Abstract
IMF Country Report No. 23/264
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IMF Country Report No. 23/264
EURO AREA POLICIES
2023 ARTICLE IV CONSULTATION—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR EURO AREA
July 2023
Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2023 Article IV consultation with member countries forming the euro area, the following documents have been released and are included in this package:
A Press Release summarizing the views of the Executive Board as expressed during its July 12, 2023, consideration of the staff report that concluded the Article IV consultation with member countries.
The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on July 12, 2023, following discussions that ended on May 26, 2023, with the officials of EU institutions on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on June 28, 2023.
A Statement by the Executive Director for France, on behalf of the euro area member states and the European community.
The documents listed below have been or will be separately released.
Selected Issues
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
Copies of this report are available to the public from
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© 2023 International Monetary Fund
Press Release
PR23/268
IMF Executive Board Concludes 2023 Article IV Consultation with Euro Area
FOR IMMEDIATE RELEASE
Washington, DC – July 19, 2023: On July 12, the Executive Board of the International Monetary Fund (IMF) concluded the 2023 discussions on common euro area policies with member countries1
The euro area economy has shown remarkable resilience in the aftermath of Russia’s invasion of Ukraine and the largest terms of trade shock in several decades, thanks to a swift policy response and a strong rebound in contact-intensive services. However, economic activity weakened significantly in the second half of 2022 and slipped into a mild technical recession in early 2023 as financial conditions tightened, real wages declined, and consumer confidence fell. Looking ahead, growth is expected to pick up gradually throughout 2023 and 2024, supported by a recovery in real incomes in the context of continued tight labor market conditions, a further easing of supply constraints, and firmer external demand, even as financial conditions continue to tighten. While headline inflation has fallen sharply recently after reaching record high levels, core inflation is proving more persistent. As tight financial conditions restrain demand and supply shocks dissipate further, inflation is set to decline further but is expected to remain elevated for an extended period.
Uncertainty surrounding the outlook is high. Turbulence in financial markets, including from distress elsewhere, could lead to a contraction in credit and broader increase in risk aversion, while weaker external demand would negatively affect the bloc’s growth prospects. More persistent inflation, including due to strong wage growth, would require a tight policy stance for longer, weighing on domestic demand. Renewed supply shocks, which could result from an escalation of the war in Ukraine and a related increase of commodity prices, or a further intensification of geoeconomic fragmentation, would also push up inflation and hurt growth. On the upside, the economy could again prove more resilient than expected, especially amid a still large stock of excess savings.
Executive Board Assessment2
Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities for their decisive policy actions, which supported the resilience of the euro area economy in the face of a complex economic environment. Directors concurred that growth is set to pick up gradually, even as financial conditions tighten further, but recognized that the outlook is surrounded by high uncertainty. In this context, they agreed that bringing inflation back to target, while preserving financial stability, remains the near-term priority. Sustained structural reforms to enhance medium-term growth are also needed.
Directors noted the need to maintain a tight monetary policy stance to ensure that inflation returns to target in a timely manner, with most Directors stressing that further monetary policy tightening is needed. More generally, Directors called for a continued flexible and data-dependent approach. They also agreed that the Eurosystem’s bond holdings should continue to be reduced in a gradual and predictable manner, with the policy rate serving as the primary tool of monetary policy.
Directors welcomed that euro area banks are overall well capitalized and liquid. They stressed the importance of strong supervision and regulation of banks and nonbank financial intermediaries to mitigate risks related to asset valuations, liquidity, funding, and exposures to real estate markets. Directors called for making further progress toward completing the EU’s financial architecture to enhance economic and financial resilience.
Directors agreed that a tighter fiscal stance, as planned in 2024, would help contain inflationary pressures. In addition, they stressed that a reduction in deficits is essential to safeguard fiscal sustainability in many high-debt countries, including by phasing out energy relief measures and saving any revenue windfalls. Directors emphasized the importance of protecting investment as public finances are consolidated. They supported the ongoing reform of the European economic governance framework and encouraged reaching an agreement swiftly to anchor medium-term fiscal policy making. A number of Directors also considered that an EU-wide fiscal capacity for macroeconomic stabilization and provision of public goods would help strengthen this framework.
