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EU and Six Pack - Olli Rehn © European Union 2011 EU economic governance rules enter into force
- Romania’s precautionary balance-of-payments assistance programme on track
- Second review mission: Portugal in compliance with its economic adjustment programme
- Staff assessment concludes progress made on fiscal, economic and structural reforms in Ireland
- EU bond issue receives prestigious international award
- G20 Deputies kick off Mexican Presidency
- President Barroso praises Polish EU Presidency
- Agreement by Council and Parliament on setting deadline for migration to a Single Euro Payments Area
   
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EU and Six Pack - Olli Rehn © European Union 2011 EU economic governance rules enter into force

A major milestone in Europe's economic governance and crisis response was reached on 13 December. On that day, the legislative package to reinforce the EU’s rules of economic governance, the so-called “six-pack”, entered into force. Vice President Olli Rehn said the new economic governance package would “radically change the economic and fiscal surveillance of all 27 Member States”, and he vowed to “fully use this powerful set of tools from Day One”. In line with agreements from the European Summit of 8-9 December, the legislative package represents another concrete and decisive step towards ensuring fiscal discipline, helping to stabilise the EU economy and preventing a new crisis in the EU.

Viewpoint
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These new rules represent the most comprehensive reinforcement of economic governance in the EU since the launch of the Economic and Monetary Union.

Olli Rehn, European Commission Vice-President and Commissioner for Economic and Monetary Affairs and the Euro
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Romania and balance of payment © Istockphoto
Romania’s precautionary balance-of-payments assistance programme on track

An ECFIN staff assessment published on 22 December has concluded that Romania remains on track in implementing the policies agreed under the joint EU/IMF financial assistance programme. The assessment is based on a review mission carried out in Bucharest from 25 October to 7 November 2011. After two years of negative growth, real GDP is expected to grow in 2011 by around 1½-2%, above previous projections, and accelerate to 1¾-2¼% in 2012. Public finances are on track to achieve the 4.4% of GDP deficit target in 2011. For 2012, the Romanian authorities forecast growth of 2.1% and a deficit of 1.9% of GDP. This should make it possible to comply with the below 3% deficit target for 2012 by a comfortable margin. The mission for the next programme review is scheduled for late January or early February 2012.

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Portugal and economic adjustment © Istockphoto
Second review mission: Portugal in compliance with its economic adjustment programme

A report released on 21 December concludes that Portugal is in compliance with the terms and conditions of its economic adjustment programme. A joint Commission/ECB/IMF mission met with the Portuguese authorities in Lisbon from 7 November to 16 November 2011 to assess Portuguese compliance and update conditionality for the next reviews. According to the review, programme projections continue to be valid and financing is sufficient to meet the needs of the Portuguese government over the programme period. Portugal is supported by loans from the European Union amounting to EUR 52 billion and a EUR 26 billion Extended Fund Facility with the IMF.

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Ireland and IMF © Thinkstock.com
Staff assessment concludes progress made on fiscal, economic and structural reforms in Ireland

On 14 December, the European Commission published its staff assessment following the fourth review of the EU and IMF-supported financial assistance programme for Ireland.
The review was carried out in Dublin from 11 to 20 October 2011. The report concludes that important progress has been made in the areas of fiscal consolidation, strengthening of the domestic financial sector and growth-enhancing structural reforms, as requested by the Council of Ministers. Fiscal performance has been on target and the budget deficit for 2011 as a whole is now projected to be well below the 10.6% of GDP ceiling, as required in the programme. This paves the way for disbursement of the third instalment of EUR 4.2 billion in European funding to Ireland in January 2012.

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EU bond © Thinkstock.com
EU bond issue receives prestigious international award

The European Union's EUR 4 billion bond with a 15 year maturity (3% coupon) issued
on 22 September 2011, has received the prestigious IFR Award 2011 as best bond in the category supranational / sovereign / agency /regional bonds. The International Financing Review (IFR) praised the operation, which took place in volatile market conditions, as a "notable achievement and a vote of confidence in the EU" and highlighted the strong demand from investors for this long-term bond. In 2011, the EU raised EUR 29.2 billion with seven benchmark bonds, using the proceeds for loans to Ireland, Portugal and Romania as part of the EU assistance packages.


