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Olli Rehn speaking © European Union Autumn 2013 economic forecast: Gradual recovery, external risks
- EU leaders call for economic governance to strengthen further
- European Council urges a coordinated European approach on preparing for the ECB’s upcoming assessment of banks
- Commission adopts ambitious Work Programme for 2014
- Task Force for Greece issues fifth quarterly report, finds improvements in Greece’s use of EU Structural and Cohesion funds
- ECB unveils details of comprehensive assessment for euro area banks in advance of supervisory role
- EU and China conclude fourth High Level Economic and Trade Dialogue
- Euro news “Real Economy” TV programme looks at banking union
- Euro exhibition opens in Daugavpils, Latvia
Publications
Selected speeches
Classifieds
Agenda
Top story
Olli Rehn speaking © European Union Autumn 2013 economic forecast: Gradual recovery, external risks

In recent months, there have been encouraging signs that an economic recovery is underway in Europe. After contracting up to the first quarter of 2013, the European economy started to grow again in the second quarter and real GDP is set to continue growing in the remainder of this year. According to the autumn forecast released on 5 November, growth in the second half of 2013 is expected at 0.5 % compared to the same period in 2012 in the EU. On an annual basis, real GDP growth this year is estimated at 0.0 % in the EU and -0.4 % in the euro area. Looking ahead, economic growth is forecast to gradually gather pace over the forecast horizon, to 1.4 % in the EU and 1.1 % the euro area in 2014, reaching 1.9 % and 1.7 % in 2015, respectively. Internal and external adjustment in Europe is continuing, underpinned in many cases by significant structural reforms and fiscal consolidation implemented in recent years. This has improved the conditions for domestic demand to gradually become the main engine of growth in Europe. However, against the background of a weakened outlook for emerging market economies, the return to solid growth will be a gradual process.



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More Olli Rehn, European Commission Vice-President for Economic and Monetary Affairs and the Euro
There are increasing signs that the European economy has reached a turning point. The fiscal consolidation and structural reforms undertaken in Europe have created the basis for recovery. But it is too early to declare victory: unemployment remains at unacceptably high levels. That’s why we must continue working to modernise the European economy, for sustainable growth and job creation.
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Olli Rehn, Commission Vice-President responsible for Economic and Monetary Affairs and the Euro

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Brussels European Council © European Union
EU leaders call for economic governance to strengthen further

At the European Council from 24-25 October in Brussels, EU heads of state or government underscored that the coordination of economic policies should be further strengthened, in order to promote strong, sustainable and inclusive growth in the euro area. Building on recent achievements leaders emphasised the need to increase the level of commitment, ownership and implementation of economic policies and reforms in euro area countries, underpinned by democratic legitimacy and accountability in making and implementing decisions. They said that closer coordination of economic policies should focus on policy areas where positive effects on competitiveness, employment, and the functioning of the Economic and Monetary Union (EMU) are most prominent. Leaders plan to follow up at the December summit with decisions on contractual arrangements and on associated solidarity mechanisms. The October Council welcomed the European Commission’s Communication on the social dimension of EMU of 2 October and reiterated the importance of employment and social developments within the European Semester.

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Brussels European Council © European Union
European Council urges a coordinated European approach on preparing for the ECB’s upcoming assessment of banks

The European Council welcomed the final adoption on 15 October by the Council of the Single Supervisory Mechanism (SSM), the first step towards a banking union for the euro area. In this context, Member States taking part in the SSM should, as a matter of urgency, establish a coordinated European approach in preparation for the comprehensive assessment of credit institutions by the European Central Bank (ECB). EU leaders also called on the Eurogroup to finalise guidelines for direct bank recapitalisation through the European Stability Mechanism (ESM) once the SSM is up and running. They pledged their commitment to reach a general Council approach on the Commission’s proposal for a Single Resolution Mechanism (SRM) by year’s end, so that it can be adopted during the current legislative period.

