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Summary
Painfully slowly, the euro area is emerging from the recession – with improved public finances but too-high unemployment. ECOFIN closed the Excessive Deficit Procedure for a further six countries, leaving the number of countries still in the corrective arm of the SGP at 11, down from 24 three years ago.
The European Commission adopted a series of economic policy recommendations to strengthen the recovery. They are based on detailed analyses of each country's situation and provide guidance on boosting growth, competitiveness and create jobs. They have now been formally accepted by the European Council and ECOFIN so the next task is to monitor how well the Member States actually perform in implementing the recommendations – a key part of the new post crisis economic governance process.
Interestingly, the ECB published its convergence report on the eight euro `outs’ who are committed to join the euro in due course. Only three are ruled out by their public finances currently but all except Lithuania have yet to take the political decision to join the ERM. Lithuania has been a member of the ERM for the requisite two years and was approved to become the 19th euro member in 2015. There are strong signs that the shooting star `Putin’ is persuading some of these `outs’ to reconsider the euro seriously. Far from the euro disintegrating, it continues to expand – and may well experience a new wave of entrants during the new Parliament/Commission.
In other areas: TTIP negotiations continue between the US and the EU, but with Financial Services off the table for the time being; the European Commission has been reviewing the three watchdogs it launched in 2011 to make supervision of banks, markets and insurers more consistent across its 28 member countries and is considering levying the supervised organisations to pay for the system; and the new European Parliament has held its first session with the ECB President Draghi.