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Euro area

The 'euro area' is the official term for the group of EU Member States that have adopted the euro as their currency.

Euro-area Member States share the common currency and the single monetary policy conducted by the European Central Bank.

Economic convergence ensures that the euro-area economy functions smoothly and that the Member State entering it can grow and prosper in it.

Economic situation

The Commission publishes macroeconomic forecasts for the EU and the Member States three times a year, in the spring (May), in the autumn (November) and in the winter (February). These forecasts are produced by the Directorate-General for Economic and Financial Affairs (DG ECFIN).

Fiscal surveillance

Assessments of stability programmes

As required by the Stability and Growth Pact, each spring EU member states submit updates of their medium-term fiscal strategies.

Euro area Member States submit stability programmes while countries outside the euro area submit convergence programmes.

Based on an assessment by the Commission prepared by DG ECFIN, the Council adopts an opinion on the euro area programmes and country-specific recommendations in the scope of the European Semester.

The EU Excessive Deficit Procedure

The corrective arm of the Stability and Growth Pact (SGP) ensures that Member States adopt appropriate policy responses to correct excessive deficits by implementing the Excessive Deficit Procedure (EDP).

Draft budgetary plans

As required by the Two Pack, euro area Member States submit draft budgetary plans to the Commission by October 15 every year, prior to the adoption of the budget.

Macroeconomic surveillance

Macroeconomic Imbalance Procedure

The Macroeconomic Imbalance Procedure (MIP) is a surveillance mechanism that aims to identify potential risks early on, prevent the emergence of harmful macroeconomic imbalances and correct the imbalances that are already in place.

The annual starting point of the MIP is the Alert Mechanism Report: Based on a scoreboard of indicators and economic judgment, it is a filter to identify countries and issues for which a closer analysis (in-depth review) is deemed necessary. The outcome of these in-depth reviews forms the basis for further steps under the MIP.