Promoting Structural Reforms In The Euro Area

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Building A Better Union

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Author : Angana Banerji
language : en
Publisher: International Monetary Fund
Release Date : 2015-09-11

Building A Better Union written by Angana Banerji and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-09-11 with Business & Economics categories.

The momentum for structural reforms is waning in the euro area at a time when even faster progress is needed to boost productivity and growth, achieve real economic convergence, and improve the resilience of the monetary union. What can the European Union (EU) institutions do to bridge this divide? This paper argues for greater simplicity, transparency and accountability in the EU governance framework for structural reforms. Our three interrelated proposals—“outcome-based” benchmarking; better use of existing EU processes to strengthen oversight and reduce discretion; and improved financial incentives—could help advance reforms. Ex post monitoring by an independent EU-level “structural council” and ex ante policy innovation by national productivity councils could strengthen accountability and ownership. Deeper governance reforms should be considered in the medium-term with a view toward a greater EU role in promoting convergence.

Promoting Structural Reforms In The Euro Area

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Author : Eulalia Rubio
language : en
Publisher:
Release Date : 2014

Promoting Structural Reforms In The Euro Area written by Eulalia Rubio and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Euro categories.

At the moment when a new EU leadership is taking office and new policy priorities are being discussed, talks about the need to encourage structural reforms in euro area economies are reviving with force. There is however much confusion on why it is so important right now to promote reforms in the euro area and what would be the best mechanism to do so. This Policy paper by Eulalia Rubio distinguishes between three different rationales to promote reforms in the euro area: 1. improving the competitiveness of the euro area as a whole, 2. enhancing the euro area's capacity to adjust to shocks 3. and reducing intra-euro competitiveness gaps. The Policy paper discusses the relevance of these three objectives in today's EMU and analyses which policy response would be more appropriate to address each of them. Three main conclusions derive from this analysis. First, the costs of reforms are not fully recognised in the implementation of the stability and growth pact, particularly for countries under the corrective arm of the pact. To improve the competitiveness of the euro area, a more direct link should be made between efforts of reform and the extension of deadlines for deficit correction. Second, while there is a clear case for inducing euro area countries having excessive market rigidities to reform, monetary incentives do not seem the most appropriate tool to do so. To effective incentive to reform would be establishing minimum requirements of market flexibility and openness to competition as a pre-condition to member states' participation into a future euro area fiscal stabilisation mechanism. Third, non-cost competitiveness factors - and particularly, the quality of public institutions - account for an important part of the current intra-euro competitiveness divide. To close this divide, there is a case to accompany current efforts of 'internal devaluation' with an EU action aimed at supporting public governance reforms in peripheral countries.

Strengthening The Euro Area

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Author : Mr.John C Bluedorn
language : en
Publisher: International Monetary Fund
Release Date : 2019-06-17

Strengthening The Euro Area written by Mr.John C Bluedorn and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-06-17 with Business & Economics categories.

Cross-country differences in economic resilience—in an economy’s ability to withstand and adjust to shocks—remain significant in the euro area. In part, the differences reflect the lack of a national nominal exchange rate as a mechanism to adjust to shocks. The IMF staff has argued that union-wide architectural changes such as the banking union, the capital markets union, and a central fiscal capacity can help foster greater international risk sharing. Yet even these changes cannot insure against all shocks. National policies thus have a vital role to play. This IMF staff discussion note analyzes how national structural policies can help euro area countries better deal with economic shocks. Using a mix of empirical and modeling approaches, the note finds that growth-enhancing reforms to labor and product market regulations, tailored to country-specific circumstances, would help individual euro area economies weather adverse shocks. Higher-quality insolvency regimes are associated with more efficient factor reallocation following a shock. The note also finds that structural and cyclical policies interact. Greater rigidities make economies more fragile, putting a higher burden on fiscal policy. This is especially true for members of a monetary union. Countries should build fiscal space in good times and tackle rigidities, reducing their need for countercyclical policies in bad times while making countercyclical policies more effective when deployed.

Structural Reforms In Emu And Te Role Of Monetary Policy

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Author : Nadine Leiner-Killinger
language : en
Publisher:
Release Date : 2007

Structural Reforms In Emu And Te Role Of Monetary Policy written by Nadine Leiner-Killinger and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.

The need for structural reforms in the euro area has often been advocated. These reforms would improve the welfare of euro area citizens and also, as a welcome side-effect, facilitate the conduct of monetary policy. Against this background, a particularly relevant question that can be posed is whether monetary policy should help implement structural reforms. The objective of this paper is to provide a review of the existing literature on structural reforms in Economic and Monetary Union (EMU) and to discuss the possible ways in which monetary policy could support the structural reform process. In the context of EMU, the main conclusions that emerge are that the monetary policy for the euro area is not the appropriate tool for mitigating the potential and uncertain short-term costs of reforms or for providing incentives for structural reforms at the national level. However, credible monetary policy aimed at price stability can improve the functioning of the supply side of the economy and contribute to an environment which is conducive to welfare-enhancing structural changes. In addition, the ECBs̕ contribution to the implementation of structural reforms takes the form of analysis, assessment and communication.

Structural Reforms For Growth And Cohesion

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Author : Ewald Nowotny
language : en
Publisher: Edward Elgar Publishing
Release Date : 2018-10-26

Structural Reforms For Growth And Cohesion written by Ewald Nowotny and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-10-26 with Business & Economics categories.

Effective and well-designed structural reforms are key to shaping Europe’s future in the context of the formidable challenges facing the continent today. This book examines the achievements and failures of past structural policies so that future ones can be adapted to address remaining and newly emerging challenges with greater success. Highlighting the social aspects and distributional effects of reforms that go beyond liberalization and deregulation, the book covers key issues facing future Europe, particularly those arising from technological innovation.

