EIM Economic - March 2014

08 April 2014

In a number of key areas, the implementation of Council recommendations are positively progressing and impacting on public deficits, competitiveness and economic imbalances. Some Member States need to step up fiscal consolidation if their deficit targets are to be reached.

• The Council conclusions on the 2014 Annual Growth Survey and European Semester 2014 stresses that financial market fragmentation has led to divergent interest rates for loans to businesses and households across the EU, with profound implications for labour markets.

• The Commission's in-depth reviews to identify macroeconomic imbalances and assesses progress in fiscal consolidation show that Member States are making progress in addressing their economic challenges, albeit unevenly.

• ECB's Cœuré said that deleveraging is not a process that policy-makers should seek to avoid; rather, it needs to take place and be properly managed.

• The Council adopted new rules on the taxation of savings income, marking "a major breakthrough in EU tax policy and a major step forward in the common fight against tax evasion". The OECD's Gurría also welcomed the 'international progress'.

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© Graham Bishop