On 22 February, the European Commission published its annual analysis of the economic and social situation in the Member States. The analysis includes an assessment of remaining imbalances, as well as a report on the implementation of the Fiscal Compact, which stipulates that national budgets must be in balance or in surplus under the balanced budget rule, in national legal frameworks. The Commission finds that Member States are making headway in implementing the individual policy guidance they received last year around the “virtuous triangle” of boosting investment, pursuing structural reforms and ensuring responsible fiscal policies. Moreover, although they are still above pre-crisis levels, unemployment rates are declining in most Member States due to the economic recovery. The In-Depth Reviews contained in some of the country reports (summarised in country cards) show that large current account deficits have been corrected, and sizeable stocks of private, public and external debt have started falling as a share of GDP. However, high current account surpluses are only being adjusted to a limited extent, while large stocks of non-performing loans weigh on the financial sector in some Member States.