Macroeconomic Imbalance Procedure

The Macroeconomic imbalance procedure (also called ' Macroeconomic surveillance procedures ' or ' method macroeconomic imbalances '), English ' Macroeconomic Imbalance Procedure ( MIP) ' called, is a process of the European Union, which was introduced in autumn 2011 in the wake of the euro crisis. It is used for prevention and correction of risky macroeconomic developments, such as high current account deficits, excessive private debt and real estate bubbles. The MIP is part of the so-called ' six-pack ' of the EU, which aims to monitor the economic and fiscal policy in the EU and euro area to strengthen.

The procedure

If there are imbalances in a country, but are not found to be excessive, follow based on the In-depth Review policy recommendations under the preventive arm of the MIP. This process is part of the European Semester ( the annual program for the coordination of economic policies ). The MIP- relevant recommendations are thus integrated into the annual country-specific recommendations from the Commission providing guidance for national economic policy.

If an excessive imbalance threatens the functioning of Economic and Monetary Union, the method provides a continuation under the corrective arm of the MIP before, the Excessive Imbalance Procedure Excessive imbalance procedure or (EIP ). The Member State concerned shall provide ' corrective action plan ' which contains specific structural actions and deadlines for their execution a. The economic monitoring by the Commission will be intensified, and the Member State is required to submit regular progress reports. If the Member State does not submit a satisfactory corrective action plan or failed repeatedly in the implementation of agreed measures, he faces financial penalties in the amount of 0.1 % of gross domestic product. The Commission has, however, never had a Excessive Imbalance Procedure initiated.

' Programme Countries ' (such as Greece) are not covered by the Macroeconomic Imbalance Procedure, since they are already in the context of the grants under strict macroeconomic surveillance.

Implementation

The Macroeconomic Imbalance Procedure was introduced for the first time with the Alert Mechanism Report in February 2012. On the basis of the report, the Commission conducted in-depth analyzes ( In-depth Reviews ) for twelve Member States: Belgium, Bulgaria, Denmark, Finland, France, Italy, Slovenia, Spain, Sweden, Hungary, the United Kingdom and Cyprus.

The recessed analyzes confirmed that these Member States were subject to macro-economic imbalances of various thickness. However, none of them were found to be excessive, that is why the Excessive Imbalance Procedure was not initiated. In contrast, the ' preventive arm ' of the MIP was activated: The results of the analysis were integrated into the country-specific recommendations, the 2012, the Commission adopted May as part of the European Semester. These recommendations were endorsed by the Council of Ministers in June, and by the European Council in July 2012.

On 28 November 2012, the second alert mechanism report was published. Based on this, the Commission recommended that in-depth analyzes ( In-depth Reviews ) to progress in the twelve Member States to assess with imbalances. Due to the ' Scoreboard' values ​​, the report also in-depth analyzes for Malta and the Netherlands were initiated beyond. The corresponding in- depth reviews published on 10 April 2013. The Commission found imbalances in two states for excessively (Spain and Slovenia), and threatened with the introduction of the Excessive Imbalance Procedure for these two states.

In the third Alert Mechanism Report on 13 November 2013, the Commission issued a new round of in-depth analyzes for the above-mentioned states. In addition, Germany, Luxembourg, Croatia and Ireland are subjected to a detailed analysis in this round. In March 2014, the Commission announced that no imbalances are 14 countries, including in Germany ( The Commission found no imbalances in Denmark, Luxembourg and Malta). Spain imbalances will not be excessive. However, the Commission found the imbalances in Italy, Croatia and Slovenia for excessively.

The scoreboard

The scoreboard (English for scoreboard ) in the Alert Mechanism Report currently consists of 11 indicators for monitoring of external imbalances and competitiveness, as well as internal imbalances. However, the indicators can be changed any time. For each indicator, ' indicative ' thresholds were set.

External imbalances and competitiveness

• Average current account balance for the last 3 years as a percentage of gross domestic product ( GDP), with threshold values ​​of 6 % of GDP and - 4% of GDP;

• Net foreign assets as a percentage of GDP with a threshold of 35% of GDP;

• Percentage change in export market shares over 5 years with a threshold of 6% of GDP;

• Percentage change in nominal unit labor costs over 3 years with thresholds of 9 % for euro-area members and 12 % for countries outside the euro area;

• Percentage change in the real effective exchange rates based on HICP / CPI price indices over 3 years compared to 41 other industrialized countries, with thresholds of -5 % and 5 % for euro-area members and -11 % and 11 % for countries outside the euro area;

Internal economic imbalances

• Debt of the private sector in% of GDP ( consolidated) with a threshold of 133%;

• Flow of credit to the private sector as % of GDP ( consolidated) with a threshold of 15%. Here, the flow of credit to the private sector shows the annual change in the stock of liabilities (loans and securities other than shares ) of the sector of non -financial corporations and households and nonprofit institutions serving households;

• Annual change in house prices compared to HICP inflation with a threshold of 6%;

• Public debt as% of GDP with a threshold of 60%;

• Average unemployment rate for the last 3 years with a threshold of 10%.

• Annual growth of Gesamtverbindlchkeiten of the financial sector, with a threshold of 16.5 %.