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Tenth review concludes Ireland’s adjustment programme on track
Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Dublin during 23 April-2 May for the tenth review of the government’s economic programme. Ireland’s programme remains on track, the gradual recovery is continuing and there have been further improvements in market conditions for the sovereign and for Irish banks. The authorities have made significant progress on financial sector repair and restoring sustainability to public finances. Economic growth is forecast at about 1% in 2013 and just over 2% in 2014. Conclusion of this review would make available a disbursement of EUR 1 billion by the IMF and EUR 1 billion by the European Financial Stability Facility (EFSF), with EU Member States expected to disburse a further EUR 0.5 billion through bilateral loans.
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| We are confident that Ireland will be able to graduate from its programme in the autumn.
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Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro.
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Council fully supports conclusions of in-depth reviews of macroeconomic imbalances in 13 Member States
At their meeting on 14 May, EU finance ministers agreed with the conclusions of in-depth reviews of 13 Member States that were finalised by the Commission in April. The in-depth reviews found that the 13 Member States are subject to macroeconomic imbalances varying in nature and magnitude, and underlined the need for policy action and structural reform. The in-depth reviews are part of the Macroeconomic Imbalance Procedure that was introduced to prevent and correct macroeconomic imbalances. The 13 Member States were identified in the Alert Mechanism Report of 28 November 2012 as warranting further economic analysis in order to determine whether macroeconomic imbalances exist or risk emerging. Imbalances in two Member States, Spain and Slovenia, were found to be excessive, and the Council has asked the Commission to consider, on the basis of further investigation, whether steps are needed under the Excessive Imbalances Procedure (EIP). The Commission will provide recommendations to Member States experiencing imbalances, in the context of the European semester.
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Commission outlines options for future of 1 and 2 euro cent coins
The European Commission has suggested four possible scenarios for the future issuance or withdrawal of 1 and 2 euro cent coins. In a Communication adopted on 14 May, the Commission responded to a request from the European Parliament and the Council of Ministers in 2012 to investigate the use of the 1 and 2 euro cent coins in terms of the cost-benefit of producing and issuing the coins and the attitude of the general public towards the coins. As possible options, the Commission has proposed to maintain the status quo, to continue to issue the coins but at a reduced cost, to quickly withdraw all coins from circulation, or to cease issuing the coins and let them gradually fade out of circulation. Under the latter two scenarios, binding rounding rules would apply.
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Eurogroup welcomes ESM disbursing first tranche of Cyprus financial assistance
The Eurogroup has welcomed the decision of the Board of Directors of the European Stability Mechanism (ESM) to approve the first tranche of EUR 3 billion in financial assistance for Cyprus. The financial assistance is based on the programme agreed between Cyprus and the euro area Member States on 25 March and on the Memorandum of Understanding (MoU) signed between Cyprus and the European Commission at the end of April. The first disbursement of EUR 2 billion under the first tranche was released on 13 May. The Eurogroup commended Cyprus for implementing all actions as agreed in the MoU and for completing the independent assessments of compliance with the anti-money laundering framework.
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Eurogroup gives green light for EFSF disbursement to Greece
At their meeting on 13 May, euro area finance ministers approved the staff level agreement between Greece and the Troika on the updated policy conditionality underlying Greece’s adjustment programme. The Eurogroup commended the Greek government for implementing the fiscal and structural reforms foreseen in the agreed policy conditionality, particularly measures to strengthen tax revenue collection. This approval by the Eurogroup clears the way for Member States to finalise the relevant national procedures required for the approval of the next instalment from the European Financial Stability Facility (EFSF). The EUR 7.5 billion disbursement will take place in two sub-tranches, one in May and one in June, with the latter contingent upon Greece’s continued compliance with agreed milestones.
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Barroso and Rehn host conference on deep and genuine EMU
On 7 May, Commission President José Manuel Barroso and Vice-President Olli Rehn hosted a high-level conference on a deep and genuine Economic and Monetary Union (EMU). The debate followed six months after publication of the Commission's Blueprint on EMU, which set out the Commission's vision for future integration in the financial, fiscal, economic and political fields. “We want to start and fuel a democratic debate on where the future of Europe should lie,” President Barroso told the conference. Vice-President Olli Rehn stressed that the EMU can only be ensured in the long-term provided that it is on a solid and sustainable foundation in the short-term. He noted that we now have a more robust and credible system to ensure sound public finances, and a framework for preventing and correcting macroeconomic imbalances. These provide a solid basis for the further steps necessary to rebuild the EMU.
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Green light to launch formal talks on EU budget for 2014-2020
An agreement reached at a meeting on 6 May between Commission President José Manuel Barroso, European Parliament President Martin Schulz and Taoiseach Enda Kenny for the Irish Presidency of the Council ended the current EU budget stalemate. The agreement paves the way to start political negotiations on the EU’s budget for 2014-2020 between the Council, the Parliament and the Commission, and on an amended budget for 2013. Negotiations on the Multiannual Financial Framework (MFF, the EU budget) started with a trilogue, or informal three-way discussion, between the three bodies on 13 May. Both negotiations on MFF and the draft, amended budget are expected to converge quickly – but nothing will be final until all points and both budgets have been agreed upon.
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Commission to make bank accounts cheaper, more transparent and accessible to all
The European Commission has proposed new rules that would make it easier to open a bank account in another Member State or to switch from one bank to another, as well as to compare the various fees charged by different banks. The new Directive, published on 8 May, also mandates access for all EU citizens to a basic payment account – irrespective of their financial situation. With the decreasing use of cash, having a bank account has become essential to participating fully in the economic and social life of a modern society, yet recent studies show that around 58 million consumers over the age of 15 in the EU do not have a payment account. Furthermore, research shows that consumers find it difficult to compare the offers and prices of different payment service providers, or to switch providers. There are also situations where EU consumers are still unable to open a payment account in a Member State where they are not resident.
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ECFIN engages with citizens at Europe Day commemoration
As every year, the Commission opened its Berlaymont building in Brussels to commemorate Europe Day. On 4 May, more than 10 000 visitors seized the chance to visit the Berlaymont building and get first-hand information on EU issues. This event commemorates 9 May 1950, the day when the French foreign minister Robert Schuman invited the countries of Europe to take part in a common political project. Europe Day is organised every year to celebrate European integration. This year, the event once again provided an opportunity for the Directorate-General for Economic and Financial Affairs (DG ECFIN) to engage with interested citizens. ECFIN staff were on hand to discuss and inform the public on topical issues, such as the EU response to the crisis, EU economic governance, Europe 2020 and the latest EU economic forecast. Posters, leaflets and booklets of general interest were distributed, and many visitors tested their knowledge on the EU and euro area countries, as well as on the key facts of the Economic and Monetary Union (EMU).
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Olli Rehn's blog: Reflections from Buckinghamshire
I am just back from the UK, where the Chancellor of the Exchequer, George Osborne, and Bank of England Governor, Sir Mervyn King, hosted a meeting of the G7 Finance Ministers and Central Bank Governors in the beautiful and historic setting of Hartwell House in Buckinghamshire. Growth and jobs were obviously at centre stage.
It was a meeting that took the G7 back to its roots as an informal forum for advanced economies to discuss common approaches to challenges facing the global economy. It was good to note that we share the analysis of the current economic situation.
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| Directorate-General for Economic and Financial Affairs |
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