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EC Press conference © European Union, 2011 The 2012 Annual Growth Survey: Efforts must be stepped up, says Commission
- EU Economic governance: Council devises surveillance scoreboard and adopts final legal texts
- Commission launches a public consultation on stability bonds
- DG ECFIN Annual Research Conference 2011: Towards a new ‘prosperity triangle’?
- Task Force for Greece issues first progress report
- Review mission to Portugal emphasises need for structural reforms
- Stricter regulatory framework for rating agencies proposed
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EC Press conference © European Union, 2011 The 2012 Annual Growth Survey: Efforts must be stepped up, says Commission

Faced with a deteriorating economic and social situation, more efforts are needed to put Europe back on track and sustain growth and jobs. That was the key message from the European Commission’s 2012 Annual Growth Survey (AGS), presented on 23 November as part of a package of measures to enable new action for economic growth, governance and stability. The Survey calls on the EU and its Member States to focus on five priorities: pursuing differentiated, growth-friendly fiscal consolidation; restoring normal lending to the economy; promoting growth and competitiveness; tackling unemployment and the social consequences of the crisis; and modernising public administration. The AGS includes a list of pending or future proposals aimed at boosting growth, which the Commission wants to be fast-tracked through the EU legislative process. It will also be the starting point for the second European Semester of economic governance.

To return to growth, Member States need to raise their game when it comes to implementing their commitments to structural reforms, as well as embrace deeper integration for the euro area.

President of the European Commission José Manuel Barroso
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© iStockphoto - Fredfroese
EU Economic governance: Commission proposes stronger budgetary surveillance in the euro area

Tighter economic and budgetary surveillance is to be introduced in the euro area under proposals unveiled by the European Commission on 23 November. In the form of two draft Regulations, the Commission is proposing to enhance the coordination and surveillance of budgetary processes for all euro-area Member States, and especially for those countries that have excessive deficits, that are experiencing or are at serious risk of financial instability, or that are under a financial assistance programme. The proposals build on what has already been agreed in the ‘Six Pack’ set of legislative measures on EU economic governance which will enter into force in mid-December 2011, as the Commission bids to accelerate efforts for economic renewal in the EU.

© iStockphoto
Commission launches a public consultation on stability bonds

The European Commission has adopted a Green Paper on Stability Bonds which launches a public consultation until 8 January 2012 on the feasibility of common issuance of sovereign bonds among the Member States of the euro area. The Green Paper sets out three main options: the full substitution by Stability Bond issuance of national issuance, with joint and several guarantees; the partial substitution by Stability Bond issuance of national issuance, with joint and several guarantees; and the partial substitution by Stability Bond issuance of national issuance, with several but not joint guarantees. For each option, it delineates the likely effects on Member States’ funding costs, European financial integration, financial market stability and the global attractiveness of EU financial markets. It also considers the risks of moral hazard posed by each approach, as well as its implications in terms of Treaty change.The objective of the Green Paper is to have a broad debate on the issues raised It also allows items to be flagged that the Commission might not have considered so far. In parallel, the Commission will seek the views of key stakeholders, including Member States, the European Parliament, national parliaments, experts and the wider public.

© European Union, 2011
DG ECFIN Annual Research Conference 2011: Towards a new ‘prosperity triangle’?

The Annual Research Conference 2011 organised by DG ECFIN took place on 21 November under the heading "New growth models for Europe", with participants discussing how best to secure Europe’s economic revival and emergence from crisis. ECFIN Commissioner Rehn emphasised the importance of fiscal consolidation and the urgency of designing and implementing smart growth policies across the EU. One notable concept in the conference discussions was that Europe should pursue a ‘prosperity triangle’ targeting not only economic growth but growth, stability and equity:- growth should be generated by completing the EU single market, where unexplored potential remains in many sectors; stability should be ensured through sustainable public finances and well-functioning financial markets, thus restoring confidence in the euro; and equity meaning the revival and strengthening of the European social model, where the benefits of growth are fairly shared.

Greek Flag © Istockphoto
Task Force for Greece issues first progress report

The European Commission's technical-assistance Task Force for Greece presented its first quarterly report to Commission President Barroso and the Greek government on 15 November. The report sets out the Task Force's work programme and its achievements since commencing operations on 1 September, notably in three priority areas: sustaining economic activity; ensuring efficient tax administration and sound public finance management; and improving the efficiency of public administration. The focus now is on finalising, with the Greek authorities, a comprehensive road-map of technical assistance, with work on a number of key issues such as tax administration and administrative reform already moving into the implementation phase. Meeting the new Prime Minister of Greece, Lucas Papademos, on 21 November in Brussels, Barroso said that the Task Force was working well with the Greek authorities: “We have mobilised resources, through our Task Force for Greece, like never before”.

Portugal flag ©
Review mission to Portugal emphasises need for structural reforms

Portugal’s EU/IMF-backed economic adjustment program has got off to a good start, but its success will depend on continued implementation of a wide range of structural reforms to remove the rigidities and bottlenecks behind the country’s decade-long growth stagnation. That was the conclusion reached by staff teams from the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) that visited Lisbon during 7-16 November for the second quarterly program review. Approval of the conclusion of this review would allow the disbursement of a further €8 billion in loans (€5.3 billion by the EU, €2.7 billion by the IMF). These disbursements could take place in December and January subject to approval from the IMF Executive Board, the EU’s ECOFIN Council and the Eurogroup. The joint mission for the next program review is expected to take place in February 2012.

Rubber Stamp Quality © iStockphoto
Stricter regulatory framework for rating agencies proposed

The regulatory framework for credit rating agencies (CRAs) should be further toughened up, the European Commission argued in putting forward proposals for new legislation on CRAs on 15 November. The Commission said that, despite the adoption of European legislation on rating agencies in 2009 and 2010, recent developments in the context of the euro-zone debt crisis had shown that the existing regulatory framework was insufficient. The draft legislation looks to reduce any over-reliance on ratings while improving the quality of the ratings process. The rules would apply to ratings of public entities within the EU but also outside the EU provided that the sovereign ratings were issued by a CRA registered in the EU. The proposals now pass to the European Parliament and the EU Council of Ministers.

Cover image © European Union, 2011

UK Economy: The Crisis in Perspective - Essays on the Drivers of Recent UK Economic Performance and Lessons for the Future

Billed as meeting the need for a radical new analysis of the UK economic system in the wake of the global financial crisis, this new book published in November by Routledge is an edited collection of papers presented to a European Commission seminar held in June 2010 to discuss prospects for the UK economy. The book is edited by Gabriele Giudice (Head of the Unit responsible for the UK, Estonia and Latvia in DG ECFIN), Robert Kuenzel (an Economist in DG ECFIN) and Thomas Springbett (UK country desk officer in DG ECFIN, responsible for forecasting and surveillance).

Agenda Calls
29-30 November
Eurogroup/ECOFIN meetings
30 November
Brussels, Workshop: Public finances in times of severe economic stress: the role of institutions
9 December
European Council
12-15 December
European Parliament Plenary
15 December
Workshop: The Dutch Current Account – the story behind the surplus
16-19 January 2012
European Parliament Plenary
23-24 January 2012
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
Call for proposals. Joint Harmonised European Union Programme of Business and Consumer Surveys. Deadline 19 December 2011
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Directorate-General for Economic and Financial Affairs