PARIS (MNI) – The European Commission on Tuesday cited 12 EU
countries for significant macroeconomic imbalances, saying that they
could pose a risk to financial stability.
The 12, which include France, Italy, Spain and the U.K., will be
subject to in-depth reviews to determine the extent of the imbalances
and whether or not they are harmful.
The debt crisis “highlighted risks that macroeconomic imbalances
pose for financial stability,” Olli Rehn, the commissioner for economic
and monetary affairs, said in statement. “Sound fiscal policies and
early detection and correction of risky economic imbalances are
necessary conditions to return to sustainable growth and jobs,” he said.
The Commission’s first annual Alert Mechanism Report is part of the
tighter surveillance of member states it has undertaken in the wake of
the crisis. It is based on 10 indicators, including declining
competitiveness, a high level of indebtedness or assets price bubbles
that could pose danger signals for an economy.
The countries cited for imbalances also included Belgium, Bulgaria,
Cyprus, Denmark, Finland, Hungary, Slovenia and Sweden.
The Commission cited the U.K. for the loss of export market share
over the last decade and the high level of private debt. France was
cited for a declining market share in exports, leading to a
deterioration in its trade and current account balances.
Italy, the Commission said, has seen a “significant deterioration
in competitiveness since the mid-1990s,” while Spain is going through an
adjustment period, following an extended housing and credit boom.
The Commission said that if its analysis determines that the
imbalances are harmful, corrective actions including demands for policy
changes or sanctions are possible.
–Paris newsroom, +33142715540; jduffy@marketnews.com
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