EU Warns 12 Euro-Area Nations Including Germany Over Imbalances

  • German trade surplus reflects subpar internal demand, EU says
  • France, Italy face criticism over lagging competitiveness

The European Commission flagged up potential economic troubles in 12 of the 19 euro-zone countries, from the export powerhouse Germany to the perpetually debt-ridden Italy.

The commission said on Thursday that it will have a closer look at imbalances in those countries, under a monitoring policy introduced at the height of the euro debt crisis.

In a repeat of criticism from last year, export-oriented Germany was faulted for a high trade surplus that leaves it vulnerable to an economic slowdown elsewhere.

“The very large and increasing external surplus and strong reliance on external demand expose growth risks and underlines the need for continued rebalancing toward domestic sources,” the commission said.

Overall, the commission said it will conduct further analysis of Germany, France, Italy, Ireland, the Netherlands, Portugal, Spain, Belgium, Slovenia and Finland; it added Austria and Estonia to the list.

Six countries not using the euro -- Britain, Sweden, Romania, Bulgaria, Croatia and Hungary -- also face renewed monitoring.

Findings will be published in February. Governments that ignore repeated warnings face financial penalties, though none have been imposed since the imbalances system was set up in 2011.

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