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Computer Keyboard with Euro symbol© iStockphoto
Commission adopts ambitious Work Programme for 2014

The Commission’s Work Programme adopted on 22 October for the coming year focuses on results. "2014 will be a year of delivery and implementation", President Barroso said." The programme identifies the key growth-enhancing proposals to be completed in the months ahead, including completion of the banking union, the single market and the digital agenda. Growth and jobs remain the Commission’s top priority in 2014, with an emphasis on combating youth unemployment and facilitating SMEs’ access to financing. Completing the banking union is in line with the Blueprint for a deep and genuine Economic and Monetary Union, which also entails reinforcing economic governance. In terms of external action, key areas include the trade agenda, notably negotiations on a Transatlantic Trade and Investment Partnership with the US, and important international negotiations, such as on climate change and development. The final EU budget for 2014 hinges on the outcome of ongoing conciliation talks between the Parliament and the Council.

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The Task Force for Greece © European Union, 2012
Task Force for Greece issues fifth quarterly report, finds improvements in Greece’s use of EU Structural and Cohesion funds

The fifth quarterly report for the Task Force for Greece (TFGR) for the period April-October 2013 pointed to a “broadening and deepening” of the technical assistance provided by the Task Force, which supports the Greek authorities in implementing the economic reforms linked to country’s financial assistance programme. Published on 22 October, the report found that there was a “striking” improvement in Greece’s absorption of EU Structural and Cohesion funds, as well as “good progress” in unlocking infrastructure investments -- with work on four large motorways that had been delayed by the crisis soon to restart. Looking to the challenges ahead, the Task Force said that technical assistance will be particularly important in improving the functioning of tax administration; building a public administration that better serves the needs of citizens and businesses; and helping create a supportive and predictable business climate.

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Euro symbol in frankfurt © iStockphoto
ECB unveils details of comprehensive assessment for euro area banks in advance of supervisory role

The ECB on 24 October announced details of the comprehensive assessment to be conducted for 128 euro area banks, as it prepares to take up its role as the euro area’s single banking supervisor next year. The assessment marks an important step in the preparation of the Single Supervisory Mechanism (SSM) and, more generally, towards greater transparency of banks’ balance sheets and consistency of supervision in Europe. The exercise will consist of three elements: a supervisory risk assessment to review key risks, including liquidity, leverage and funding; an asset quality review (AQR) to enhance the risk of bank exposures by examining the quality of their assets; and a stress test to determine the resilience of banks’ balance sheets to stress scenarios. In the first health check, banks will be judged according to a Common Equity Tier 1 capital ratio of 8%, drawing on the definition in the EU’s Capital Requirements Directive IV (CRDIV). Details about the stress test will be announced later, in coordination with the European Banking Authority (EBA).

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4th EU/China High Level Economic and Trade Dialogue © European Union
EU and China conclude fourth High Level Economic and Trade Dialogue

The EU and China held their fourth High Level Economic and Trade Dialogue (HED) on 24 October in Brussels. The overarching theme of the meeting was how the EU and China can address challenges and create opportunities through open economies and cooperation, at a time when both sides are in the midst of serious economic reforms. A broad and ambitious agenda with a range of economic and trade issues highlighted the importance of bilateral cooperation and provided an opportunity to intensify it. There was a strong political commitment to ensure the HED continues as a forum for strategic discussion that sets the direction for future engagement, as well as a mechanism to manage cooperation and competition between the two economies. Topics addressed during the meeting include: the international economy and major developments within both economies; future sources of growth; trade and investment; industrial policy and technological cooperation; and customs cooperation.

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Sharon Bowles ©www. sharonbowles.org.uk
Euro news “Real Economy” TV programme looks at banking union

Building a banking union is at the top of the Commission's agenda – and the subject of the latest (5 November) episode of “Real Economy” on the Euronews television channel. The programme addresses questions such as “What is a banking union?” and “How do we shore up banks?”, with UK MEP Sharon Bowles, chair of the European Parliament's Economic and Monetary Affairs Committee, sharing her expertise as the main interviewee. The series is designed to bring the complexities of EU economic matters closer to a daily audience of 6.5 million viewers. Every other Tuesday, a new episode premieres at 10.45 a.m. CET, and is repeated 12 times throughout the week. “Real Economy” can also be followed online – live or on demand - with the next episode on "Innovation and Growth in Europe’s Regions" scheduled for 19 November.

