|
|
|
|
|
|
 |
|
 |
|
Euro area finance ministers commend Ireland for its successful completion of adjustment programme; endorse 12th and final review report
Euro area finance ministers endorsed the twelfth and final review of the Irish adjustment programme on 9 December. The endorsement was based on the Commission’s draft compliance report, which was released in November. On 14 November, Vice President Rehn had expressed the Commission's support for the Irish government decision to exit the adjustment programme in December as planned and without a pre-arranged precautionary credit facility. The Eurogroup commended the Irish authorities for their steadfast implementation of the programme and noted that the imminent completion of the Irish programme is proof that the EU’s strategy for responding to the crisis is now delivering results. Final disbursements to Ireland by the European Financial Stability Facility (EFSF), the European Financial Stabilisation Mechanism (EFSM) and the International Monetary Fund (IMF) are ongoing.
|
|
|
 |
|
|
|
 |
|
|
|
|
 |
 |
| The successful conclusion of the Irish programme is a strong signal that our common response to the crisis is delivering results. |
 |
Olli Rehn, Commission Vice-President responsible for Economic and Monetary Affairs and the Euro
|
|
|
|
|
|
 |
|
EU finance ministers reach preliminary agreement on outlines of Single Resolution Mechanism for banks
At their meetings on 10 December, EU finance ministers reached a preliminary agreement on the outlines of the mechanism for restructuring or unwinding ailing banks. Based on the Commission proposal of 10 July, the new mechanism, the Single Resolution Mechanism (SRM), would establish an integrated European resolution system for all countries participating in the Banking Union, thus enabling the smooth and speedy restructuring of failing banks when necessary. The SRM would include a single resolution board and a single resolution fund so that the EU can tackle future bank crises efficiently with minimal costs to taxpayers and the economy. The Council Regulation establishing the Single Supervisory Mechanism (SSM), the first leg of the Banking Union, which fully entrusts the European Central Bank (ECB) with the direct supervision of banks in the euro area, was adopted and published in October of this year. An extraordinary ECOFIN meeting will take place during the week of 16 December to finalise the Council’s general approach on the SRM.
|
 |
|
|
|
|
|
|
 |
|
Excessive Deficit Procedure: Council finds insufficient action taken by Poland, issues new recommendation; Commission recommends EDP for Croatia
In a decision adopted on 10 December, EU finance ministers on the basis of a Commission recommendation concluded that Poland has failed to comply with the June 2013 recommendation on measures to bring its government deficit back below the EU’s reference value of 3% of GDP. The Council issued a new recommendation to Poland that action be taken to correct its deficit, and extended the deadline for correction by one year, to 2015. Poland has been subject to an excessive deficit procedure since July 2009, when the Council called for its deficit to be corrected by 2012. In related news, the Commission recommended that an Excessive Deficit Procedure (EDP) be opened for Croatia, as the country has fulfilled neither the deficit nor the debt criteria of the EU Treaty. Croatia's general government deficit reached 5% of GDP in 2012, and total government debt amounted to 55.5% of GDP. The Commission issued a Recommendation to the Council proposing an adjustment path and budgetary targets that would enable Croatia to bring its deficit and debt back into line with the requirements of the EU Treaty by 2016. EU Finance Ministers are likely to discuss the Commission’s Recommendations at their meeting on 28 January 2014, and to issue a Council Recommendation.
|
|
|
|
|
|
|
|
 |
|
No international financial assistance required for Slovenian banking sector
Vice-President Rehn welcomed publication on 12 December of the independent assessment of the health and resilience of the Slovenian banking sector. The assessment, carried out by four leading external consultants within the timeframe specified by the Council and using a credible methodology, has delivered reliable results, said Rehn. According to the independent assessment, Slovenia has the resources to proceed with the repair of its financial sector without turning to the EU or other external partners for financial assistance. Slovenia's banks need EUR 4.76 billion to repair their balance sheets. Rehn said he looked forward to the effective implementation by the Slovenian authorities of their strategy for banking sector repair and modernisation. He added that it is also critical that Slovenia moves forward with the broader economic reform agenda, in particular strengthening corporate governance and carrying out privatisations and regulatory reforms to improve the business environment.
|
|
|
|
|
|
|
|
 |
|
13th Report on practical preparations for the euro: final countdown for Latvia
With only one month to go before Latvia’s €-day on 1 January 2014 makes it the 18th member of the euro area, the Commission has adopted the thirteenth report on the practical preparations for the euro. The report released on 3 December concludes that Latvia's preparations for the changeover are overall well advanced, while recommending further efforts in some areas during the final phase of the changeover. A staff working document attached to the report looks at the state of preparations in the other Member States that have not yet adopted the euro. The Commission closely monitors opinion polls commissioned by the Latvian Ministry of Finance, whose latest available results from October show that the level of public awareness on issues concerning the changeover to the euro continues to increase. 72% of respondents consider themselves to be well-informed. However, unwarranted price increases remain a serious concern for a large proportion of the Latvian population (83%).
|
|
|
|
|
|
|
|
 |
|
Commission staff conclude fourth Post-Programme Surveillance mission to Hungary
European Commission officials conducted the fourth mission to Hungary from 4 to 10 December 2013 for post-programme surveillance linked to EU balance of payments assistance. The assistance was provided to Hungary between 2008 and 2010. The mission welcomed the recent improvements in the macroeconomic situation. Alongside net exports, domestic demand has also started to contribute to the recovery, and economic growth is expected to pick up. Nonetheless, important vulnerabilities remain, such as high private and public debt levels, high financing costs, and low growth potential. Furthermore, while the Hungarian government has broadly maintained fiscal discipline, there is no margin for slippages in the 2014 budget. The mission concluded that to strengthen medium-term growth prospects and put the public debt-to-GDP ratio on a firm downward path, Hungary needs to implement structural reforms, notably in the financial sector, labour and product markets, in line with recommendations made on 9 November in the context of the European Semester.
