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Commission draft budget for 2013 to stimulate growth and jobs while holding the line on expenditure
On 25 April, the European Commission adopted the draft EU budget for the year 2013. It will be the last annual budget of the present Multiannual Financial Framework 2007-2013. In view of the current economic situation, the Commission’s budget is geared towards funding measures that stimulate growth and jobs in line with the Europe 2020 strategy. Meeting with Martin Schulz, President of the European Parliament, Commission President Barroso said: “This is a budget that supports growth and jobs while recognising the pressure on national budgets. It shows responsibility because it freezes future expenditure at the level of inflation. It moves the investment to areas that can best help to create growth and jobs. Finally it also limits increase of administrative expenditure to 1.2%, well below inflation (also through cutting Commission staff levels).” The proposal will be discussed by the Council and the European Parliament and approved by them before 31 December 2012 according to the special legislative procedure set by the Treaty.
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The draft budget for 2013 adopted [on 25th April] is a budget of responsibility and solidarity.
José Manuel Barroso, President of the European Commission
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Sixth review mission to Ireland concludes economic programme on track
Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Dublin during 17-26 April for the regular quarterly review of the government’s economic programme. The mission concluded that Ireland’s policy implementation remains on track, although considerable challenges remain. Fiscal targets for 2011 were met within a healthy margin and consolidation remained on track in the first quarter of 2012. Ireland is expected to achieve its 2012 deficit ceiling of 8.6% of GDP. Moreover, work to restore the health of the financial system is continuing through strategies for dealing with mortgage and SME loan arrears, personal insolvency reform and the re-structuring of Permanent Trustee Savings Bank (TSB). Economic growth is expected to remain modest in 2012, at around ½%, however, while the benefits of continued competitiveness gains are limited by relatively low growth among Ireland’s trading partners. Approval of the conclusion of this review will make available a disbursement of EUR 1.4 billion by the IMF and EUR 2.3 billion by the EU.
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More resilient financial sector now focusing on longer-term growth, Commission report finds
Resilience in the financial sector has improved in the aftermath of the financial crisis, and action is now focusing on longer-term growth goals, although vulnerabilities remain, according to an annual European Commission report on financial integration and stability. The European Financial Stability and Integration Report (EFSIR) was presented at a joint conference with the European Central Bank (ECB) in Frankfurt on 26 April. The event brought together policymakers, financial market leaders and academics for discussions on financial stability and integration in Europe
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G20 Finance Ministers reach historic agreement to increase IMF resources by over USD 430 billion
Vice-President Rehn participated in the IMF Spring Meeting and the G7, G20, and Deauville Partnership meetings held in Washington on 19-21 April. In the discussions on the global economy, once again much attention was devoted to Europe, and G20 Ministers expected the continuation of a modest global recovery in 2012. The agreement to increase IMF resources by over USD 430 billion was a great success and a strong signal of unity among the international community. EU Member States will contribute EUR 180 billion. The active role of the Commission and the earlier increase in the euro area firewall were helpful in achieving the agreement.
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Finance ministers examine draft proposals to transpose Basel III capital requirements into EU law
On 2 May, EU finance ministers examined proposals to amend the EU's rules on capital requirements for banks and investment firms, the so-called “CRD 4” package, with a view to starting a negotiation with the European Parliament aimed at adoption of the texts at first reading. The proposals, a regulation establishing prudential requirements that institutions need to respect and a directive governing access to deposit-taking activities, would amend and replace the existing capital requirement directives (CRD). They are aimed at transposing the Basel III international agreement into EU law. Basel III is the third configuration of standards as the outcome of a review by the Basel Committee on Banking Supervision (BCBS) on minimum standards on bank capital adequacy. The package is likely to be confirmed by the Council at its next meeting on 15 May.
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Eurostat reports decrease in government deficits in euro area and EU in 2011, increase in debts
First notification Eurostat data released on 23 April shows that the government deficits of both the euro area and EU decreased in absolute terms in 2011 compared with 2010, while debt increased in both areas over the same time period. In the euro area the government deficit to GDP ratio decreased from 6.2% in 2010 to 4.1% in 2011, and in the EU from 6.5% to 4.5%. In the euro area the government debt to GDP ratio increased from 85.3% at the end of 2010 to 87.2% at the end of 2011, and in the EU from 80.0% to 82.5%.
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Business and Consumer Surveys – Economic Sentiment Indicator, April 2012
Economic sentiment was flat in the EU and down in the euro area in April.The Economic Sentiment Indicator (ESI) remained stable in the EU at 93.2. In the euro area it decreased significantly by 1.7 points (to 92.8), thereby offsetting the gains recorded over the first quarter of 2012. In both the EU and euro area, the ESI remains well below its long-term average.The ESI is a leading indicator compiled by ECFIN on a monthly basis as part of its Business and Consumer Surveys. It uses ‘soft data’ to reflect the sentiment – optimistic, pessimistic or neutral – of managers and consumers.
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Directorate-General for Economic and Financial Affairs
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