Contents of the volume

2020, Volume 73 - Issue 3

ISSN: 2499-8265
RSS feed citation: At RePEc
Publication date: 17 August 2020

HOW TO REFORM THE EU AND THE EMU

Nicola Acocella

Read the article

STRUCTURAL REFORMS IN THE EUROPEAN UNION: WHAT IS NEW AFTER THE CRISIS?

Luciano Marcello Milone

Read the article

EXCHANGE RATE VOLATILITY AND ITS IMPACT ON CHINA'S TRADE WITH THE UNITED STATES

Kamal Upadhyaya, Rabindra BHANDARI, Franklin G. JR. MIXON

Read the article

ASYMMETRIC PANEL CAUSALITY TESTS WITH AN APPLICATION TO THE IMPACT OF FISCAL POLICY ON ECONOMIC PERFORMANCE IN SCANDINAVIA

Abdulnasser Hatemi-J

Read the article

REAL ESTATE MARKET AND MACROECONOMIC FACTORS IN KUWAIT: AN ARDL APPROACH

Sadeq Abul, Ahmad M. AL-KANDARI

Read the article

Genoa Chamber of Commerce
Economia Internazionale / International Economics

< Back

Corresponding author

Luciano Marcello MILONE, University La Sapienza, Department of Economics and Law, Rome, Italy

Structural Reforms in the European Union: What is New after the Crisis?

Pages

351-372

Abstract

This study analyses how individual countries in the European Union have to react to the recent global crisis by significantly changing their policy priorities, in different ways and to a different extent, in order to implement a plan of structural reforms aiming at effectively relaunching their process of economic growth in the new post-crisis scenario. The paper argues that three factors turn out to be particularly relevant: (i) vulnerabilities in public finance, especially in a number of Eurozone countries; (ii) the tendency towards widespread and growing  income inequalities threatening social cohesion and negatively affecting long-term economic growth; (iii) the persisting cyclical weakness of certain important areas of the European Union.

JEL classification

G01, O40, O52, P11

Keywords

Financial Crisis, Growth, Europe, Structural Reforms

Index

  1. Introduction
  2. Structural reforms, macroeconomic stability and sustainability of the public finances in the years of the global crisis
  3. The crisis may have altered individual countries’ new reform priorities
  4. Some caveats
  5. Conclusions

Bibliography

Acocella, N. (2020), The Eurozone at a Crossroads: How to Reform its Institutions and Policies, Cambridge University Press: Cambridge, forthcoming.

Agnello, L., V. Castro, J.T. Jalles and R.M. Sousa (2015), “What Determines the Likelihood of Structural Reforms”, European Journal of Political Economy, 37: 129-145.

Alcidi, C., A. Belke, A. Giovannini and D. Gros (2016), “Macroeconomic Adjustment Programmes in the Euro Area: an Overall Assessment”, International Economics and Economic Policy, 13(3), 345-358.

Anderson, D., B. Barkbu, L. Lusinyan and D. Muir (2014), Assessing the Gains from Structural Reforms for Jobs and Growth, Chap 7, in: M. Schindler, H. Berger, B.B. Bakker, A. Spilimbergo (Eds), “Jobs and Growth: Supporting the European Recovery”, International Monetary Fund: Washington DC, pp. 151-172.

Auerbach, A. and Y. Gorodnichenko (2012), Fiscal Multipliers in Recession and Expansion, in: A. Alesina, F. Giavazzi (Eds), “Fiscal Policy after the Financial Crisis”, University of Chicago Press: Chicago, pp. 63-98.

Baas, T. and A. Belke (2014), “Labour Market Reforms and Current Account Imbalances: Beggar-thy-neighbour Policies in a Currency Union?”, CEPS Working Document No. 399.

Ball, L., D. Furceri, D. Leigh and P. Loungani (2013), “The Distributional Effects of Fiscal Consolidation”, IMF Working Paper No. 13/151.

Banerji, A., V. Crispolti, E. Dabla-Norris, R.A. Duval, C.H. Ebeke, D. Furceri, T. Komatsuzaki and T. Poghosyan (2017), “Labor and Product Market Reforms in Advanced Economies: Fiscal Costs, Gains, and Support”, IMF Staff Discussion Note SDN/17/03, March.

Barkbu, B., J. Rahman and R. Valdés (2012), “Fostering Growth in Europe Now”, IMF Staff Discussion Note SDN/12/07, 18 June.

Belke, A. and D. Gros (2017), “Optimal Adjustment Paths in a Monetary Union”, Economic Modelling, 67: 338-345.

Berg, A., J.D. Ostry, C. Tsangarides and Y. Yakhshilikos (2018), “Redistribution, Inequality, and Growth: New Evidence”, Journal of Economic Growth, 23(3), 259-305.

