The European Macroeconomic Imbalance Procedure – Evaluation based on previous experiences and approaches to reform

Start of Project 01/2013
End of Project 12/2014

The Macroeconomic Imbalance Procedure (MIP) is part of the so-called Sixpack legislation of 2011 which was enacted to strengthen macroeconomic governance and is embedded in the European Semester. The MIP aims to identify, prevent and address the emergence of macroeconomic imbalances with potentially harmful effects on economic stability. The analysis is based on the so-called Scoreboard, which includes a variety of indicators with early warning properties with respect to a development of a crisis. The results of the Scoreboard evaluation are presented in the „Alert Mechanism Reports“. In case of sufficient indication of potentially problematic developments, an in-depth country analysis may be commissioned in order to evaluate the economic significance of the crisis signal and draw economic policy conclusions. The results of the in-depth analysis feed into the country-specific recommendations presented by the Commission towards the end of the European Semester and are part of the preventive arm of the MIP designed to help avoid the development of a crisis in the first place. In addition, there is a corrective arm which allows to penalize countries that are subject to an Excessive Imbalance Procedure but repeatedly fail to take adequate action towards correction of the imbalance. The project includes a comprehensive evaluation of the functioning of the MIP so far and suggests potential improvements.