The macroeconomic situation of 12 EU Member States needs to be analysed more in depth

The first Alert Mechanism Report published by the Commission on the EU's new rules on economic governance considers that the macroeconomic situation in the following countries needs to be investigated further: Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Italy, Hungary, Slovenia, Spain, Sweden and the UK.

The European Commission has published its first ever annual Alert Mechanism Report (AMR), which reports on the results of the first step of the macroeconomic imbalances procedure, which is a new tool that helps detect and correct risky economic developments as a part of the EU’s new rules on economic governance, the so-called "six-pack" which was officially adopted by the Council in November 2011. On this first report, the Commission identifies 12 EU Member States whose macroeconomic situation needs to be analysed in more depth. The in-depth analysis will reveal if macroeconomic imbalances exist or not.

Olli Rehn, Vice-President for Economic and Monetary Affairs and the Euro, highlighted that if it turns out that imbalances exist and that they are harmful, this new tool is a meaningful step towards correcting the imbalances which built up over the years. If they are benign, the procedure stops. If they are harmful, preventive or corrective action needs to be taken. He also added that sound fiscal policies and early detection and correction of risky economic imbalances are necessary conditions to return to sustainable growth and jobs.

The Alert Mechanism Report identifies Member States whose macroeconomic situation needs to be scrutinised in more depth, based on a scoreboard of ten macroeconomic indicators, such as a loss of competitiveness, a high level of indebtedness or assets price bubbles and taking into account other economic data. This is the starting point of the new Macroeconomic Imbalance Procedure (MIP) that will deepen the dialogue on economic policy making with the Member States. If necessary, the European Commission will issue a recommendation to the Member State concerned to take appropriate action to correct the situation or prevent imbalances from persisting.