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After Greece exited its ESM programme in August 2018, the European Commission activated enhanced surveillance for the initial post-programme period and Greece rejoined regular European economic policy coordination. The economic recovery proceeded for the second year, and Greece outperformed the fiscal target for the fourth successive year.
The Irish economy grew strongly in 2018, backed by buoyant domestic economic activity. Year-end data point to a small Exchequer cash surplus for 2018, driven by over-performing corporate tax receipts. Irish banks showed capital and liquidity buffers well above regulatory requirements, but long-term arrears, sectoral changes, and operational efficiency represent key challenges.
The ESM’s mission is to enable the countries of the euro area to avoid and overcome financial crises and to maintain long-term financial stability and prosperity.
As part of the ESM’s continued maturing process, the ESM, led by its extended leadership team, updated its mission statement in early 2019.
The euro area economy continued to grow in 2018, albeit at a slower pace than in 2017, in line with the maturing global economic cycle. Global growth deceleration is reflected in the slowdown of both advanced economies and emerging markets. Still, the euro area economy is supported by improvements in labour markets, the accommodative monetary stance, and the available fiscal space in some countries. These fundamentals should support a gradual adjustment to weaker global activity.
“More action is needed to strengthen the international role of the euro. There are short-term measures we can take, but nothing replaces the credibility boost that completing our Economic and Monetary Union would produce.
European Commission staff, in liaison with staff from the European Central Bank[1], visited Madrid on 7 and 8 May for the eleventh post-programme mission to Spain. Staff from the European Stability Mechanism participated in the meetings in the context of its Early Warning System.
The mission focused exclusively on financial sector developments. Macroeconomic and budgetary developments were not on the agenda, as the Commission has just released its 2019 spring economic forecast and is now assessing Spain’s fiscal situation as part of the European Semester process.
Message from the Managing Director
The ESM reached two milestones in 2018: Greece exited its ESM programme successfully in August after more than eight years under financial assistance, and the Euro Summit decided in December on a package of measure