EU warns of economic imbalances in Germany, France, Italy
2014-03-06 12:26:07
The Eurorpean Union(EU) on Wednesday warned of economic imbalances in large member states such Germany, France and Italy,calling to increase investment and boost demand to improve economic climate.
The European Commission on Wednesday published its conclusions emerging from the in-depth reviews (IDRs) carried out into 17 Member States' economies.
The Commission considers that 14 Member States are experiencing imbalances: Belgium, Bulgaria, Germany, Ireland, Spain, France, Croatia, Italy, Hungary, the Netherlands, Slovenia, Finland, Sweden, and Britain. In Croatia, Italy and Slovenia, these imbalances are considered excessive.
Speaking of the macroeconomic performance,EU Commissioner for Economic and Monetary Affairs Olli Rehn said,"Our analysis presented today shows that Member States are making progress in addressing their economic challenges. But this progress is uneven and in some cases must be stepped up."
"We hope to see a strong response from Member States and stand ready to support them in a constructive partnership for reforms to strengthen the recovery and lift job creation," he added.
According to the conclusion,a number of imbalances are common to several Member States. Among the challenges are the large external liabilities in some economies, persistent large current account surpluses reflecting subdued domestic demand in a few countries, cost competitiveness for the countries which used to register the largest current account deficits and those experiencing large losses in export market shares.
On fiscal issues, some Member States need to step up fiscal consolidation if their deficit targets are to be reached,EU said in the conclusion. Both in the EU and in the euro area, the debt-to-GDP ratio is forecast to have increased in 2013 but should peak this year before starting to decline.
"Italy must address its very high level of public debt and weak external competitiveness. Both are ultimately rooted in the country's protracted sluggish productivity growth and require urgent and decisive action to reduce the risk of adverse effects on the Italian economy and of the eurozone," the conclusion warned.
Among the largest euro area Member States, the commission recommended Germany strengthening domestic demand and medium-term growth,and urged France and Italy to address bottlenecks to medium-term growth while working on structural reforms and fiscal consolidation.