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Ministers agree on financial support for Ireland
European finance ministers gave the formal go-ahead to a multi-billion euro EU-IMF financial assistance package for Ireland at the 6/7 December Eurogroup/ECOFIN Council in Brussels. Following the initial agreement at an extraordinary meeting on 28 November, ministers adopted the relevant legislative acts and set out the conditions for the loans to Ireland. The loans will be provided on the basis of a programme negotiated with the Irish authorities by the European Commission and the International Monetary Fund, in liaison with the European Central Bank. The three-pillar programme foresees an overhaul of the Irish banking system; restoration of fiscal sustainability, including correction of the country’s excessive deficit by 2015; and growth-enhancing structural reforms. European assistance (including bilateral loans) amounts to €45bn of the €85bn package.
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Together with the IMF, the ECB and the Irish authorities, we have agreed on a comprehensive programme to maintain the viability of the Irish economy and its banking sector and to safeguard the euro area. This is a determined and coordinated action to support Ireland and the Irish people.
Olli Rehn, Commissioner for Economic and Monetary Affairs |
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Economic forecast: EU recovery taking hold but progress uneven
The economic recovery underway in the EU looks set to continue, according to the European Commission's autumn economic forecast for 2010-2012 published on 29 November. The recovery also appears to be broadening out, whereby the pick-up in exports starts to spur investment demand, the Commission finds. However, while the overall recovery is becoming increasingly self-sustaining, progress across EU Member States remains uneven. Meanwhile, some improvement is evident regarding public finances, with around half of the Member States set to post a lower general government deficit this year than in 2009. |
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Ministers back creation of European Stability Mechanism
Euro-area finance ministers agreed on 28 November on the creation of a European Stability Mechanism (ESM) to replace the current European Financial Stability Facility (EFSF) as of mid-2013. The ESM will assist euro-area Member States in financial distress in combination with strict economic and fiscal adjustment programmes. Building on the EFSF and complementing the new framework for reinforced economic surveillance in the EU, the ESM should help to safeguard financial stability in the euro area. The ministers’ agreement will be reflected in the proposal for the required treaty amendment that Council President Herman Van Rompuy is to submit this month to the European Council. Meanwhile, work is in progress in the Council of Ministers on the Commission proposals to strengthen the EU's economic governance, ultimately with a view to the Council and the European Parliament reaching agreement on the legislation by summer 2011. |
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Economic sentiment continues to improve
Economic sentiment has improved further in both the EU and the euro area, according to the latest figures published by DG ECFIN. The Economic Sentiment Indicator rose strongly in November, climbing by 1.3 points to 105.2 in the EU and by 1.5 points to 105.3 in the euro area. A majority of Member States reported either improvement or stabilisation in sentiment. Among the seven largest Member States, Germany registered the most significant increase (+2.8), followed by Italy (+1.4). Improvement was less pronounced in the UK (+0.5) and in the Netherlands (+0.4), while sentiment remained broadly stable in Spain, Poland and France. |
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Estonia in the run-up to the changeover to the euro
Estonia is currently making the last preparations for the introduction of the euro in a bit more than three weeks’ time. The preparations proceed smoothly. The advance delivery of banknotes and coins to banks - so-called frontloading - has started. The sale directly to the general public of mini-kits with 200 kroon worth (12.79 euros) of euro coins with the Estonian national side started on 1 December and around 246 000 such sets were sold via banks and post offices already during the first three days in December. The Estonian euro coins will only have legal tender status as from 1 January, but providing them in advance of e-day will make the changeover smoother. As from 1 December residents have been able to exchange their kroon cash for euros free of charge at the conversion rate (15.6466 kroon/euro). After stops in the three Estonian cities Narva, Tallinn and Tartu, the European Commission's travelling euro exhibition on the history and benefits of the euro and Economic and Monetary Union (EMU) has now arrived in Rakvere and will be officially opened on 11 December to remain open for the public there until 14 January 2011. |
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ECFIN launches survey on financial instruments for SMEs
DG ECFIN has published a questionnaire on financial instruments for small and medium-sized enterprises (SMEs) as part of a wider consultation and impact assessment which will inform the design of a possible successor to the EU’s 2007-2013 Competitiveness and Innovation Framework Programme (CIP). Financial instruments under the CIP aim to facilitate access to loans and equity for SMEs. The questionnaire – online until 4 February 2011 – aims to gather feedback from stakeholders involved in the delivery of financial instruments for SMEs concerning the rationale, nature and focus of EU support.
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New regulation on authentication of euro coins and handling of euro coins unfit for circulation
Effective and uniform authentication of euro coins throughout the euro area is the aim of the EU regulation adopted on 29 November by the European Parliament and the Council of Ministers. The regulation lays down, in a legally binding form, a common method for verifying that euro coins are authentic and fit for circulation. The new Regulation obliges credit institutions to ensure that euro coin authentication is carried out by means of coin processing equipment capable of detecting counterfeits, or manually. They may only use the types of coin-processing machines that have successfully passed a detection text carried out by the competent national authority. The new Regulation will apply from 1 January 2012, except for the provisions on handling of unfit euro circulation coins that will apply already as from the date of entry into force of the Regulation.
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Progress and key challenges in the delivery of adequate and sustainable pensions in Europe, Occasional Paper 71
The Joint Report by the Economic Policy Committee (Ageing Working Group), the Social Protection Committee (Indicators Sub-Group) and the European Commission services (DG ECFIN and DG Employment, Social Affairs and Equal Opportunities) points to the need for policy action to improve the long-term sustainability of public finances while ensuring adequacy of pensions. It finds that the
European level of policy-making provides added value in facilitating progress towards adequate and fiscally sustainable pensions.
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| Upcoming: How to rebalance the EU's Fiscal Framework, Economic Paper 429 |
| Upcoming: The Economic Adjustment Programme for Greece. Second review – autumn 2010, Occasional Paper |
| Upcoming: China's External Surplus: Simulations with a Global Macroeconomic Model, Economic Paper 430 |
| Upcoming: Quarterly report on the euro area |
Upcoming: The portfolio balance effect and reserve diversification,
Economic Paper 431 |
| Upcoming: Joint EPC/EC report on health systems, Occasional Paper |
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| No calls available right now. |
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Directorate-General for Economic and Financial Affairs |
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