Macroeconomic Imbalance Procedure

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The Macroeconomic or macroeconomic imbalance procedure (also called "General economic surveillance process" or "method macroeconomic imbalances"), English Macroeconomic Imbalance Procedure (MIP) called, is a process of the European Union , which in autumn 2011 in the wake of the euro crisis has been introduced. It is used to prevent and correct risky macroeconomic developments such as B. high current account deficits or surpluses, excessive private debt or real estate bubbles.

The MIP is part of the so-called six - pack of the EU, which aims to strengthen the monitoring of economic and fiscal policy in the EU and the euro area .

The procedure

The MIP is carried out once a year. The first step in each round is the Alert Mechanism Report or Alert Mechanism Report of the European Commission. Based on a so-called scoreboard (Engl. For " scoreboard ") of indicators, the report identifies the countries and topics in-depth analysis (in-depth reviews) require.

On the basis of these in-depth reviews, the commission determines the existence and nature of imbalances and their trend. Depending on the severity of the imbalances, the Commission adopts policy recommendations under either the preventive arm or the corrective arm of the MIP.

If imbalances exist for a country but are not found to be excessive, policy recommendations under the preventive arm of the MIP follow based on the in-depth review . 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 Commission's annual country-specific recommendations, which constitute guidelines for national economic policy.

If an excessive imbalance jeopardize the effectiveness of the EMU, the method provides a continuation under the corrective arm before the MIP, the excessive imbalance method or Excessive Imbalance Procedure (EIP). The member state concerned must submit a corrective action plan that contains concrete structural policy measures and deadlines for their implementation. Economic monitoring by the Commission will be stepped up and the Member State will have to submit regular progress reports. If the member country does not submit a satisfactory Corrective Action Plan or repeatedly fails to implement the agreed measures, it faces financial sanctions worth 0.1% of the gross domestic product .

Program countries (such as Greece ) are not covered by the Macroeconomic Imbalance Procedure, as they are already under strict macroeconomic monitoring as part of the financial aid.

implementation

The Macroeconomic Imbalance Procedure was first initiated with the Alert Mechanism Report in February 2012. On the basis of the report, the commission carried out in-depth reviews for twelve member states: Belgium , Bulgaria , Denmark , Finland , France , Italy , Slovenia , Spain , Sweden , Hungary , the United Kingdom and Cyprus .

The in-depth analyzes confirmed that these member states were subject to macroeconomic imbalances of varying degrees. However, none of them were found to be excessive, so 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 that the Commission adopted in May 2012 as part of the European Semester. These recommendations were confirmed by the Council of Ministers in June and the European Council in July 2012.

The second Alert Mechanism Report was published on November 28, 2012. Based on this, the commission recommended in-depth reviews to assess the progress made in the twelve member states with imbalances. On the basis of the scoreboard values ​​in the report, in-depth analyzes were also initiated for Malta and the Netherlands . The corresponding in-depth reviews were published on April 10, 2013. The Commission found imbalances in two countries to be excessive ( Spain and Slovenia ) and threatened to initiate the Excessive Imbalance Procedure for these two countries.

In the third alert mechanism report on November 13, 2013, the commission specified a new round of in-depth analyzes for the states mentioned above. In addition, Germany , Luxembourg and Croatia as well as Ireland will be subjected to an in-depth analysis in this round . In March 2014, the Commission announced that there were imbalances in 14 countries, including Germany (the Commission found no imbalances in Denmark , Luxembourg and Malta ). Spain's imbalances are no longer considered excessive. By contrast, the Commission found the imbalances in Italy , Croatia and Slovenia to be excessive.

The results in the following years are:

2014: Imbalances: Belgium, Bulgaria, Germany, Finland, France, Ireland, Netherlands, Sweden, Spain, Hungary, United Kingdom. Excessive imbalances: Italy, Croatia, Slovenia

2015: Imbalances: Belgium, Germany, Finland, Ireland, Netherlands, Romania, Sweden, Spain, Slovenia, Hungary, United Kingdom. Excessive imbalances: Bulgaria, France, Italy, Croatia, Portugal.

