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Informal meeting of members of the European Council and Euro area summit follow-up © The Council of the European Union Economic forecast – autumn 2011: EU economic growth at a standstill
- EU Economic governance: Council devises surveillance scoreboard and adopts final legal texts
- G20 leaders reach broad agreement to reinvigorate growth, create jobs and ensure financial stability
- Review mission to Romania concludes programme remains on track
- Public-Private Partnerships for energy efficiency and the environment
- Opening the world for small enterprises to enhance EU growth
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Informal meeting of members of the European Council and Euro area summit follow-up © The Council of the European Union Economic forecast – autumn 2011: EU economic growth at a standstill

The EU economic recovery has stalled. Sharply deteriorated confidence is affecting investment and consumption, weakening global growth is holding back exports, and the urgent need for fiscal consolidation is weighing on domestic demand. GDP in the EU is now projected to stagnate until well into 2012. Growth for the whole of 2012 is forecast at about ½%. By 2013, a return to slow growth of about 1½% is expected. No real improvements are projected for labour markets, and unemployment is forecast to remain at the current high level of around 9½%. Inflation is set to fall back below 2% over the coming quarters. Progress on fiscal consolidation is expected, with public deficits set to decline to just above 3% by 2013. In view of the weak GDP growth, the risk of a double-dip recession is real, with the main downside risks stemming from sovereign debt worries, the financial industry and world trade.

Viewpoint
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The key for the resumption of growth and job creation is restoring confidence in fiscal sustainability and in the financial system and speeding up reforms to enhance Europe's growth potential. There is a wide consensus on the necessary policy action. What we need now is unwavering implementation. On my part, I will start using the new rules of economic governance from Day one.

Olli Rehn, European Commission Vice-President for Economic and Monetary Affairs
"
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© The Council of the European Union, 2011
EU Economic governance: Council devises surveillance scoreboard and adopts final legal texts

Meeting in Brussels on 7-8 November, European leaders agreed on a scoreboard that will be used for the surveillance of macroeconomic imbalances. The initial scoreboard will cover external and internal indicators such as current account balance, nominal unit labour costs, real effective exchange rates, house prices, and the general government sector debt. Results will form the basis forthe newalert mechanism being put in place by the Commission.The scoreboard is part of the package of six legislative proposals that was adopted by the Council to strengthen economic governance in the EU – and more specifically in the euro area. In other work, the Council also adopted a directive amending the financial conglomerate directive in order to close loopholes and ensure appropriate supplementary supervision of financial entities in a conglomerate.

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© European Union, 2011
G20 leaders reach broad agreement to reinvigorate growth, create jobs and ensure financial stability

At the G20 Summit in Cannes on 3-4 November, Heads of State and Government discussed the worsening global economic situation. They agreed to coordinate their policies to reinvigorate economic growth, create jobs and ensure financial stability. Advanced countries agreed to build confidence, support growth and to achieve fiscal consolidation. Countries with large current account surpluses committed to increase domestic demand and enhance exchange rate flexibility. Another important issue was the global financial transaction tax. The Commission informed the G20 about the proposals it has put forward in the EU. G20 Leaders also agreed to make the international monetary system more stable and resilient by ensuring that additional resources for the IMF could be mobilised quickly when necessary. Furthermore, they gave a mandate to finance ministers to work on a menu of options including bilateral loans fromG20 Members, a new allocation of Special Drawing Rights, or other structures within the IMF funded by members or other donors.

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Romanian Parliament Bucharest @ Thinkstock.com
Review mission to Romania concludes programme remains on track

Staff teams from the European Commission (EC) and the International Monetary Fund (IMF) visited Bucharest from 25 October until 7 November for the regular review of Romania’s economic programme.The objectives of the program are to solidify economic growth while maintaining macroeconomic and financial stability. The teams’ assessment is that the programme remains on track. All IMF performance criteria for end-September were met. For 2011, the mission projects real GDP growth of about 1½%, thanks in part to a good harvest, but has revised its growth forecast for 2012 downward to 1¾ to 2¼% percent in light of the more difficult economic environment in Europe. It was the first formal review of Romania's Precautionary Assistance Program by the EC (providing up to EUR 1.4 billion) and the third review by the IMF (providing up to around EUR 3.5 billion). Subject to completion of this review by the IMF’s Executive Board, their fourth tranche of Special Drawing Rights 430 million (around EUR 490 million) will become available in case Romania would need to activate it.

