwhile, the investment plan road show continued with stops in Finland from 5-6 March; Paris and Marseille, France on 12 and 13 March; and Portugal on 16 March.
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Commission adopts first package to promote tax transparency
The Commission adopted a first set of tax transparency measures on 18 March, as part of its ambitious agenda to tackle corporate tax avoidance and harmful tax competition in the EU. A key element of this Tax Transparency Package is a proposal to introduce the automatic exchange of information between Member States on their tax rulings. It will enable Member States to detect certain abusive tax practices by companies and take the necessary action in response. The package follows a first orientation debate by the College of Commissioners on 18 February. The Commission is rapidly making good on the pledges it made in its Work Programme to clamp down on tax avoidance and to ensure that taxes are paid in the country where profits are generated.
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February 2015 annual inflation up to -0.3% in the euro area and -0.2% in the EU
Euro area annual inflation was -0.3% in February 2015, up from -0.6% in January. In February 2014 the rate was 0.7%. EU annual inflation was -0.2% in February 2015, up from -0.5% in January. A year earlier the rate was 0.8%. These figures were released on 17 March by Eurostat, the statistical office of the EU. In February 2015, negative annual rates were observed in twenty Member States. The lowest annual rates were registered in Greece (-1.9%), Bulgaria (-1.7%) and Lithuania (-1.5%). Positive annual rates were recorded in Sweden (0.7%), Malta (0.6%), Austria (0.5%), Romania (0.4%) and Italy (0.1%). Compared with January 2015, annual inflation fell in six Member States, remained stable in four and rose in seventeen. The largest upward impacts to euro area annual inflation came from restaurants & cafés (+0.12 percentage points), rents (+0.11 pp) and tobacco (+0.07 pp), while fuels for transport (-0.64 pp), heating oil (-0.19 pp) and telecommunications (-0.06 pp) had the biggest downward impacts.
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“How can the EU help millions of young people into employment?” Real Economy episode seeks answers
In its episode broadcast on 10 March, Real Economy looked at EU efforts to help young people get into the workplace. Youth unemployment is a huge problem, and while the situation is slowly improving, there are still enormous differences among EU Member States. Real Economy spoke with young people in the city of Porto, Portugal about their hopes and dreams, and what they think of the help that governments are providing to get young people into employment, and also reported from Dublin, Ireland, where one scheme has led to four out of five young people being given an opportunity to get out of the destructive world of unemployment. The show also explained the EUR 6.4 billion youth guarantee, which aims to help young Europeans to find a traineeship, an apprenticeship, further education or a job within four months after leaving school. All EU countries have a national Youth Guarantee Implementation Plan. Each 12-minute episode of “Real Economy” deals with topical EU policy issues, and every two weeks, a new episode premieres at 10.45 am CET and is repeated 12 times throughout the week. “Real Economy” can also be viewed online. DG ECFIN co-funds the programme together with other Commission services.
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The contraction of imports in Spain: a temporary phenomenon? European Economy. Country Focus 02.
The amount Spain imports has fallen considerably in recent years, but what explains this trend? To answer this question, this paper analyses the relationship between imports, relative prices and internal and external demand. It finds that although improved competitiveness has indeed helped Spain to reduce its imports, a large part of the fall has come from the decline in domestic demand. With domestic demand and imports already starting to pick up again, maintaining the reduction in imports that has been achieved will depend on continued improvements in competitiveness and less dependence on domestic demand for growth.
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Directorate-General for Economic and Financial Affairs
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