The Council of the European Union has approved the 2026 in-depth reviews under the Macroeconomic Imbalance Procedure (MIP), endorsing the European Commission's assessments of economic vulnerabilities across all Member States. The approval, formalised in a Council note dated 3 July 2026 and scheduled for adoption at the 8 July 2026 meeting, marks the annual stock-taking of macroeconomic risks in the EU.
The reviews, conducted by the Commission, show that EU GDP growth slowed to 1.5% in 2025, with inflation expected to rise in 2026 due to the Middle East conflict. Greece, the Netherlands and Sweden are no longer considered to experience imbalances, reflecting improvements in their external positions, debt dynamics or housing markets. Italy, Hungary and Slovakia continue to experience imbalances, though Italy and Slovakia have shown some progress in reducing vulnerabilities. Romania continues to suffer excessive imbalances, with fiscal and current account deficits diminishing but remaining significant.
House price growth accelerated in 2025, increasing overvaluation risks in several Member States. Government debt ratios rose in many countries, remaining above pre-pandemic 2019 levels and expected to increase further. The banking sector remains healthy, with strong capital ratios, high profitability and non-performing loans near historical lows.
The Council calls for full application of the MIP, including activation of the Excessive Imbalance Procedure where appropriate, to address remaining vulnerabilities. The approval sets the stage for further policy recommendations and potential corrective action for Member States with persistent imbalances.
The decision directly affects national governments, which may face increased pressure to implement structural reforms or fiscal consolidation. EU institutions, particularly the Commission, gain backing for enforcement measures. Financial markets may react to the identification of persistent imbalances in Italy, Hungary, Slovakia and Romania. The banking sector benefits from the positive assessment of its resilience, but faces potential headwinds from rising government debt and interest rates.
The Commission is expected to issue country-specific recommendations in the coming weeks, and may propose opening Excessive Imbalance Procedures for Member States with excessive imbalances. The Council will monitor progress through the European Semester cycle.