On Wednesday the European Commission released the second edition of its Alert Mechanism Report (AMR), as part of the Macroeconomic Imbalance Procedure (MIP) launched this year. The report concludes that the EMU countries Belgium, Finland, France, Italy, Malta, theNetherlands, Slovenia, Spain and Cyprus require in-depth reviews (compared with the first AMR,Maltaand theNetherlandshave joined the list). The program countries are excluded from the analysis because they are already monitored.
The study is based on the so-called "scoreboard", a catalog of 11 indicators (compared with the first release of the AMR, the Commission has added an eleventh indicator covering the growth rate of financial sector liabilities). Once the in-depth reviews are completed in spring 2013, the Commission will evaluate whether a country experiences a) imbalances or b) excessive imbalances. In the first case, the Commission proposes country-specific recommendations under the preventive arm of the MIP. In the second case, the Excessive Deficit Procedure as part of the corrective arm is triggered. In the first review round, the Commission considered the imbalances in Spain and Cyprus to be very serious, while those in France, Italy and Slovenia were considered to be serious. However, no country was found to be suffering excessive imbalances, so the corrective arm of the MIP has so far not been activated.