Alert Mechanism Report 2017
Economic Policy Committee 23 November 2016
Number of scoreboard flashes, 2013-2015
The same risks and challenges as in the previous year are broadly confirmed
2
Euro area current account balance
Euro area GDP, aggregate demand, trade balance and core inflation
• External flow imbalances are improving, but adjustment is asymmetric • Rebalancing within the euro area is still needed in a low inflation environment: (1) large and rising CA surplus reflect domestic demand slack; (2) net creditor countries need to keep sound external positions 3
External stock vulnerabilities remain significant NIIP and net external debt, 2015
4
Private and public sector debt deleveraging continues, but is slow and uneven Private debt: change from peak vs. 2015 level
Government debt: change from peak vs. 2015 level
• Deleveraging is hampered by low nominal growth • Deleveraging is not always most significant where most needed
5
Banking sector faces challenges Banks' return on equity
• Low profitability • In some cases, legacy of bad debts
Non-performing loans (% of total loans and advances)
6
House price dynamics warrant careful monitoring in some Member States House prices valuation levels and variations (2015)
7
Procedural conclusions • IDRs are warranted for 13 countries, six fewer than last year: BG, HR, CY, FI, FR, DE, IE, IT, NL, PT, SI, ES, SE
• All are countries identified with imbalances or excessive imbalances in the previous cycle
• No countries will be newly subject an IDR
8
Alert Mechanism Report 2017
Economic Policy Committee 23 November 2016