Scoreboard for the Surveillance of Macroeconomic Imbalances in the European Union

Abstract

This chapter focuses on tools to counter macro-economic imbalances in the EU. The economic and financial crises have revealed the limits of the original EMU surveillance tools. To prevent and correct macro-economic balances, the Macroeconomic Imbalance Procedure (MIP) was adopted. In this chapter, the authors present an overview of the MIP, its Alert Mechanism, and the rationale behind the indicators. The scoreboard is included in the yearly Alert Mechanism Report (AMR), which serves, inter alia, as a basis for the Commission to draw a list of Member States that are subject for an in-depth review. The authors notice that the number of countries that are in the list has not decreased over the years because of external sustainability issues, export performance and competitiveness, private sector indebtedness, and housing and asset markets issues. Yet, there have been improvements in terms of deficits, gains of price and non-price competitiveness, and the export performance is more homogeneous. Private debt stocks persist and unemployment seems to have increased.