Major macroeconomic imbalances were revealed around Europe as the 2008 credit crisis erupted followed by the European debt crisis. This prompted the European Union to establish a so-called macroeconomic imbalance procedure (MIP). Using a scoreboard consisting of fourteen indicators, the European Commission highlights potentially weak links in the national economies of member states . Once these imbalances have been identified, the Commission can work on a more in-depth analysis of developments in a member state, after which the country concerned is asked to draw up an action plan. This plan needs to include concrete measures aimed at eliminating the imbalances. If, on two consecutive occasions, the action plan is found to be ineffective or insufficiently implemented upon approval, the European Union may impose a fine on the member state concerned.
Back to article