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G20 and Mexican Presidency © Thinkstock.com
G20 Deputies kick off Mexican Presidency

Mexico has kicked off its G20 Presidency with a seminar by G20 Deputies on the current challenges for global economic growth. During the seminar, which took place on 13 December in Mexico City, the crisis in Europe took centre stage. The IMF emphasized that the world faces a very important collapse of confidence. The Commission explained the decisions taken at the euro area summit on 9 December, which were acknowledged by G20 Deputies as an important contribution to strengthening the global economic recovery. G20 Deputies also discussed how to ensure that the International Monetary Fund has adequate resources at its disposal. The Commission emphasized the urgency of the discussion in the G20, which needs to reach a conclusion by February 2012. A sizable increase of Fund resources was deemed necessary to increase the IMF’s global crisis resolution capacity.


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President of the EC, Mr. Barroso and Polish Prime Minister , Mr. Tusk  © European Union 2011
President Barroso praises Polish EU Presidency

Addressing the European Parliament on 14 December, José Manuel Barroso, President of the European Commission, said that “Poland has shown that probably the best way to defend
the national interest is indeed to be Pro-European in the 21st century in Europe.” He went on to laud Poland for “putting itself at the service of deeper European integration, a stable economy and also a stronger euro – its future currency.” Barroso noted that the fact that Poland is not yet in the euro was not at all an obstacle, and that “Poland has shown its commitment to the currency of the European Union, to the Euro and at the same time working for the integrity of the European Union, of the Single Market and of all the ‘acquis communautaire’”.


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SEPA © Maya Kovacheva Photography/Istockphoto
Agreement by Council and Parliament on setting deadline for migration to a Single Euro Payments Area

The European Parliament and the Council have reached an agreement on setting an EU-wide end-date of February 2014 for full migration to a Single Euro Payments Area (SEPA). National instruments for credit transfers and direct debits will be phased out and replaced by recently created pan-European payment instruments by 1 February 2014 at the latest. Once SEPA credit transfers and direct debits across the euro area are fully introduced, cross-border payments will be as easy to arrange as domestic payments within one country are today. The changeover to SEPA will strengthen the position of consumers when they make payments and enable European citizens to make credit transfers and direct debits throughout the 32 SEPA countries. Businesses operating throughout Europe will benefit from a wider choice of payment service providers, faster and more efficient processes as well as greater transparency.

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Publications
Quarterly report on the euro area

Quarterly report on the euro area

The December 2011 edition of the Quarterly Report presents new empirical insights into the drivers of total factor productivity (TFP) growth. It shows that a significant part of the deceleration of trend TFP in euro-area Member States can be explained by changes in the skill composition of the labour force as well as trends in domestic and foreign knowledge capital stocks. In addition, special topics in this issue include an analysis of the impact of the crisis on household savings in the euro area and an examination of this year’s elevated consumer price inflation and volatility. A final topic examines how typically fast-growing emerging market economies will be affected by the slowdown in advanced economies.



 
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Agenda Calls
16-19 January 2012
Strasbourg
European Parliament Plenary
20-21 January 2012
Mexico City
G20 Deputies meeting
23-24 January 2012
Brussels
Eurogroup/ECOFIN meetings
25-29 January 2012
Davos-Klosters, Switzerland
World Economic Forum annual meeting 2012
9 February 2012
Abu Dhabi
G8 Deputies' meeting on economic track of the Deauville partnership
13-16 February 2012
Strasbourg
European Parliament Plenary
16-18 February 2012
Mexico City
G20 Deputies', Ministers and Central Bank Governors meetings
20-21 February 2012
Brussels
Eurogroup/ECOFIN meetings
1-2 March 2012
Brussels
European Council
12-15 March 2012
Strasbourg
European Parliament Plenary
29 March 2012
Brussels
Eurogroup/ECOFIN meetings
30-31 March 2012
Brussels
Informal ECOFIN meetings
20-22 April 2012
Washington
IMF/World Bank Spring meetings
20-22 April 2012
Washington D.C.
G20 Deputies', Ministers', and Central Banks Governors' meetings
 
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