Summer 2018 Interim Economic Forecast: Resilient Growth amid increased uncertainty
The Spring 2018 Economic Forecast published today shows that growth is set to remain strong in 2018 and 2019, at 2.1% this year and 2% next year in both the EU and the euro area. However, after five consecutive quarters of vigorous expansion, the economic momentum moderated in the first half of 2018 and is now set to be 0.2 percentage points lower in both the EU and the euro area than had been projected in the spring. Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “European economic activity remains solid with 2.1% GDP growth forecast for the euro area and the EU28 this year. Nevertheless, the downward revision of GDP growth since May shows that an unfavourable external environment, such as growing trade tensions with the US, can dampen confidence and take a toll on economic expansion. The growing external risks are yet another reminder of the need to strengthen the resilience of our individual economies and the euro area as a whole.” Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “Growth in Europe is set to remain resilient, as monetary policies stay accommodative and unemployment continues to fall. The slight downward revision compared to the spring reflects the impact on confidence of trade tensions and policy uncertainty, as well as rising energy prices. Our forecast is for a continued expansion in 2018 and 2019, although a further escalation of protectionist measures is a clear downside risk. Trade wars produce no winners, only casualties.” The full press release is available in all languages here. The Summer 2018 Interim Economic Forecast is available here.
Preparation of the Eurogroup and ECOFIN meetings, 12-13 July 2018
Vice-President Dombrovskis and Commissioner Moscovici will represent the Commission at the Eurogroup and ECOFIN meetings taking place today and tomorrow. Today’s Eurogroup meeting will provide the Commission with an opportunity to present the Summer 2018 Interim Economic Forecast. The Eurogroup will discuss the budgetary situation in the euro area as a whole, focusing on the prospects for 2019 and receive a presentation from the Chairman of the European Fiscal Board (EFB), Niels Thygesen, on the EFB’s recently published report. The Commission and the European Central Bank will present the main findings from their post-programme surveillance missions to Ireland and Spain. The Eurogroup will also discuss the outcome of the June Euro Summit and issues related to the deepening of the Economic and Monetary Union. Commissioner Moscovici will participate in the press conference following the meeting. At tomorrow’s ECOFIN meeting, the Council will discuss the Commission’s proposal to introduce more flexibility for Member States to apply the same low VAT rates to e-publications as they can currently apply to traditional books. Ministers are expected to look at a proposal which would introduce the possibility for Member States to apply a temporary reverse charge mechanism for VAT. They will also exchange views on the outcome of the June meeting of the European Council. Finally, the Austrian Presidency will present ministers with its work programme in the field of economic and financial affairs. Vice-President Dombrovskis will participate in the press conference following the ECOFIN meeting.
Member States’ compliance with EU law: room for improvement
Today’s 35thAnnual Report on monitoring the application of EU law sets outhow the Commission monitored and enforced EU law in 2017. The online Single Market Scoreboard (edition 2018), also published today and marking the 25th anniversary of the EU Single Market, shows that whilst most barriers to the free movement of persons, services, goods and capital are being eliminated, in some fields the situation is stalling or even worsening. Each failure to correctly and timely apply EU law denies citizens and businesses the rights and the benefits they enjoy under EU rules. On the EU infringements proceedings, the Annual Report for 2017 shows a slight decrease by 5.91% of open infringement cases compared to the previous year. On the Single Market Scoreboard, the best performing countries were Finland, Denmark and Slovakia, while the highest number of red cards (performance below average) was given to the Czech Republic, Ireland and Greece. The Single Market remains Europe’s most precious asset for the millions of citizens and businesses, and the Commission is committed to ensure, by checking on the implementation of EU Single Market rules, that they benefit each day from the freedom to live, work, shop and trade across the Member States. For the 2017 Annual Report, a full press release and an EU-28 fact sheet are available online as well as 28 fact sheets by country. For the EU Single Market Scoreboard (edition 2018), see the performance overview and the performance per Member State (28 EU + 3 EEA). Finally, answers on the frequently asked questions on the general EU infringement procedure are available here.