Website: Statistics: Macroeconomic imbalances procedure

The financial and economic crises, and the sovereign debt crisis that swept over Europe in 2008 and the following years lead to a number of new EU Policy initiatives in 2010. The Van Rompuy Task Force report on Strengthening economic governance in the EU of 21 October 2010 and the Commission proposal of 29 September 2010 on an Enhanced Economic Policy Coordination included several suggestions for improving EU economic surveillance. The regulations implementing the Enhanced Economic Surveillance Package (the six-pack) were published on 23 November 2011.

An important initiative was the establishment of a Macroeconomic Imbalances Procedure (MIP) focusing on the identification of emerging or persistent macroeconomic imbalances at an early stage. The MIP is a part of a surveillance framework that aims to identify potential macroeconomic risks early on, prevent the emergence of harmful macroeconomic imbalances and correct the imbalances that are already in place. It is a system for monitoring economic policies and detecting potential harms to the proper functioning of the economy of a Member State, of the Economic and Monetary Union, and of the European Union as a whole. The rules on the economic governance are grounded in the European Semester, the EU's annual cycle of economic policy guidance and surveillance.

The MIP contains a number of sequential steps, having the Alert Mechanism Report (AMR) as a starting point. The AMR is accompanied by a Statistical Annex, based on a Scoreboard consisting of a small number of relevant, practical, simple, measurable, and available macroeconomic and macrofinancial indicators. The scoreboard, combined with appropriate economic judgement forms the basis for Alert Mechanism Report, prepared annually by the European Commission.

The MIP Scoreboard indicators cover:
- Internal imbalances: these are imbalances that can arise from public and private indebtedness; financial and asset market developments, including housing; the evolution of private sector credit flow and the evolution of unemployment.
- External imbalances: these can arise from the evolution of current account and net investment positions of Member States, real effective exchange rates, share of world exports and nominal unit labour cost.

The MIP scoreboard indicators should not be regarded as either policy targets or policy instruments; their interpretation should be supplemented by economic judgment and country-specific expertise. The composition of the MIP scoreboard indicators may evolve over time.