OECD Economic Surveys: Euro Area

1999-0804 (online)
1995-3747 (print)
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OECD’s periodic surveys of the Euro Area’s economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Euro Area 2016

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10 June 2016
9789264256361 (PDF) ; 9789264256347 (EPUB) ;9789264256354(print)

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This 2016 OECD Economic Survey of the Euro Area examines recent economic developments, policies and prospects. The special chapter cover: Making public finances more growth and equity-friendly.

Also available in French
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  • Basic statistics of the euro area, 2015

    This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of the euro area were reviewed by the Committee on 3 May 2016. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 20 May 2016.The Secretariat’s draft report was prepared for the Committee by Álvaro Pina and Jan Stráský under the supervision of Pierre Beynet. Research assistance was provided by Desney Wilkinson-Erb and secretarial assistance was provided by Sylvie Ricordeau.The previous Survey of the euro area was issued in April 2014.

  • Abbreviations and acronyms
  • Executive summary

    Expected average annual inflation based on the difference between 5 and 10-year inflation swaps.

  • Assessment and recommendations

    Europe has made important progress in harnessing and reinforcing its policies and institutions to recover from a double-dip recession and improve crisis management. Very supportive monetary policy has helped growth to pick up gradually over the past two years (, Panel A), and contributed to reduce tensions in sovereign debt markets (, Panel B). The effect of fiscal policy on demand has turned broadly neutral. Important building blocks of banking union, on both supervision and resolution fronts, have come into operation, improving the resilience of the European financial system. Confidence in the European project has recovered from its lows in 2013, although it is still well below what it was before the crisis ().

  • Progress in structural reform
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    • Making public finances more growth and equity-friendly

      Across the euro area, the ability of public finances to support equitable growth has tended to deteriorate. Concerns about high and rising public debt, together with market pressure in some cases, led to sharp fiscal consolidation in 2011-13, against the backdrop of a weak economic situation at the time, which is considered to have made the recession deeper and longer. Consolidation has slowed down afterwards, but countries with fiscal space have made limited use of the leeway allowed under EU fiscal rules to support euro area aggregate demand. The expenditure composition has generally become less growth-friendly, with large cuts in public investment. On the revenue side, already high taxes on labour have tended to increase further. Structural reforms with direct positive implications for the composition or efficiency of public finances have stalled.While most policy levers to improve public finances remain at the country level, European and national policies can be mutually reinforcing in fiscal governance and public investment. To achieve a euro area fiscal stance that fosters the recovery, countries with fiscal space under the Stability and Growth Pact rules should use budgetary support to raise growth, and existing incentives and flexibility should be taken advantage of to pursue reforms of tax and spending policies. At the national level, it is essential to further upgrade budgetary frameworks, including through the adoption of expenditure rules and regular performance of spending reviews. To promote capital formation and make it more effective, EU budget resources for investment should be deployed in a way to crowd in national public funds and private financing, and foster greater investment productivity. At the national level, better co-ordination of investment across levels of government and upgraded administrative capacity would increase investment efficiency.

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