European Commission enews
Economic Finance
Jonathan HILL, Member of the EC, during the press conference on Action Plan for the Capital Markets Union © European Union Capital Markets Union: an EU Action Plan to boost business funding and investment financing
- Tax Reforms Report analyses how tax systems in EU Member States can support growth, fiscal sustainability and fairness
- New financing agreements to support SMEs in Germany and Portugal; Investment Plan road show visits Singapore and Beijing
- End of the precautionary Balance of Payments programme for Romania
- Business Climate Indicator increases; Economic Sentiment Indicator improves markedly in euro area, modestly in EU
- Smart Taxation - A winning strategy: video explains how taxes can support growth, employment, and social fairness
- "Real Economy" episode explores how enterprises in Italy have thrived by tapping into new sources of financing and through innovation
- Flash inflation estimate, September
Publications
Graph of the week
Selected speeches
Classifieds
Agenda
Top story
Jonathan HILL, Member of the EC, during the press conference on Action Plan for the Capital Markets Union © European Union Capital Markets Union: an EU Action Plan to boost business funding and investment financing

The European Commission has announced an action plan to help build a true single market for capital across the 28 EU Member States. The action plan announced on 30 September aims to tackle investment shortages head-on by increasing and diversifying the funding sources for Europe's businesses and long-term projects. Alternative sources of finance, complementary to bank-financing - including capital markets, venture capital, crowdfunding and the asset management industry - are more widely used in other parts of the world, and should play a bigger role in providing financing to companies that struggle to get funding, especially SMEs and start-ups. As part of the plan, the Commission unveiled a first set of measures to re-launch high-quality securitisation, and to promote long-term investment in infrastructure. In addition, the Commission will announce proposed changes to the Prospectus Directive before the end of the year, with a view to making it easier and less expensive for SMEs to raise capital.

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More Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness
The most important part of the Investment Plan for Europe is removing obstacles to investment by deepening the single market
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Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness

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Cover of the publication 'Tax reforms in EU Member States 2015' © European Union
Tax Reforms Report analyses how tax systems in EU Member States can support growth, fiscal sustainability and fairness

By improving the design of their tax systems, EU Member States can strengthen their public finances, support growth and job creation, strengthen economic stability, and increase fairness. The European Commission's annual Tax Reforms Report, which was released on 28 September, contributes to the discussion on better taxation by examining recent tax policy reforms across the EU. It includes indicator-based assessments that provide an insight into the relative performance of Member States' tax systems in terms of efficiency, effectiveness and equity. The report finds that the overall tax burden, as a percentage of GDP has been increasing over the last few years, although it is expected to decline slightly in 2015. Moreover, there is little evidence of a significant shift from labour taxation - which is relatively high in the EU - towards more growth-friendly sources of taxation. The report also examines how tax reform can help ensure fiscal sustainability, possible ways to improve the design of taxes in specific areas, and the effect of tax and benefit systems on changes in inequality.


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Investment Plan webpage © European Union, 2014
New financing agreements to support SMEs in Germany and Portugal; Investment Plan road show visits Singapore and Beijing

The European Investment Fund (EIF) and three Portuguese banks signed guarantee agreements worth EUR 420 million on 18 September to increase lending to small and medium-sized enterprises (SMEs) in Portugal and the EIF and the German promotional bank KfW Bankengruppe signed a EUR 1 billion agreement the following day to support over 15,000 start-ups and young small enterprises. These transactions have the backing of the European Fund for Strategic Investments (EFSI), which is at the heart of the Commission's EUR 315 billion Investment Plan for Europe. In related news, Vice-President Katainen, responsible for Jobs, Growth, Investment and Competitiveness, took the Investment Plan road show outside Europe for the first time. He visited Singapore on 25 September and led the Commission delegation at the High-level Economic and Trade Dialogue in Beijing on 28 September. During the dialogue, China announced that it would contribute to the Investment Plan for Europe, becoming the first non-EU country to do so, and the two sides agreed to set up a joint working group to increase cooperation between the EU and China on all aspects of investment.


