Economics: Euro area recovering but major reforms needed to restore stability

The euro area is now recovering from a severe recession, but the build-up of large economic, fiscal and financial imbalances demands a coherent and forward-looking reform agenda, according to a new OECD report.

The OECD’s latest Economic Survey of the Euro Area, presented today in Brussels by OECD Deputy Secretary-General and Chief Economist Pier Carlo Padoan, confirms that a moderate recovery is underway.

The OECD forecasts annual economic growth of 1.5% to 2% over the coming two years.

To put the euro area on a more robust footing, the OECD recommends that governments:

• improve fiscal discipline through reform of euro area budget rules and the creation of national fiscal councils;
• upgrade financial regulation;
• implement comprehensive labour and product reforms to boost growth and competitiveness.

In the current climate of uncertainty surrounding euro area sovereign debt, implementation of these reforms by European authorities would contribute to restoring stabilty.

A Policy Brief with the main conclusions and Mr. Padoan’s presentation in Brussels will be freely accessible in pdf format (in English and French) on the OECD’s website. You are invited to include this internet link in reports on the survey.

News source: OECD link: article