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Commission Convergence Report concludes Latvia ready to adopt euro on 1 January 2014
The European Commission has proposed to the Council that Latvia adopt the euro on 1 January 2014. The assessment was published in the Convergence Report on Latvia released on 5 June. The report concludes that Latvia has achieved a high degree of sustainable convergence with the euro area. EU finance ministers are expected to take the formal decision on 9 July. The conditions for euro adoption consist of four stability-oriented economic criteria regarding the government budgetary position, price stability, exchange rate stability and the convergence of long-term interest rates. Moreover, the Member State’s national legislation on monetary affairs must be in line with the EU Treaty. Additional factors taken into account in the assessment include the Member State’s balance of payments, market integration, and other indications that the integration of the Member State into the euro area will proceed smoothly.
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| Latvia’s experience shows that a country can successfully overcome macroeconomic imbalances, however severe, and emerge stronger…Latvia is forecast to be the fastest-growing economy in the EU this year. |
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Olli Rehn, Commission Vice-President responsible for Economic and Monetary Affairs and the Euro
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Third review mission concludes Spain’s financial assistance programme on track
A delegation from the European Commission, in liaison with the European Central Bank (ECB), the European Stability Mechanism (ESM) and the European Banking Authority (EBA), carried out the third review of the financial sector assistance programme for Spain from 21-31 May. The International Monetary Fund (IMF) also monitored the review as an independent observer. The mission concluded that the programme remains on track. Spanish financial markets have further stabilised since the last review, and improved liquidity has allowed Spanish banks to further regain access to funding markets and to reduce their reliance on central bank financing. In addition, the solvency of Spanish banks has been bolstered with the recapitalisation of parts of the banking sector and the transfer of assets to SAREB (the Spanish asset management company). The next review is scheduled for September 2013.
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G20 Finance ministers' and Central Bank Governors' Deputies discuss policy mix for global economic growth
Marco Buti, ECFIN Director-General, participated in the G20 Finance and Central Bank Deputies’ Meeting held in St. Petersburg on 6-7 June. The purpose of the meeting was to prepare the G20 summit that will take place in September. Deputies discussed the global economic situation. There was broad agreement that global economic growth has softened, and deputies discussed the appropriate policy mix required to sustain global growth, including the fiscal stance across advanced G20 economies. Deputies also discussed further progress in the area of financial regulatory reform, where there is a need to monitor the implementation of agreed reforms to ensure a level playing field globally. There was also a discussion on tax avoidance, evasion and havens, and on the issue of tax base erosion and profit shifting by multinational companies, in particular.
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Commission President Barroso and Spanish Prime Minister Rajoy advocate action to bolster employment
Commission President José Manuel Barroso welcomed Spanish Prime Minister Mariano Rajoy together with the Ministers of his government in Brussels on 5 June. The two leaders held in depth discussions on the challenges facing Europe, and how Spain and the Commission can work together to overcome the economic crisis. President Barroso recognised the important steps taken by the Spanish government to achieve a sustainable economic recovery and to reduce the unacceptable level of unemployment. To tackle big challenges like unemployment, particularly youth unemployment, he stressed that, in addition to structural reforms, short-term actions – such as a Youth Guarantee – are also needed. Barroso called for the urgent conclusion of negotiations on the future EU budget so that initiatives like the Youth Employment Initiative can be implemented.
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Euro exhibition opens in Katowice
After a number of stops in ten EU countries and its last stops in Łódź and Krakow, Poland, the European Commission's travelling euro exhibition has arrived in Katowice, Poland. The exhibition was opened on 10 June by Eugeniusz Gatnar, Board of the National Bank of Poland (NBP) and Natalia Szczucka, Head of the European Commission Representation in Poland. The exhibition 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 Katowice until 12 July and will then travel to Olsztyn, Poland.
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April 2013 unemployment rates at 12.2% and 11.0% in euro area and EU
The euro area seasonally-adjusted unemployment rate was 12.2% in April 2013, up from 12.1% in March, while the EU unemployment rate was 11.0%, unchanged compared with the previous month. In both areas, rates have risen markedly compared with April 2012, when they were 11.2% and 10.3% respectively. The figures were published on 31 May by Eurostat, the statistical office of the European Union. The lowest unemployment rates were recorded in Austria (4.9%), Germany (5.4%) and Luxembourg (5.6%), and the highest in Greece (27.0% in February 2013), Spain (26.8%) and Portugal (17.8%). Compared with a year ago, the unemployment rate increased in eighteen Member States and fell in nine.
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Fighting tax evasion: Commission proposes wider scope for automatic exchange of information within the EU
The European Commission has proposed extending the automatic exchange of information between EU tax administrations, as part of the intensified fight against tax evasion. Under the proposed revision to the Administrative Cooperation Directive announced on 12 June, dividends, capital gains, and all other forms of financial income and account balances, would be added to the list of categories that are subject to automatic information exchange within the EU. This would pave the way for the EU to have the most comprehensive system of automatic information exchange in the world. The proposal, together with existing legislation will mean that Member States share as much information amongst themselves as they have committed to doing with the USA under the Foreign Account Tax Compliance Act (FATCA).
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Policy-related uncertainty and the euro-zone labour market. Economic Briefs 24. June 2013
This economic brief examines the role of policy uncertainty in explaining the persistently high unemployment rate in the euro area after the Great Recession, as well as the impact of uncertainty on flows into and out of unemployment. The analysis shows that changes in economic policy uncertainty influence the unemployment rate both directly and indirectly, via economic activity. Policy uncertainty primarily impacts the process of job creation: employers become more reluctant to hire as the policy environment becomes more uncertain. The analysis corroborates and helps qualify analogous evidence available for the US.
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| Directorate-General for Economic and Financial Affairs |
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