New EU economic report: Britain, France marked down

The European Commission issued its first report card on EU economic imbalances Tuesday, warning Britain and France of declining export performance but steering clear of criticising Germany. European Union Economic Affairs Commissioner Olli Rehn named 12 of the bloc''s 27 states that came up short on a new "scoreboard" that uses a variety of economic indicators to establish "whether or not harmful imbalances exist."
The ranking system was introduced as part of a new emphasis on shared, cross-border eurozone economic governance. National budgets are to be vetted by Brussels to ensure they fit with common goals, with sanctions triggered if deficit and eventually debt levels stray too far from agreed margins. Seven of the 12 were from the 17-nation eurozone: Belgium, Cyprus, Finland, France, Italy, Slovenia and Spain.
The others were Bulgaria, Denmark, Hungary, Sweden and the United Kingdom. "If necessary, the Commission will then issue recommendations to the member states concerned, so they can take appropriate action," Rehn told a press conference at the European Parliament in Strasbourg, France.
Britain, France and Belgium were singled out for "further examination" in a bid to "better assess a relative loss of export market share as well as... an accumulated level of indebtedness," Rehn said. Triple A-rated eurozone Finland, like non-euro Scandinavian neighbours Denmark and Sweden, also suffered on this count.
Spain, meanwhile, would be given special attention too to try and break the cycle of high unemployment following prolonged housing and credit booms. Some economists have argued that Germany''s very success since the eurozone''s creation, with sustained surpluses, is making rivals less competitive, and Rehn said he would look into this over the coming months. He said Commission experts would "assess the role played by structural factors like the functioning of services markets as regards the impact on domestic consumption and investment."
But he maintained that the scoreboard "does not point at excessive imbalances," with an 8.0-percent decline in Germany''s export market share and public debt standing at 83 percent of gross domestic product (GDP). The decline in Germany''s export share was "limited compared to other eurozone countries," the commissioner noted.