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Romania flag C iStockphoto
End of the precautionary Balance of Payments programme for Romania

On 30 September, the 2013-2015 precautionary Balance of Payments (BoP) programme for Romania came to an end. This was the third BoP programme for Romania and the second one of a precautionary nature. The Commission had guaranteed EUR 2 billion as a precautionary credit line under this programme; no disbursement was requested or made. The programme ran in parallel with an IMF Stand-By Arrangement. It provided support to Romania to consolidate its macroeconomic, fiscal and financial stability; increase the resilience and growth potential of its economy; enhance administrative capacity; reform the tax administration; improve public financial management; and restructure state-owned enterprises. Post-programme surveillance (PPS) will now start and will involve semi-annual visits to assess the economic, fiscal and financial situation of the country until May 2018. In addition to PPS, the Commission will continue its close cooperation with the Romanian authorities in the context of the European Semester and the fiscal and macroeconomic surveillance frameworks.


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People © European Union
Business Climate Indicator increases; Economic Sentiment Indicator improves markedly in euro area, modestly in EU

In September, the Business Climate Indicator (BCI) for the euro area increased (by 0.14 points to +0.34). Managers' production expectations brightened, as well as, to a lesser extent, their views on past production and total order books. The current stock of finished products, by contrast, was assessed more negatively, while the appraisal of export order books remained broadly unchanged. In addition, the Economic Sentiment Indicator (ESI) improved markedly in the euro area (by 1.5 points to 105.6) and, somewhat more modestly, in the EU (by 0.6 points to 107.6). Consumer confidence remained broadly unchanged. Amongst the largest euro-area economies, the ESI rose in Italy (+3.4), Germany (+1.9), the Netherlands (+1.2) and France (+0.9), while it dropped in Spain (-0.9). The ESI booked more modest gains in the EU than in the euro area due to decreases in the headline indicators of the largest non-euro area EU economies, the UK (-2.8) and Poland (-0.7).


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Image from the Smart Taxation video © European Union
Smart Taxation - A winning strategy: video explains how taxes can support growth, employment, and social fairness

The 7th video in the series "European Economy Explained" was released on 29 September. "Smart Taxation - A winning strategy" explains that taxes can do more than just fund public services; they can also support growth, employment, investment, economic competitiveness and social fairness. Using the metaphor of an athletics competition, the video explains that the Commission analyses the tax policies of Member States and provides advice to them. Moreover, it also encourages administrative efficiency and is a leading player in the international fight against tax evasion and avoidance. The video notes that Europe relies too heavily on labour taxes, which can, for example, make it expensive to hire new employees. Instead, by shifting taxation to other areas such as pollution, Europe can promote growth and employment. The Directorate-General for Economic and Financial Affairs (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.


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Image from the Real Economy episode on how enterprises in Italy have thrived © European Union
"Real Economy" episode explores how enterprises in Italy have thrived by tapping into new sources of financing and through innovation

Small and medium-sized businesses (SMEs) are the heart of Europe's economy. Yet some SMEs have not survived the financial crisis, and many others have had to innovate in order to have a future. For its episode "Future of SMEs: Europe's economic powerhouses" Real Economy travelled to Italy to meet some of the entrepreneurs who have risen to the challenge, often by tapping into new sources of financing when bank lending dried up and through increased innovation. Many shoe producers in Italy's Marche region, for example, invested in new technologies and created more innovative products. According to Emma Marcegaglia, Co-CEO of the Marcegaglia Group and President of Business Europe, nearly all SMEs had to offer higher valued-added products and boost their exports. She believes that in a constrained lending environment, SMEs' access to capital markets will remain critical. Dario Scannapieco, Vice-President of the European Investment Bank, says clear rules will also be needed to provide investors with greater certainty. "Real Economy" aims to bring the complexities of economic matters in the EU closer to Euronews' daily audience of 6.5 million viewers. Besides watching it on TV, viewers can also follow it online - live or on demand.


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Inflation © iStockphoto
Flash estimate: Euro area annual inflation down to -0.1%

Euro area annual inflation is expected to be -0.1% in September 2015, down from 0.1% in August 2015, according to a flash estimate from Eurostat, the EU statistical office. Looking at the main components of euro area inflation, the category food, alcohol & tobacco is expected to have the highest annual rate in September (1.4%, compared with 1.3% August), followed by services (1.3%, compared with 1.2% in August), non-energy industrial goods (0.3%, compared with 0.4% in August) and energy (-8.9%, compared with -7.2% in August).