Directors noted that ambitious structural policies and investments are instrumental to increase potential growth and support the digital and green transitions. In this context, they underscored that making progress toward the National Recovery and Resilience Plan targets, with further efforts to promote innovation, facilitate the sectoral reallocation of labor, and reskill and upskill the workforce are crucial to achieve these objectives. Directors also stressed the EU’s critical role in promoting rules-based, open trade and welcomed its commitment to the World Trade Organization.
It is expected that the next consultation on euro area policies in the context of the Article IV obligations of member countries will be held on the standard 12-month cycle.
Euro Area: Main Economic Indicators, 2019–2028
Projections are based on aggregation of the latest projections by IMF country teams.
Contribution to growth.
Includes intra-euro area trade.
In percent.
In percent of potential GDP.
In percent of GDP.
Projections are based on member countries’ current account aggregations excluding intra-euro flows and corrected for aggregation discrepancy over the projection period.
Latest monthly available data for 2023.
Euro Area: Main Economic Indicators, 2019–2028
| Projections 1/ | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | ||||
| Demand and Supply (y/y percent change, unless otherwise specified) | |||||||||||||
| Real GDP | 1.6 | -6.1 | 5.3 | 3.5 | 0.9 | 1.5 | 1.8 | 1.7 | 1.4 | 1.3 | |||
| Private consumption | 1.4 | -7.7 | 3.7 | 4.5 | 0.5 | 2.1 | 2.0 | 1.8 | 1.4 | 1.3 | |||
| Public consumption | 1.7 | 1.0 | 4.3 | 1.4 | 0.0 | 0.8 | 0.7 | 0.9 | 1.1 | 1.1 | |||
| Gross fixed investment | 6.9 | -6.2 | 3.9 | 3.7 | 1.5 | 1.3 | 2.3 | 2.4 | 1.9 | 1.8 | |||
| Final domestic demand | 2.7 | -5.5 | 3.9 | 3.6 | 0.6 | 1.6 | 1.8 | 1.7 | 1.4 | 1.4 | |||
| Stockbuilding 2/ | -0.2 | -0.3 | 0.3 | 0.3 | -0.1 | -0.1 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Domestic demand | 2.4 | -5.7 | 4.1 | 3.8 | 0.6 | 1.6 | 1.8 | 1.7 | 1.4 | 1.4 | |||
| Foreign balance 2/ | -0.7 | -0.5 | 1.3 | -0.2 | 0.4 | 0.0 | 0.1 | 0.1 | 0.1 | 0.0 | |||
| Exports 3/ | 2.9 | -9.0 | 10.7 | 7.2 | 3.4 | 3.9 | 3.5 | 3.4 | 3.2 | 3.1 | |||
| Imports 3/ | 4.8 | -8.5 | 8.4 | 8.3 | 2.7 | 4.2 | 3.6 | 3.5 | 3.3 | 3.3 | |||
| Resource Utilization | |||||||||||||
| Potential GDP | 1.4 | -1.4 | 2.5 | 1.2 | 1.4 | 1.5 | 1.5 | 1.5 | 1.4 | 1.3 | |||
| Output gap | -0.1 | -4.7 | -2.1 | 0.0 | -0.4 | -0.5 | -0.2 | 0.0 | 0.1 | 0.1 | |||
| Employment growth 4/ | 1.3 | -1.4 | 1.5 | 2.3 | 0.5 | 0.2 | 0.3 | 0.2 | 0.1 | 0.1 | |||
| Unemployment rate 4/ | 7.6 | 8.0 | 7.7 | 6.7 | 6.8 | 6.7 | 6.6 | 6.5 | 6.5 | 6.5 | |||
| Prices | |||||||||||||
| GDP deflator | 1.7 | 1.8 | 2.1 | 4.6 | 5.3 | 3.2 | 2.3 | 1.9 | 1.9 | 1.9 | |||
| Consumer prices | 1.2 | 0.3 | 2.6 | 8.4 | 5.2 | 2.8 | 2.1 | 2.0 | 1.9 | 1.9 | |||
| Public Finance (percent of GDP) | |||||||||||||
| Overall fiscal balance | -0.6 | -7.1 | -5.3 | -3.6 | -3.5 | -2.7 | -2.3 | -2.1 | -2.0 | -2.0 | |||
| Primary balance | 0.8 | -5.7 | -4.0 | -2.1 | -2.0 | -1.0 | -0.5 | -0.2 | -0.1 | -0.1 | |||
| Structural balance 5/ | -0.4 | -4.0 | -3.5 | -2.4 | -2.8 | -2.3 | -2.2 | -2.1 | -2.1 | -2.1 | |||