Lifting Euro Area Growth Priorities For Structural Reforms And Governance

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Author : Céline Allard
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2010-11-22

Lifting Euro Area Growth Priorities For Structural Reforms And Governance written by Céline Allard and has been published by INTERNATIONAL MONETARY FUND this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-11-22 with categories.

To live up to its growth potential and secure its inclusive social model, the euro area must make better use of its available labor. In the aftermath of the crisis, boosting growth is essential to prevent unemployment from becoming a long-term problem and to facilitate the return to fiscal sustainability. Labor utilization in the euro area has been lagging considerably behind its best performing peers. While fewer hours worked may, to some extent, reflect a social choice, higher unemployment rates and lower participation rates, on the other hand, cannot easily be attributed to individual preferences. Here, policies and institutions matter more. And there is little excuse for relatively low labor productivity, a particular bane in southern Europe and an increasing challenge everywhere. Kick-starting growth requires a comprehensive approach to labor and service market reforms. Different circumstances call for different approaches across countries. Countries in southern Europe need to focus on regaining competitiveness, while some in the core should promote higher labor force participation or more open service sector markets. Improving access to the labor market should be high on the priority list everywhere-including through some harmonization of key features of the labor market, which will help deal with intra-euro area imbalances. Differences in labor taxation, unemployment benefit systems, and employment protection will need to be reduced. Improving regulation and reforming taxes and social benefits will be essential to make inroads. For the longer term, focus should be on innovation, education, and on continuing financial sector reforms.

Structural Reforms And External Rebalancing In The Euro Area

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Author : Lukas Vogel
language : en
Publisher:
Release Date : 2011

Structural Reforms And External Rebalancing In The Euro Area written by Lukas Vogel and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with Debts, External categories.

"Economic research paper on EMU and open economy macroeconomics. The paper uses a 3-region version (small open economy in EMU, other euro area, rest of the world) of QUEST to assess the impact of structural reforms on external positions along two dimensions, namely the impact of flexibility and prudence on the prevention of imbalances and the contribution of structural reforms to their correction. With regard to imbalance prevention, the impact of nominal price/wage flexibility above current levels on the reaction of external positions to bubble/demand shocks is modest and case-dependent; prudent collateral valuation mitigates overborrowing risks. Product market reform, wage moderation and fiscal consolidation can support/accelerate the correction of imbalances as they increase price competitiveness and improve trade/current account balances in the short and medium term (here, up to 5-6 years). Lasting structural reforms bring permanent trade competitiveness gains. The initial improvement of external balances narrows in the long run, however, because growth-enhancing reforms also raise import demand when income rises in the longer term. EMU-wide reforms affect balances with the rest of the world, but do not reduce disparities between EMU member states.."--Publication information page.

Euro Area Policies

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Author : International Monetary Fund. European Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2017-07-25

Euro Area Policies written by International Monetary Fund. European Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-25 with Business & Economics categories.

This paper focuses on the convergence performance of euro area countries before and after euro introduction. The analysis compares per capita incomes across countries, both for the initial group of twelve countries that adopted the euro before 2002 (the so-called EA-12) as well as the current group of 19 euro area members (EA-19). The convergence process has stalled since the introduction of the euro, except for new euro area members which reduced their income gaps vis-à-vis the founding members until their adoption of the common currency. The convergence of income levels is not a prerequisite for a functioning monetary union, but has been considered an important objective of the European economic integration process. Lagging productivity growth in countries with lower initial GDP per capita is found to be the main explanation for the lack of convergence, suggesting that structural reforms can help to restart the convergence process.

Imperative Of Economic Growth In The Eurozone Competitiveness Capital Flows And Structural Reforms

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Author : Lubor Lacina
language : en
Publisher: Vernon Press
Release Date : 2018-01-15

Imperative Of Economic Growth In The Eurozone Competitiveness Capital Flows And Structural Reforms written by Lubor Lacina and has been published by Vernon Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-01-15 with Business & Economics categories.

European economic recovery appears to be taking hold. So is the European crisis over? The acute phase of the crisis passed, however a number of medium and long term issues remain. The policies of “internal devaluations” are working, albeit slowly, to restore competitiveness in the countries most affected by the crisis. However, growth remains at best sluggish. The medium and long term outlook remains highly uncertain, fomenting social tensions and endangering political stability. The restoration of economic dynamism is increasingly perceived as the answer to the question of the “European” future – economically, politically and socially. There is a broad consensus that dynamic structural reforms and the restoration of competitiveness at the level of the global economy are key answers to current European challenges. However, whatever the form these may take, the transfer of resources is implicit (and seemingly necessary), to underpin the current structure of eurozone. This indeed raises the question of governance – both fiscal and monetary. After all, the provision of resources implies an allocation – and it is hard to imagine that resources will be provided to the common pool unless the providers have some say with respect to allocation. And that requires some form of common (i.e. centralized) decision-making procedures, in all likelihood exceeding the common understanding of the acquis communautaire as it exists today – i.e. some form of the effective political arrangement. In this context, the basic idea which connects all contributions in this volume is the analysis of the problems which affected the Eurozone in the past decade and the challenges and dilemmas the Eurozone will face in the coming years.

Better Policies Euro Area Economic Challenges And Policy Recommendations

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Author : OECD
language : en
Publisher: OECD Publishing
Release Date : 2014-02-14

Better Policies Euro Area Economic Challenges And Policy Recommendations written by OECD and has been published by OECD Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-02-14 with categories.

This book provides an overview of the key challenges currently faced in the Euro Area and OECD's main policy recommendations to address them.