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Eurogroup welcomes Troika conclusion that Portugal’s adjustment programme is on track
During an informal meeting on 14 September, the Eurogroup welcomed the conclusion of the Troika’s fifth review mission to Portugal. The joint mission by the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) visited Lisbon during 28 August-11 September and concluded that Portugal’s adjustment programme remains broadly on track. The euro area finance ministers noted that Portugal’s economic adjustment is taking place faster than expected through a rebalancing of the economy from predominantly domestic demand-led growth to export-led growth. They also noted that the Portuguese authorities have continued to rein in expenditure, but have experienced revenue shortfalls due to the lower tax-intensity of exports and increased demands on the social security budget. Portugal’s deficit is projected to fall below 3% of GDP in 2014, while the public debt-to-GDP ratio will peak below 124%, and decline steadily after 2014. The Eurogroup is expected to decide on the next disbursement and an updated Memorandum of Understanding by the time of its next meeting.
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In a very challenging external environment, Portugal has maintained its strong track record in implementing its economic adjustment programme. As a consequence, confidence in Portugal among its international partners and investors continues to grow.
Olli Rehn, European Commission Vice-President for Economic and Monetary Affairs and the Euro |
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Commission issues official report on Ireland’s compliance with economic adjustment programme
The European Commission has published the official report describing the main findings of the seventh review mission by the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) to Ireland that took place from 3-12 July. As previously reported, the mission concluded that Ireland’s policy implementation remains on track despite challenging macroeconomic conditions. The report includes an assessment of compliance with programme conditionality, and an overview of challenges faced by Ireland in the period ahead. Ireland’s general government deficit for 2012 is expected to remainwithin the programme ceiling (8.6% of GDP), and economic activity continues to evolve in line with expectations. Downside risks have increased however, primarily due to weaker prospects for growth in Ireland's main trading partners, and unemployment remains high (at 14.8%) and increasingly long-term in nature.
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Confidence in economy decreases in September
In September, confidence in the economy was broadly down across most of the EU and the euro area. The Economic Sentiment Indicator (ESI) decreased by 0.9 points in the EU, to 86.1, and by 1.1 points in the euro area, to 85.0. In both areas, the decrease was due mainly to weaker confidence among services and retail trade managers, and consumers. While confidence in industry decreased in the euro area as well, it remained broadly stable in the EU. On the positive side, construction managers in both areas were less pessimistic than in August. The Business Climate Indicator (BCI) for the euro area also decreased, by 0.16 points to -1.34. The decline was driven by a more negative assessment of production expectations, order books (overall and export) and past production. Managers’ assessment of the adequacy of their stocks of finished products was slightly more positive.
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Eurostat role reinforced to ensure high quality statistics
The European Commission adopted on 17 September a decision clarifying and reinforcing the role and responsibilities of Eurostat, the EU statistical office. The Decision underlines the independence of the head of Eurostat who, as Chief Statistician, will act autonomously to decide on how, when and what European statistics are produced, and ensure that these statistics are developed and disseminated in line with a Code of Practice. Improved coordination, including closer cooperation between Eurostat and other Commission services, will also enhance the quality and reliability of European statistics, as will the labelling of European statistics to distinguish them from other statistics. The Decision reflects the need to strengthen the governance of European statistics, particularly given the central role that Eurostat now plays in European economic governance.
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G20 Finance Deputies discuss current state of the global economy
Director-General Marco Buti participated in a meeting of G20 Finance deputies held in Mexico City on 23-24 September. Discussions focused on an assessment of the global economy, and on topics such as the international financial architecture, financial regulation, and energy and commodities. In a frank exchange of views with their international partners, euro area leaders affirmed that they are delivering on their commitment to do whatever it takes to safeguard the integrity and stability of the area, while highlighting that euro area developments are not the only source of risk to the global recovery. The next and last G20 Finance Ministerial meeting under the Mexican G20 presidency will take place on 4-5 November.
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Barroso responds to citizens’ questions during live discussion
European Commission President José Manuel Barroso responded to citizens’ questions during a special live edition of the Euronews programme iTalk held on 20 September. Barroso defended the progress made over the past year and answered questions about youth unemployment, growth, European bank supervision, Greece, a European rating agency, the EU budget, democracy and the future of further integration. On youth unemployment, President Barroso described several of the concrete measures the EU has taken and asserted that sustainable employment could only come from sustainable growth and a solution to the euro area crisis. He also underscored the importance of Europe. Barroso said: “…in the 21st century, if we don’t create and reinforce something bigger, that is the European Union through a federation, our countries, alone…will simply not be able, for instance, to deal with the financial sector, because the financial sector is transnational.”
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Euro exhibition opens in Łódź, Poland
After a number of stops in ten EU countries, the European Commission's travelling euro exhibition has now arrived in Łódź, Poland. Opened on 24 September by Marek Belka, President of the National Bank of Poland, and Declan Costello, European Commission / DG Economic and Financial Affairs, it takes visitors on the road to the euro around two exhibition areas. After presenting EU countries and the main historic steps which led to the adoption of the euro, it focuses on the Economic and Monetary Union and also addresses topical issues, such as the EU response to the sovereign debt crisis and the new EU economic governance framework. The exhibition will stay in Lodz until 14 December and in early 2012 will travel to Krakow.
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Labour market developments. European Economy 4/2012
This publication chronicles European labour market developments in recent years. The overall unemployment rate in the EU is currently heading towards nearly 10.5%, while that in the euro area is about 11%, the highest rate since the start of EMU. Moreover, the dispersion of unemployment rates within the euro area has been growing since 2008 and has reached unprecedented levels. Evidence suggests that in many EU countries unemployment is becoming structural. On a more positive note, since the start of the crisis many EU countries have proactively implemented labour market reforms, broadly in line with recommendations put forward at the EU level. The report includes analyses of the past decade of labour market reforms in the EU, as well as the macroeconomic implications of Employment Protection Legislation.
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| Directorate-General for Economic and Financial Affairs |
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