Last week, the European Commission published the results of its in-depth review of macroeconomic imbalances in 13 countries (Belgium, Bulgaria, Denmark, Spain, France, Italy, Hungary, Malta, the Netherlands, Slovenia, Finland, Sweden and the UK) under surveillance. In its report, it encourages further structural reforms, particularly on the labor market and wage setting. As part of the “European Semester” – the new agenda for coordinating economic and social policies –, the in-depth analysis of the economic situation in these country should help avoid budgetary and financial drifts that could affect the euro area. (Ref. 130251)
Wage indexation causes imbalances. The countries in the report have been under close surveillance since November 2012 because of major economic imbalances (Belgium, Bulgaria, Denmark, Spain, France, Italy, Hungary, Malta, the Netherlands, Slovenia, Finland, Sweden and the UK). This is the first step of an alert mechanism which can lead to a fine for countries that stray from the references imposed by the Maastricht Treaty – public debt below 60% of GDP and public deficit below 3% of GDP.
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