The poor economic situation in Germany and nine other European Union countries could have negative consequences for the entire bloc, the European Commission warned in a report published on Wednesday.
The “macroeconomic imbalances” in these countries have raised concerns in the so-called Alert Mechanism Report and will now be analyzed in more depth, the commission announced in Strasbourg, France.
“The EU faces serious structural challenges that threaten our long-term prosperity,” said EU Economy Commissioner Valdis Dombrovskis.
“Urgent action is needed,” he warned.
The aim of the report is to detect and address such problems at an early stage. Indicators assessed include unemployment rate, debt levels, credit flows and real estate prices.
Macroeconomic imbalances in one EU country – for example a high current account deficit or a real estate bubble – can have spillover effects on other Member States.
The unusually high inflation in recent years, including increased labor costs and real estate prices, has taken its toll, according to the committee.
In addition to Germany, which has long been seen as Europe’s superpower, Cyprus, Greece, Italy, Hungary, Estonia, Romania, Slovakia, Sweden and the Netherlands will also be further analyzed in 2025.
