Economic Reforms in the Euro Area: Is There a Common Agenda? Bruegel Policy Contribution/November 2006, Issue 5

Debrun, Xavier and Pisani-Ferry, Jean. (2006) Economic Reforms in the Euro Area: Is There a Common Agenda? Bruegel Policy Contribution/November 2006, Issue 5. [Policy Paper]

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Abstract

Despite the recent growth revival, the state of the euro area economy remains vexingly disappointing. What is taking place is too little, too late and the very fact that output growth only started to pick up in the fourth year of the global recovery suggests that something must be wrong. Against this background, the overriding priority remains to design and implement policy packages aiming at: (i) Increasing potential output through higher employment, higher labour participation, and higher productivity; (ii) Ensuring that actual output does not lag behind gains in potential output. While several items on the reform agenda remain a matter for discussion, the overall direction and a large part of the concrete prescriptions increasingly command consensus among euro-area policymakers2. It is also widely recognised that this agenda leaves room for social choices that may differ from one country to another or from one political camp to another — say, as regards the respective roles of public and private initiatives or the balance between individual and collective responsibility.

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