| Structural primary balance 5/ | 1.0 | -2.7 | -2.2 | -0.9 | -1.2 | -0.7 | -0.4 | -0.2 | -0.1 | -0.1 | |||
| Gross public debt | 83.7 | 96.8 | 95.1 | 91.2 | 89.4 | 88.2 | 87.1 | 86.3 | 85.6 | 85.1 | |||
| External Sector 8/, 7/ | |||||||||||||
| Current account balance | 2.2 | 1.6 | 2.3 | -1.0 | 0.9 | 1.1 | 1.4 | 1.6 | 1.7 | 1.7 | |||
| Interest Rates (end of period) 4/ 8/ | |||||||||||||
| Euro short-term rate (€STR) | -0.5 | -0.6 | -0.6 | 1.6 | 3.1 | … | … | … | … | … | |||
| 10-year government benchmark bond yield | 0.4 | -0.1 | 0.3 | 3.0 | 3.2 | … | … | … | … | … | |||
| Exchange Rates (end of period) 8/ | |||||||||||||
| U.S. dollar per euro | 1.11 | 1.22 | 1.13 | 1.06 | 1.09 | … | … | … | … | … | |||
| Nominal effective rate (2005=100) | 106.0 | 114.5 | 110.8 | 111.1 | 112.7 | … | … | … | … | … | |||
| Real effective rate (2005=100, ULC based) | 83.7 | 87.4 | 82.1 | 81.1 | 82.0 | … | … | … | … | … | |||
Projections are based on aggregation of the latest projections by IMF country teams.
Contribution to growth.
Includes intra-euro area trade.
In percent.
In percent of potential GDP.
In percent of GDP.
Projections are based on member countries’ current account aggregations excluding intra-euro flows and corrected for aggregation discrepancy over the projection period.
Latest monthly available data for 2023.
Euro Area: Main Economic Indicators, 2019–2028
| Projections 1/ | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | ||||
| Demand and Supply (y/y percent change, unless otherwise specified) | |||||||||||||
| Real GDP | 1.6 | -6.1 | 5.3 | 3.5 | 0.9 | 1.5 | 1.8 | 1.7 | 1.4 | 1.3 | |||
| Private consumption | 1.4 | -7.7 | 3.7 | 4.5 | 0.5 | 2.1 | 2.0 | 1.8 | 1.4 | 1.3 | |||
| Public consumption | 1.7 | 1.0 | 4.3 | 1.4 | 0.0 | 0.8 | 0.7 | 0.9 | 1.1 | 1.1 | |||
| Gross fixed investment | 6.9 | -6.2 | 3.9 | 3.7 | 1.5 | 1.3 | 2.3 | 2.4 | 1.9 | 1.8 | |||
| Final domestic demand | 2.7 | -5.5 | 3.9 | 3.6 | 0.6 | 1.6 | 1.8 | 1.7 | 1.4 | 1.4 | |||
| Stockbuilding 2/ | -0.2 | -0.3 | 0.3 | 0.3 | -0.1 | -0.1 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Domestic demand | 2.4 | -5.7 | 4.1 | 3.8 | 0.6 | 1.6 | 1.8 | 1.7 | 1.4 | 1.4 | |||
| Foreign balance 2/ | -0.7 | -0.5 | 1.3 | -0.2 | 0.4 | 0.0 | 0.1 | 0.1 | 0.1 | 0.0 | |||
| Exports 3/ | 2.9 | -9.0 | 10.7 | 7.2 | 3.4 | 3.9 | 3.5 | 3.4 | 3.2 | 3.1 | |||
| Imports 3/ | 4.8 | -8.5 | 8.4 | 8.3 | 2.7 | 4.2 | 3.6 | 3.5 | 3.3 | 3.3 | |||
| Resource Utilization | |||||||||||||
| Potential GDP | 1.4 | -1.4 | 2.5 | 1.2 | 1.4 | 1.5 | 1.5 | 1.5 | 1.4 | 1.3 | |||
| Output gap | -0.1 | -4.7 | -2.1 | 0.0 | -0.4 | -0.5 | -0.2 | 0.0 | 0.1 | 0.1 | |||
| Employment growth 4/ | 1.3 | -1.4 | 1.5 | 2.3 | 0.5 | 0.2 | 0.3 | 0.2 | 0.1 | 0.1 | |||
| Unemployment rate 4/ | 7.6 | 8.0 | 7.7 | 6.7 | 6.8 | 6.7 | 6.6 | 6.5 | 6.5 | 6.5 | |||
| Prices | |||||||||||||
| GDP deflator | 1.7 | 1.8 | 2.1 | 4.6 | 5.3 | 3.2 | 2.3 | 1.9 | 1.9 | 1.9 | |||
| Consumer prices | 1.2 | 0.3 | 2.6 | 8.4 | 5.2 | 2.8 | 2.1 | 2.0 | 1.9 | 1.9 | |||
| Public Finance (percent of GDP) | |||||||||||||
| Overall fiscal balance | -0.6 | -7.1 | -5.3 | -3.6 | -3.5 | -2.7 | -2.3 | -2.1 | -2.0 | -2.0 | |||
| Primary balance | 0.8 | -5.7 | -4.0 | -2.1 | -2.0 | -1.0 | -0.5 | -0.2 | -0.1 | -0.1 | |||
