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Macroeconomic Imbalance Procedure (MIP)

The aim of the Macroeconomic Imbalance Procedure (MIP) is to detect and address trends that adversely affect the operation of the economy of an EU country, the euro area or the EU as a whole. It is a key element in the EU’s reformed economic governance framework brought into being following the 2008 financial crisis.

It is designed to:

  • identify potential risks at an early stage (an alert mechanism),
  • prevent the emergence of harmful macroeconomic imbalances, and
  • correct any imbalances that are already in place.

The alert mechanism uses 14 indicators (e.g. trends in export market shares, net international investment, labour costs and private and public sector debt) to identify potential risks.

The European Commission may propose that the Council issues recommendations to countries identified as having imbalances. Countries with excessive imbalances may be subject to an enhanced process of specific monitoring or may enter the Excessive Imbalance Procedure (EIP). An EIP may eventually lead to sanctions for euro area countries in cases of repeated lack of compliance with obligations.

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