EIM Economic - February 2014

04 March 2014

The euro area has emerged from recession but must guard against complacency, so more far-reaching reform lies ahead.

• ECOFIN recognised the fragility of the economic recovery, was confident the AQR/stress test will be reassuring but still wants to develop alternatives to bank funding for the economy (as does the ECB).

• The Commission’s Winter Forecast highlighted the exit from recession and the scale of adjustment already done (Greece achieved its first external balance since 1948).

• Bruegel highlighted that the biggest risk now is complacency, whilst Commissioner Almunia commented on his investigations into tax competition that may involve dubious state aid.

• Germany retreated on the breadth of the FTT proposal and the Parliament argued that the Troika’s work should eventually only involve the EU but that might need a State Bankruptcy Law.

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© Graham Bishop