2016: Imbalances: Germany, Finland, Ireland, Netherlands, Sweden, Slovenia, Spain. Excessive imbalances: Bulgaria, France, Italy, Croatia, Portugal, Cyprus

2017: Imbalances: Germany, Ireland, the Netherlands, Slovenia, Spain and Sweden. Excessive imbalances: Bulgaria, France, Italy, Croatia, Portugal, Cyprus. However, none of the six countries is required to submit a corrective action plan.

2018: Imbalances: Bulgaria, Germany, Ireland, Spain, France, Netherlands, Portugal, Sweden. Excessive imbalances: Cyprus, Croatia, Italy.

Although Denmark, Germany and the Netherlands have continuously exceeded the threshold of 6% current account surplus since 2011, in many years by over 8%, none of these three countries has ever been found to be excessively imbalanced.

The scoreboard

The scoreboard in the alert mechanism report currently consists of 14 indicators for monitoring external imbalances and competitiveness, as well as internal imbalances. The indicators can, however, be changed at any time. Indicative thresholds were set for each indicator.

External imbalances and competitiveness

  • Average current account balance for the last 3 years as a percentage of gross domestic product (GDP) with different threshold values ​​for surpluses and deficits of +6% of GDP and −4% of GDP
  • Net external 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 threshold values ​​of +9% for countries in the euro area and +12% for countries outside the euro area
  • Percentage change in real effective exchange rates based on the HICP / CPI price indices over 3 years compared to 41 other industrialized countries with threshold values of −5% and + 5% for countries in the euro area and −11% and + 11% for countries outside the Euro area

Domestic economic imbalances

  • Private sector debt as% of GDP (consolidated) with a threshold of 133%
  • Private sector credit flow as% of GDP (consolidated) with a threshold of 14%. Here, the flow of credit in 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 private non-profit organizations
  • annual change in real estate prices in comparison with the inflation by the HICP 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 in total financial sector debt, with a threshold of 16.5%
  • Change in the employment rate over three years with a threshold of −0.2%
  • Change in long-term unemployment rate over three years with a threshold of 0.5%
  • Change in the youth unemployment rate over three years with a threshold of 2%

Individual evidence

  1. ↑ Deutsche Bundesbank Glossary "Macroeconomic Imbalance Method"
  2. ^ Macroeconomic Imbalance Procedure . Retrieved April 10, 2013.
  3. ^ MIP scoreboard . Retrieved April 10, 2013.
  4. ^ The MIP framework . Retrieved April 10, 2013.
  5. ↑ First Commission Alert Mechanism Report: Tackling Macroeconomic Imbalances in the EU . Retrieved April 10, 2013.
  6. ^ Following in-depth reviews, Commission calls on Member States to tackle macroeconomic imbalances . Retrieved April 10, 2013.
  7. ^ Alert Mechanism Report: Contribution to Macroeconomic Adjustment in the EU . Retrieved April 10, 2013.
  8. ↑ Macroeconomic Imbalances: Commission completes in-depth reviews for 13 Member States . Retrieved April 10, 2013.
  9. ↑ Third Alert Mechanism Report on Macroeconomic Imbalances in EU Member States . Retrieved December 11, 2013.
  10. ↑ Results of the in-depth reviews in accordance with Regulation (EU) No. 1176/2011 on the prevention and correction of macroeconomic imbalances . Retrieved March 5, 2013.
  11. ↑ EU Commission in-depth reviews 2017. Accessed on May 29, 2017 .
  12. ↑ European Commission: European Semester 2018: Assessment of progress on structural reforms, prevention and correction of macroeconomic imbalances and results of in-depth reviews under Regulation (EU) No. 1176/2011 . Brussels 7 March 2018, p. 20-21 .
  13. ↑ Eurostat Scoreboards Imbalances. Retrieved May 29, 2017 .
  14. ↑ EU Commission macroeconomic imbalance procedure scoreboard. Retrieved May 29, 2017 .
  15. ↑ Eurostat press release 25/2012, 14 February 2012

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