Navigation

In focus - Economic Policy

International Economic Policy

Introduction

Since 2010, the Treaty of Lisbon has served as the legal basis for the European Union. It stipulates the fundamental freedoms. These include the free movement of goods, persons, services and capital. This is the foundation of the single European market. Rules which apply to the whole of Europe make it easier to do business efficiently. Today, much of economic policy is determined by way of European co-ordination.

The single European market has progressed a long way, but economic policy remains first and foremost a national responsibility in many areas. The debt crisis in the eurozone has made it clear that even greater economic policy co-ordination is needed, and that the responsibility of the member states for their own actions must be strengthened. To this end, the Stability and Growth Pact has been supplemented by a new procedure to prevent and correct excessive macroeconomic imbalances. Like the Stability and Growth Pact, it is subdivided into a preventive and a corrective arm, and includes instruments which can insist effectively on necessary structural reforms. The procedure is concentrated on countries which have weaknesses in terms of their competitiveness.

Further to this, the eurozone countries in particular have promised to undertake the measures they deem necessary to strengthen the forces for growth. To this end, the heads of state and government annually make commitments at the highest political level in the context of the Euro Plus Pact, and these are then implemented by the states within the following year.

A new level of priority is attached to existing procedures of economic policy co-ordination which involve all EU countries, and particularly the annual country-specific recommendations. The member states respond to these in their National Reform Programmes (NRPs). Germany's NRP is drawn up by the Federal Government under the leadership of the Economic Affairs Ministry.

Detailed information on the sovereign debt crisis in the eurozone and the European policy measures to tackle the crisis can also be found at www.bundesfinanzministerium.de.

The Organisation for Economic Co-operation and Development (OECD) is a multilateral organisation which observes and analyses economic policy trends and developments in its member states and around the world.The OECD aims to encourage policies which increase economic and social well-being on the basis of a democratic market economy. To this end, it produces independent analyses and forecasts, as well as country surveys and thematic reports on key economic policy issues. It focuses on the long-term challenges of economic policy. This makes it a central forum for the debate on structural challenges.

The main economic policy body in the OECD which addresses these structural issues is the Economic Policy Committee (EPC). Germany - represented by the Federal Ministry for Economic Affairs and Energy - supplies one of the two vice-chairs of this committee. The Economic Affairs Ministry feeds experience and recommendations into the work of the committee, and thus helps to shape the international debate.

The EPC focuses on current macroeconomic and structural policy issues on a cross-border basis. Its work is supported by various thematic sub-groups, e. g. a working group on macroeconomic and structural policy analysis and a working group handling monetary and fiscal policy and balance of payment imbalances.

Also, the Economic Development and Reform Committee (EDRC) regularly produces country surveys on the various OECD member states together with the OECD Secretariat. These analyse specific economic policy challenges of individual countries, and make recommendations.

Both working groups maintain an intensive dialogue on current challenges and best practices in economic policy.

The leading OECD publications include working papers on economic policy, the World Economic Outlook, and policy recommendations on the basis of country surveys.

The OECD and its working groups are engaged in a close dialogue with international partners (e. g. the emerging economies) and the social partners.