European Semester 2016: fewer Member States have economic imbalances than a year ago

European Semester 2016: fewer Member States have economic imbalances than a year ago

EU Member States are making progress in addressing imbalances in their economies.

They have also advanced in carrying out the country-specific recommendations issued last year, although to varying degrees across countries and policy areas. These efforts are key in strengthening the European recovery and fostering convergence. They also reflect the focus of this year's European Semester: re-launching investment, implementing structural reforms and pursuing responsible fiscal policies.

The Commission decided last November that 18 Member States merited in-depth reviews to assess whether they were experiencing macroeconomic imbalances, and if so, how serious these imbalances were. Of these countries, the Commission has concluded that six are not experiencing any imbalances. Twelve are experiencing either imbalances or excessive imbalances.

Commissioner Marianne Thyssen, responsible for Employment, Social Affairs, Skills and Labour Mobility, said: "Although the situation varies from country to country, Member States are making overall progress in bringing back unemployed people to the labour market, including young people. The European Semester continues to drive Member States' reforms to help people back into jobs."

As anticipated in the October 2015 Communication on steps towards completing the Economic and Monetary Union, the Commission has made the implementation of the macroeconomic imbalances procedure (MIP) clearer and more transparent by reducing the number of categories for imbalances from six to four: no imbalances, imbalances, excessive imbalances and excessive imbalances with corrective action (excessive imbalances procedure).

From now on, all Member States that are found to have imbalances or excessive imbalances will be subject to specific monitoring adapted to the degree and nature of the imbalances. This will enhance the surveillance of Member States' policy responses through an intensified dialogue with the national authorities, through missions and though progress reports.

• Bulgaria, Croatia, France, Italy and Portugal are found to be experiencing excessive imbalances.
• Finland, Germany, Ireland, the Netherlands, Spain, Sweden and Slovenia are found to be experiencing imbalances.
• Austria and Estonia, which had in-depth reviews for the first time this year, are deemed not to be experiencing imbalances. Belgium, Hungary, Romania and the United Kingdom are found not to be experiencing imbalances.

Next Steps

The Council is expected to discuss and adopt conclusions on the Commission's findings emerging from the in-depth reviews carried out for 18 Member States' economies.

In March and April, the Commission will hold further bilateral meetings with the Member States. These meetings will provide an opportunity to discuss the country reports with the national authorities.

In April, Member States are expected to present their national reform programmes and their stability programmes (for euro area countries) or convergence programmes (for non-euro area countries).

Based on all these sources, the Commission will present in spring its proposals for a new set of country-specific recommendations, targeting the key challenges to be addressed. The recommendations will also include fiscal guidance and be based on the Commission Spring Forecast which will incorporate final 2015 budgetary data validated by Eurostat.