| Structural balance 5/ | -0.4 | -4.0 | -3.5 | -2.4 | -2.8 | -2.3 | -2.2 | -2.1 | -2.1 | -2.1 | |||
| Structural primary balance 5/ | 1.0 | -2.7 | -2.2 | -0.9 | -1.2 | -0.7 | -0.4 | -0.2 | -0.1 | -0.1 | |||
| Gross public debt | 83.7 | 96.8 | 95.1 | 91.2 | 89.4 | 88.2 | 87.1 | 86.3 | 85.6 | 85.1 | |||
| External Sector 8/, 7/ | |||||||||||||
| Current account balance | 2.2 | 1.6 | 2.3 | -1.0 | 0.9 | 1.1 | 1.4 | 1.6 | 1.7 | 1.7 | |||
| Interest Rates (end of period) 4/ 8/ | |||||||||||||
| Euro short-term rate (€STR) | -0.5 | -0.6 | -0.6 | 1.6 | 3.1 | … | … | … | … | … | |||
| 10-year government benchmark bond yield | 0.4 | -0.1 | 0.3 | 3.0 | 3.2 | … | … | … | … | … | |||
| Exchange Rates (end of period) 8/ | |||||||||||||
| U.S. dollar per euro | 1.11 | 1.22 | 1.13 | 1.06 | 1.09 | … | … | … | … | … | |||
| Nominal effective rate (2005=100) | 106.0 | 114.5 | 110.8 | 111.1 | 112.7 | … | … | … | … | … | |||
| Real effective rate (2005=100, ULC based) | 83.7 | 87.4 | 82.1 | 81.1 | 82.0 | … | … | … | … | … | |||
Projections are based on aggregation of the latest projections by IMF country teams.
Contribution to growth.
Includes intra-euro area trade.
In percent.
In percent of potential GDP.
In percent of GDP.
Projections are based on member countries’ current account aggregations excluding intra-euro flows and corrected for aggregation discrepancy over the projection period.
Latest monthly available data for 2023.
Title page
EURO AREA POLICIES
STAFF REPORT ON THE 2023 CONSULTATION WITH MEMBER COUNTRIES ON COMMON EURO AREA POLICIES
June 28, 2023
KEY ISSUES
Context. The euro area economy has shown resilience in the aftermath of Russia’s invasion of Ukraine and the largest terms of trade loss in several decades, reflecting strong policy efforts to secure gas supplies and cushion disposable incomes. Nonetheless, activity has weakened, with the economy slipping into a mild technical recession in early 2023, and inflation is far above target. While headline inflation has started to decline with the easing of supply bottlenecks and energy prices, core inflation is proving more persistent. Euro area banks are well capitalized and liquid overall, but the rapid tightening of monetary policy after a prolonged period of accommodation can expose pockets of weakness in the financial system, including in the nonbank sector.
Outlook and risks. Growth in the euro area is projected to pick up gradually as real incomes slowly recover, supply constraints ease further, and external demand firms up, even as financial conditions continue to tighten. Output is likely to remain below pre-war trends throughout the forecast horizon since some of the weakening in the terms of trade will likely persist. Inflation is projected to converge to target by mid-2025. Uncertainty surrounding this baseline outlook, however, remains high. A sharp tightening of credit conditions, potentially arising out of market stresses, and a greater-than expected persistence of inflation, in the context of accelerating wages, are key near-term risks; the possibility of sovereign stress lingers in the background as an ever-present danger. On net, risks are skewed downward for growth and upward for inflation.
