Euro Area Policies: Staff Report for the 2015 Article IV Consultations with Member Countries
IMF Staff Country Reports, July 27, 2015
Source details
- Canonical URL
- Euro Area Policies: Staff Report for the 2015 Article IV Consultations with Member Countries
Other formats
Bibliographic details
- Published: July 27, 2015
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513505121.002
Context
- The recovery is strengthening, underpinned by lower oil prices and the ECB’s expanded asset purchase program.
- The medium-term outlook remains weak, weighed down by the legacies of insufficient demand, lagging productivity, and weak bank and corporate balance sheets.
Policy overview
- A concerted, collective effort is needed to sustain the recovery, avoid overburdening monetary policy, and lift potential growth over the medium term, which would have positive spillovers for the rest of the world.
Demand support
- Quantitative easing (QE) has boosted confidence and improved financial conditions.
- The ECB’s clear communication to stay the course on QE until inflation is on a sustained adjustment path will help anchor expectations.
- Countries should adhere to the SGP, but those with fiscal space should use it to support investment and structural reforms.
Balance sheet repair
- High non-performing loans (NPLs) in some banks are eroding profitability and discouraging new lending.
- Complementary policies are needed to incentivize NPL resolution through:
- strengthened prudential supervision,
- insolvency reforms,
- development of distressed debt markets.
- Asset management companies (AMCs) could help banks to offload NPLs and assist with corporate restructuring.
Productivity-enhancing structural reforms
- Labor and product market reforms should be combined with faster implementation of the Services Directive.
- Further improvements of insolvency regimes are recommended.
- A greater push toward a single market in capital, transport, energy, and the digital economy is advised.
- A capital markets union would help diversify funding sources and reduce reliance on bank lending.
Better economic governance
- A more effective and simpler governance framework, including a move towards "outcome-based" benchmarking, could help advance structural reforms.
- The fiscal framework could be simplified and strengthened.
Key statistics and identifiers
- Pages: 56
- Volume: 2015
- Issue: 204
- Series: Country Report No. 2015/204
- DOI: https://doi.org/10.5089/9781513505121.002
- Stock No: 1EUREA2015002
- ISBN: 9781513505121
- ISSN: 1934-7685
- Publication date on landing page: July 27, 2015
International Monetary Fund. European Dept. "Euro Area Policies: Staff Report for the 2015 Article IV Consultations with Member Countries", IMF Staff Country Reports 2015, 204 (2015), accessed 9/11/2026, https://doi.org/10.5089/9781513505121.002