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© Istockphoto
Public-Private Partnerships for energy efficiency and the environment

In the EU, partnerships between the public and the private sector keep gaining importance. One very fruitful form of Public-Private Partnerships (PPP) happens in the area of energy efficiency and environment projects. They were on the agenda of the Private Sector Forum meeting organised on 8 November by the Directorate-General for Economic and Financial Affairs and the European PPP Expertise Centre (EPEC) in cooperation with the European Economic and Social Committee. This biannual event has proven to be a valuable source of information for the private sector on the Commission’s and EPEC's work on PPP and a sounding board for new ideas. Vice versa, it is also an excellent opportunity for the Commission and the EPEC to receive suggestions from the private sector on ways to better promote PPP projects through policy adjustments. Participants discussed the latest Commission and European Investment Bank initiatives in the PPP market and shared their views on the current trends and the role of PPPs in the future of financing energy efficiency and environmental infrastructure.


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© European Union, 2011
Opening the world for small enterprises to enhance EU growth

The European Commission has announced a new strategy designed to help European small and medium sized enterprises (SMEs) better profit from fast growing international markets, such asin China, India, Russia and Brazil. On 9 November, the Commission published a Communication entitled ‘Small Business, Big World - a new partnership to help SMEs seize global opportunities’. The Communication notes that only 13% of EU SMEs are internationally active outside the EU and that SMEs face obstacles to tapping the global market. Given the current economic context, however, exports outside the EU to expanding markets can be a solid source of economic growth.

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Publications
The EU's neighbouring economies: Coping with new challenges, Occasional Paper 86 © European Union, 2011

The EU's neighbouring economies: Coping with new challenges, Occasional Paper 86

This paper reviews recent economic developments in the countries neighbouring the EU. The period since the global financial crisis has been characterised by divergent economic experiences within countries on the EU’s periphery. Most of the EU’s Eastern neighbours, were hit hard by the crisis, but have since embarked on a recovery that has gradually solidified over the past 18 months. Meanwhile, experience in the Mediterranean “neighbourhood” has been overshadowed by the region’s recent political upheaval. Alongside obvious political challenges, popular unrest has also brought many economic issues to the fore. The paper describes recent economic developments in the EU's neighbours both at a regional level and in a country-by-country analysis. It also discusses the main economic factors underlying the ongoing social and political unrest in parts of the Southern Mediterranean, and examines trends in exchange rate policy and competitiveness in the EU’s two neighbouring regions, identifying patterns and policy issues.



 
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Agenda Calls
14-17 November
Strasbourg
European Parliament Plenary
21 November
Brussels
DG ECFIN. Annual Research Conference 2011 - New growth models for Europe
24 November
Brussels
Property taxation and enhanced tax administration in challenging times
29 November
Washington
Transatlantic Economic Council meeting
29-30 November
Brussels
Eurogroup/ECOFIN meetings
30 November
Workshop: Public finances in times of severe economic stress: the role of institutions
9 December
Brussels
European Council
12-15 December
Strasbourg
European Parliament Plenary
16-19 January 2012
Strasbourg
European Parliament Plenary
23-24 January 2012
Brussels
Eurogroup/ECOFIN meetings
25-29 January 2012
Davos-Klosters Switzerland
World Economic Forum annual meeting 2012
 
Call for papers. "EU balance-of-payments assistance for Latvia: Foundations of Success" (working title). Deadline for selected authors:31 January 2012
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Directorate-General for Economic and Financial Affairs