Policy priorities. The key near-term priority is to guide inflation back to target in a timely manner while preserving financial stability. This will necessitate a well-coordinated policy response with agility to adjust course if needed.
Further monetary policy tightening, maintained for some time, is needed to bring inflation to target, but high uncertainty calls for a flexible approach to policy setting. The policy rate should remain the primary policy tool, well understood in its effects and not constrained by any upper bound per se. At the same time, the Eurosystem should continue to reduce its bond holdings to shrink its footprint in the financial markets, in a gradual and predictable manner.
Enhancing the transparency of banks’ financial positions, including through rigorous supervisory scrutiny of the valuation of fixed income assets, liquidity, funding structures, and exposures to the cooling in real estate markets, is critical. Stress tests, including for interest rate risk, will help identify vulnerabilities. Supervisors and macroprudential policy setters should seek to ensure that temporarily elevated bank profits are used to build capital buffers against potential risks. Recent bouts of financial market turbulence underscore the importance of making the EU crisis management and bank resolution framework more flexible, implementing Basel III in a full and timely manner, ratifying the amended treaty of the European Stability Mechanism (ESM), and making meaningful progress toward the Banking Union (BU) and Capital Markets Union (CMU), all of which would enhance resilience. Strengthening regulations and closing data gaps in the nonbank financial sector are also essential to better understand and control risks to financial stability.
Tightening the fiscal stance in 2024 would help to dampen aggregate demand and limit additional pressure on inflation. Allowing energy support measures to expire, saving any temporary revenue windfalls, and refraining from discretionary policy packages with a negative impact on the overall fiscal balance would deliver the needed tightening.
Over the medium term, key challenges are to safeguard sustainability, deliver on climate commitments, and address structurally weak productivity growth.
Safeguarding fiscal sustainability: With debt above the already elevated pre-pandemic levels, a renewed emphasis on rebuilding fiscal space—focused on reversing the expenditure expansions of the past few years while protecting public investments—is key. This is particularly critical for high-debt countries. A new fiscal governance framework—consistent with sustained and meaningful fiscal adjustments in high debt countries, guided by medium-term plans—is urgently needed to anchor fiscal policy. Establishing an independent European Fiscal Council and creating a central fiscal capacity for macro-stabilization and the provision of common goods would help strengthen economic governance and resilience.
Delivering the green transition while strengthening trade: EU countries remain far off from achieving their commendably ambitious emission reduction objectives, highlighting the importance of maintaining policy momentum. The proposed EU emissions trading scheme (ETS) reform is welcome and should proceed as planned. A common EU Climate Investment Fund would help ensure that the EU’s emissions reduction goals are achieved efficiently. Policy initiatives should safeguard the integrity of the single market and the EU should continue to work toward globally cooperative green solutions that minimize distortions. In a period of rising trade tensions and barriers, the EU should remain rules-based and open. Foreign subsidies, investment screening, and export controls should be narrowly targeted to specific objectives, and the authorities should resist calls to use such tools to provide a competitive advantage to domestic industries.
Raising productivity and potential growth: Expeditious implementation of National Recovery and Resilience Plans (NRRPs) would help achieve the EU’s green objectives, and boost resilience and growth. Ensuring reskilling and upskilling of the workforce, with a strong focus on digital skills, could raise the dynamism of labor markets while a renewed emphasis on innovation is warranted to durably lift productivity growth.
Approved By
Alfred Kammer (EUR) and Mark Flanagan (SPR)
Discussions took place during May 12–26, 2023. Mission members included O. Celasun (head), L. Brandao Marques, N. Klein, G. Ljungman, V. Nguyen, L. Ratnovski, A. Santos, A. Shahmoradi, and F. Toscani (all EUR), joined by A. Bhatia, N. Arnold, N. Belhocine and J. Frie (all EUO). The Executive Director, M. Buisse, and his advisor, I. Valdés Fernández, and R. Rüffer, ECB observer at the IMF, participated in the meetings. N-J. Hansen (WHD), M. Patnam, T. Lan, J. Zhou (all EUR) and R. Meeks (MCM) contributed to the report. M. Maneely, W. Zhao, X. Li, and K. Cerrato (all EUR) supported the mission.