|
|
|
|
|
|
|
|
 |
|
ECFIN Conference explores link between current account imbalances and financial flows
On 6-7 December, renowned academics from both sides of the Atlantic participated in a conference on current account imbalances and international financial integration that was hosted by DG ECFIN. The crisis has highlighted the importance of current account balances and their spillover effects across countries. While research on the trade aspects of such spillover effects has contributed greatly to their understanding, the financing aspects have only recently emerged as a matter for spirited academic debate. The conference highlighted the latest advances in understanding how financial flows matter in linking trade deficits and surpluses across the globe. Authors and other participants from major research and policy institutions discussed the latest findings and their implications for addressing current account balances in the future.
|
|
|
|
|
|
|
|
 |
|
Economic sentiment improves in the euro area and the EU
In November the Economic Sentiment Indicator (ESI) increased by 0.8 points in the euro area (to 98.5) and by 0.4 points in the EU (to 102.1). While the upward trend observed since May has been preserved, the improvement in confidence has noticeably decelerated over the past two months, mirroring differences in developments across sectors. In the euro area, the ESI's increase was driven by improved confidence in services and industry. Confidence weakened among consumers and in construction and remained broadly unchanged in retail trade.
|
|
|
|
|
|
|
|
 |
|
Commission meets with Greek government ahead of Greek EU presidency
On 4 December, European Commission President Barroso met with Greek Prime Minister Samaras and several members of the Greek government. The main purpose of the meeting was to discuss Greece’s Presidency of the EU Council, which begins on 1 January 2014. Barroso said that the Commission’s and Greece’s priorities are “largely in step” and he stressed that this is a crucial time as the EU seeks to finalise key pieces of legislation before the European elections in May 2014. According to Barroso the EU’s top priority is to firm up the recovery, with a particular focus on combatting youth unemployment and improving access to finance for companies. He also urged Member States to take advantage of the EU’s new seven-year budget, and called for completion of the Banking Union and further deepening of the Economic and Monetary Union (EMU). Barroso held a separate meeting with Prime Minister Samaras, Vice-Prime Minister Venizelos, Minister Stournaras and Commission Vice-President Olli Rehn to discuss developments in the Greek economy and the financial assistance programme.
|
|
|
|
|
|
|
|
 |
|
Euro area November inflation: flash estimate up to 0.9%
Euro area annual inflation is expected to be 0.9% in November 2013, up from 0.7% in October, according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in November (1.6%, compared with 1.9% in October), followed by services (1.5%, compared with 1.2% in October), non-energy industrial goods (0.3%, stable compared with October) and energy (-1.1%, compared with -1.7% in October).
|
|
|
|
|
|
|
|
 |
|
Commission fines banks EUR 1.71 billion for participating in cartels in the interest rate derivatives industry
The European Commission has fined eight international financial institutions a total of EUR 1,71 billion for participating in illegal cartels in markets for financial derivatives covering the European Economic Area (EEA). Four of these institutions - Barclays, Deutsche Bank, The Royal Bank of Scotland (RBS) and Société Générale – participated in a cartel relating to interest rate derivatives denominated in euro. Six of them - UBS, RBS, Deutsche Bank, Citigroup, JPMorgan and the broker RP Martin – participated in one or more bilateral cartels relating to interest rate derivatives denominated in Japanese yen. Such collusion between competitors is prohibited by Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement. Both decisions were adopted under the Commission's cartel settlement procedure; the companies’ fines were reduced by 10% for agreeing to settle.
|
|
|
|
|
|
|
|
 |
|
Euro exhibition opens in Liepāja, Latvia
After a two successful stops in Riga and Daugavpils, the European Commission's travelling euro exhibition has arrived in Liepāja (Latvia). It aims to inform Latvians about their new currency and support Latvia's preparations for the changeover to the euro on 1 January 2014. The exhibition opened on 2 December with a ceremony attended by Ms Inna Steinbuka, Head of the Commission Representation in Latvia, Ms Arina Andreičika, Head of the Euro Office of the Latvian Ministry of Finance and by Mr Uldis Sesks, Mayor of Liepāja. The exhibition takes visitors on the road to the euro around two main exhibition areas. After presenting EU countries and the main steps that led to the adoption of the euro, it focuses on the Economic and Monetary Union, and addresses topical issues such as the EU response to the sovereign debt crisis and the new EU economic governance framework. A dedicated exhibition area provides information specifically for children. The exhibition will stay in Liepāja until 12 January. The pedagogical material developed for this exhibition will then be freely available for schools and other institutions at the Latvian Ministry of finance in Riga. If interested, do not hesitate to contact Ms Andreičika.
|
|
|
|
|
|
|
|
|
|
 |
|
Progress towards meeting the economic criteria for EU accession: the EU Commission's 2013 assessments. European Economy. Occasional Papers 166
In this Occasional Paper, ECFIN brings together into a single document the economic chapters of the European Commission’s 2013 Progress Reports for candidate countries and potential candidate countries for EU accession. The Commission prepared Progress Reports for the candidate countries from the former Yugoslav Republic, Macedonia, Iceland, Montenegro and Serbia, as well as Turkey, and for the potential candidate countries Albania, Bosnia and Herzegovina, and Kosovo. The Commission adopted the Progress Reports on 16 October 2013. The paper represents only a part of the overall progress made by the candidate countries and the potential candidate countries towards meeting the accession criteria. An assessment of the progress made on all criteria can be found in the 2013 Progress Reports.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Directorate-General for Economic and Financial Affairs |
|
|