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Euro exhibition © European Union
Euro exhibition opens in Daugavpils, Latvia

After a first successful stop in Riga, the European Commission's travelling euro exhibition has arrived in Daugavpils (Latvia). It aims to inform Latvians about their new currency and support the counry’s preparations for the changeover to the euro on 1 January 2014. The exhibition opened on 22 October with a ceremony attended by Inna Steinbuka, Head of the Commission Representation in Latvia, Arina Andreičika, Head of the Euro Office of the Latvian Ministry of Finance, and Jānis Lāčplēsis, mayor of Daugavpils. 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 run in Daugavpils until 29 November before heading to Liepaja (02/12-12/01).

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Publications
Labour market developments in Europe, 2013. European Economy 6/2013 © European Union
Labour market developments in Europe, 2013. European Economy 6/2013

The report finds that after four years of deteriorating labour market outcomes, the first signs of stabilisation in EU unemployment are emerging within the context of GDP growth turning positive, improving sentiment and recent reforms. Major labour market disparities persist across the EU and the euro area. A wider dispersion in unemployment rates across the EU and the euro area largely reflects differences in the intensity of the rebalancing and deleveraging process. In view of the high and persistent unemployment rates in most EU countries, the report digs deeper into the analysis of cyclical versus structural unemployment in the EU. It reasons that policy responses across the board for the EU or the euro area would work only to a certain extent, since the magnitude and typology of challenges are largely country-specific.


Olli Rehn's blog: The Golden State sees opportunities in Europe
Estimating the drivers and projecting long-term public health expenditure in the European Union: Baumol's "cost disease" revisited. European Economy. Economic Papers 507.
Fiscal consolidation and spillovers in the euro area periphery and core. European Economy. Economic Papers 506.
Effects of fiscal consolidation envisaged in the 2013 Stability and Convergence Programmes on public debt dynamics in EU Member States. European Economy. Economic Papers 504.
Finland’s high house prices and household debt: a source of concern? Country Focus 6/2013.
Selected speeches
- President Barroso. Speech 13/858 of 25 October. Statement following the European Council meeting.
- President Barroso. Speech 13/847 of 23 October. At the European Parliament plenary debate on the European Council.
Classifieds
- ECFIN Workshop 11 December. Government wage bill: determinants, interactions and effects. Deadline for registration 3 December 2013.
- Public consultation on the Green Action Plan for SMEs. Deadline 12 December.
- Consultation on Crowdfunding in the EU. Deadline 31 December.
Agenda
6-7 November
Strasbourg
European Parliament Plenary
14-15 November
Brussels
Eurogroup/ECOFIN
15 November
Brussels
Commission autumn package (Alert mechanism report, Annual Growth Survey, assessment of draft budgetary plans, Economic Partnership programmes, Excessive deficit procedure)
18-21 November
Strasbourg
European Parliament Plenary
22 November
Brussels
Eurogroup meeting
26 November
Brussels
DG ECFIN’s Annual research conference
9-10 December
Brussels
Eurogroup/ECOFIN
9-12 December
Strasbourg
European Parliament Plenary
15-16 December
Canberra, Australia
G20 Deputies meeting
19-20 December
Brussels
European Council
13-16 January 2014
Strasbourg
European Parliament Plenary
27-28 January
Brussels
Eurogroup/ECOFIN
3-6 February
Strasbourg
European Parliament Plenary
13-14 February
Brussels
European Council, Brussels
17-18 February
Brussels
Eurogroup/ECOFIN
22–23 February
Sydney, Australia
G20 Ministerial and Central Bank Governors' meeting
10-11 March
Brussels
Eurogroup/ECOFIN
10-13 March
Strasbourg
European Parliament Plenary
20-21 March
Brussels
European Council
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Directorate-General for Economic and Financial Affairs