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Publications
Forward to a New Normal: An overview of the ECFIN Fellowship Papers. European Economy. Economic Briefs 2
Forward to a New Normal: An overview of the ECFIN Fellowship Papers. European Economy. Economic Briefs 2.

With a return to pre-crisis economic policies neither possible nor desirable, ECFIN asked scholars to map out the 'new economic normal'. This Economic Brief provides an overview of the contributions to ECFIN's 2014-2015 Fellowship Initiative "Growth, integration and structural convergence revisited". The scholars focused in particular on medium-term growth perspectives; newly emerging architectures in areas such as finance; and European convergence and integration mechanisms. The individual papers, Discussion Papers 6 to 16, are listed below.

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From mind the gap to closing the gap. Avenues to reverse stagnation in Europe through investment and productivity growth. European Economy. Discussion Papers 6.
Human capital, inequality and growth. European Economy. Discussion Papers 7.
EU Policy making and growing inequalities. European Economy. Discussion Papers 8.
Monetary policy, bank bailouts and the sovereign-bank risk nexus in the euro area. European Economy. Discussion Papers 9.
The legacy debt and the joint path of public deficit and debt in the euro area. European Economy. Discussion Papers 10.
Cross-border resolution of global banks. European Economy. Discussion Papers 11.
Small firms and domestic bank dependence in Europe's great recession. European Economy. Discussion Papers 12.
Monetary Union and fiscal and macroeconomic governance. European Economy. Discussion Papers 13.
The centralization-decentralization issue. European Economy. Discussion Papers 14.
The eurozone's crisis of democratic legitimacy. Can the EU rebuild public trust and support for European economic integration? European Economy. Discussion Papers 15.
Political economy of EMU. Rebuilding systemic trust in the euro area in times of crisis. European Economy. Discussion Papers 16.
Household saving rates in the EU: Why do they differ so much? European Economy. Discussion Papers 5
Eurostat. European statistics for European policies - A wealth of data to underpin the Commission priorities.
Graph of the week
Graph on household savings in the EU
Graph on household savings in the EU
Household savings play an important role in financing private and public investment
Selected speeches
Commissioner Hill. Introductory remarks at the launch of the Capital Markets Union Action Plan. Speech 15/5749 of 30 September.
President Juncker. EU Budget focused on Results. Speech 15/5696 of 22 September.
Vice-President Dombrovskis. Humboldt University: The Euro and the future of Europe. Speech 15/ of 21 September.
Commissioner Jonathan Hill. European Banking Federation, 2015 Annual High Level Conference. Speech 15/ of 17 September.
Classifieds
- Citizens' Dialogues
- Feedback. Blueprint of the EU Customs Union governance reform
- Public consultation on Venture Capital.Deadline 6 January 2016.
- Public consultation on Covered Bonds. Deadline 6 January 2016.
- Call for evidence: Cumulative impact of financial legislation. Deadline 6 January 2016.
- Public consultation on Standards for the Digital Single Market. Deadline: 16 December
- Open consultation. Geo-Blocking and other geographically-based restrictions. Deadline: 18 December 2015
- Open consultation. Regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy. Deadline: 18 December 2015
- Open consultation. Modernising VAT for cross-border e-commerce. Deadline: 18 December 2015
Agenda
5-6 October
Luxembourg
Eurogroup/ECOFIN
5-8 October
Brussels
European Parliament Plenary
9-11 October
Lima, Peru
IMF/World Bank Group annual meeting
14 October
Brussels
European Parliament Plenary
15-16 October
Brussels
European Council
22 October
Malta
ECB Governing Council meeting
26-29 October
Strasbourg
European Parliament Plenary
5 November
Brussels
Autumn economic forecasts
9-10 November
Brussels
Eurogroup/ECOFIN
Date to be confirmed
Brussels
Annual Growth Survey
Date to be confirmed
Brussels
Alert Mechanism report
Date to be confirmed
Brussels
Stability and Growth Pact: EDP update
11 November
Brussels
European Parliament Plenary
15-16 November
Antalya, Turkey
G20 Summit
23-26 November
Strasbourg
European Parliament Plenary
2 December
Brussels
European Parliament Plenary
3 December
Frankfurt, Germany
ECB Governing Council meeting
7-8 December
Brussels
Eurogroup/ECOFIN
14-17 December
Strasbourg
European Parliament Plenary
17-18 December European Council
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Directorate-General for Economic and Financial Affairs