Contents
Acronyms
CONTEXT
ECONOMIC AND POLICY DEVELOPMENTS
OUTLOOK AND RISKS
POLICY DISCUSSIONS
A. Reducing Inflation while Preserving Financial Stability
B. Building Resilience and Countering Fragmentation
STAFF APPRAISAL
BOXES
1. Inflation, Imported Prices, Profits, and Wages
2. Energy Prices, Energy Efficiency and Potential Growth
3. The Potential Impact of Quantitative Tightening
4. The Long-term Impact of the Energy Price Shock on Output and Income Divergence
FIGURES
1. Banking Sector Overview
2. Real Sector Developments
3. Inflation Developments
4. Public Sector Accounts
5 External Sector Developments
TABLES
1. Main Economic Indicators
2. External Sector Assessment
3. Risk Assessment Matrix
ANNEXES
I. A Roadmap for Monetary Policy
II. Raising Rates with a Large Balance Sheet: The Eurosystem’s Net Income and its Fiscal Implications
III. Bank Stress Testing of Euro Area Banks
IV. Macroprudential Policy for Nonbanks in the EU: The Case of Investment Funds
V. Progress Against IMF FSAP Recommendations
VI. EU’s Economic Sanctions on Russia
VII. Statistical Issues
Acronyms
| AML/C FT | Anti-Money Laundering/Combating the Financing of Terrorism |
| APPs | Asset Purchase Programs |
| BU | Banking Union |
| BRRD | Bank Recovery and Resolution Directive |
| CAPB | Cyclically-Adjusted Primary Balance |
| CBAM | Carbon Border Adjustment Mechanism |
| CCyBs | Countercyclical Capital Buffers |
| CET1 | Common Equity Tier 1 |
| CIF | Climate Investment Fund |
| CMU | Capital Markets Union |
| CMDI | Crisis Management and Deposit Insurance |
| CRD | Capital Requirements Directive |
| CRE | Commercial Real Estate |
| CRR | Capital Requirements Regulation |
| DSA | Debt Sustainability Analysis |
| GDIP | Green Deal Industrial Plan |
| EBA | European Banking Authority |
| ECA | European Court of Auditors |
| EC | European Commission |
| ECB | European Central Bank |
| EDIS | European Deposit Insurance Scheme |
| EFC | European Fiscal Council |
| EIB | European Investment Bank |
| ESM | European Stability Mechanism |
| ESMA | European Securities and Markets Authority |
| ESRB | European Systemic Risk Board |
| ETS | Emission Trading Scheme |
| EU | European Union |
| FCI | Financial Conditions Index |
| IEA | International Energy Agency |
| LCR | Liquidity Coverage Ratio |
| LSI | Less Significant Institution |
| LTROs | Longer Term Refinancing Operations |
| MiCA | Regulation on Markets in Crypto-Assets |
| MRO | Main Refinancing Operations |
| NBFIs | Non-bank Financial Intermediaries |
| NCB | National Central Bank |
| NFC | National Fiscal Council |
| NGEU | Next Generation EU |
| NII | Net Interest Income |
| NIM | Net Interest Margin |
| NPL | Nonperforming Loan |
| NRRPs | National Recovery and Resilience Plans |
| NSFR | Net Stable Funding Ratio |
| OECD | Organization for Economic Co-operation and Development |
| PEPP | Pandemic Emergency Purchase Program |
| PD | Probability of Default |
| REIFs | Real Estate Investment Funds |
| RRE | Residential Real Estate |
| RRF | Recovery and Resilience Facility |
| RWA | Risk-weighted Assets |
| SI | Significant Institution |
| SPF | Survey of Professional Forecasters |
| SRB | Single Resolution Board |
| SRF | Single Resolution Fund |
| SRM | Single Resolution Mechanism |
| SSM | Single Supervisory Mechanism |
| TLTRO | Targeted longer-term refinancing operation |
| TPI | Transmission Protection Instrument |
| QT | Quantitative Tightening |
| WEO | World Economic Outlook |
| WTO | World Trade Organization |
Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. Staff hold separate annual discussions with the regional institutions responsible for common policies for the countries in four currency unions – the Euro-Area, the Eastern Caribbean Currency Union, the Central African Economic and Monetary Union, and the West African Economic and Monetary Union. For each of the currency unions, staff teams visit the regional institutions responsible for common policies in the currency union, collect economic and financial information, and discuss with officials the currency union’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis of discussion by the IMF Executive Board. Both reports subsequently are considered an integral part of the Article IV consultation with each member.
At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.