Blanchard, O., R. Dornbusch, J. Drèze, H. Giersch, R. Layard and M. Monti (1985), “Employment and Growth in Europe: A Two-Handed Approach. Report of the CEPS Macroeconomic Policy Group”, Economic Papers No. 36.

Blanchard, O. and F. Giavazzi (2003), “Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets”, Quarterly Journal of Economics, 118(3), 879-907.

Blanchard, O. and D. Leigh (2013), “Growth Forecast Errors and Fiscal Multipliers”, IMF Working Paper No. 13/1.

Boeri, T., J.I. Conde-Ruiz and V. Galasso (2012), “The Political Economy of Flexicurity”, Journal of the European Economic Association, 10(4), 684-715.

Boeri, T. and P. Garibaldi (2011), Le riforme a costo zero. Dieci proposte per tornare a crescere, Chiarelettere Editore srl: Milano.

Bourguignon, F. (2018), “World Changes in Inequality: An Overview of Facts, Causes, Consequences and Policies”, CESIfo Economic Studies, 64(3), 345-370.

Buti, M., W. Röger and A. Turrini (2009), “Is Lisbon Far from Maastricht? Trade-offs and Complementarities between Fiscal Discipline and Structural Reforms”, CESifo Economic Studies, 55(1), 165-16.

Cacciatore, M., R. Duval and G. Fiori (2012), “Short-Term Gain or Pain? A DSGE Model-Based Analysis of the Short-Term Effects of Structural Reforms in Labour and Product Markets”, OECD Economics Department Working Papers No. 948.

Causa, O., M. Hermansen and N. Ruiz (2016), “The Distributional Impact of Structural Reforms”, OECD Economics Department Working Papers No. 1342.

Cheptea, C., J. Guajardo, I. Halikias, E. Jurzik, H. Lin, L. Lusinyan and A. Spilimbergo (2014), What do Past Reforms Tell us about Fostering Job Creation in Western Europe?, in: M. Schindler, H. Berger, B.B. Bakker, A. Spilimbergo (Eds), “Jobs and Growth: Supporting the European Recovery”, International Monetary Fund: Washington DC, pp. 97-124.

Cingano, F. (2014), “Trends in Income Inequality and its Impact on Economic Growth”, OECD Social, Employment and Migration Working Papers No. 163.

Cournède, B., P. Garda, P. Hoeller and V. Ziemann (2015a), “Effects of Pro-Growth Policies and on the Economic Stability of Firms, Workers and Households”, OECD Economic Policy Papers No. 12.

Cournède, B., P. Garda and V. Ziemann (2015b), “Effects of Economic Policies on Microeconomic Stability”, OECD Economics Department Working Papers No. 1201.

De Grauwe, P. and Y. Ji (2014), “How much Fiscal Discipline in a Monetary Union?”, Journal of Macroeconomics, 39, 348-360.

De Grauwe, P. and Y. Ji (2015), “Correcting for the Eurozone Design Failures: The Role of the ECB”, Journal of European Integration, 37(7), 739-754.

Decressin, J., R. Espinoza, I. Halikias, M. Kumhof, D. Leigh, P. Loungani, P. Medas, S. Mursula, A. Spilimbergo and T. Xu (2015), “Wage Moderation in Crises; Policy Considerations and Applications to the Euro Area”, IMF Staff Discussion Note SDN/15/22, November.

Draghi, M. (2014), “Unemployment in the Euro Area”, Speech by Mario Draghi, President of the ECB, Annual Central Bank Symposium in Jackson Hole, 22 August.

Drazen, A. and W. Easterly (2001), “Do Crises Induce Reform? Simple Empirical Tests of Conventional Wisdom”, Economics and Politics, 13(2), 129-157.

Eggertsson, G., A. Ferrero and A. Raffo (2014), “Can Structural Reforms Help Europe?”, Journal of Monetary Economics, 61, 2-22.

Estevão, M. (2005), “Product Market Regulation and the Benefits of Wage Moderation”, IMF Working Paper No. 05/191.

European Commission (2010), EUROPE 2020 –A Strategy for Smart, Sustainable and Inclusive Growth, COM(2010) 2020 Final, 3 March, European Commission: Brussels.

European Commission (2012), “Facts and Figures on State Aid in the EU Member States – 2012 Update”, Commission Staff Working Paper, SEC(2012) 443 final, 21 December.

Everaert, L. and W. Schule (2008), “Why it Pays to Synchronize Structural Reforms in the Euro Area Across Markets and Countries”, IMF Staff Papers, 55(2), 356-366.

Featherstone, K. (2015), “External Conditionality and the Debt Crisis: the ‘Troika’ and Public Administration Reform in Greece”, Journal of European Public Policy, 22(3), 295-314.

Fiori, G., G. Nicoletti, S. Scarpetta and F. Schiantarelli (2012), “Employment Effects of Product and Labour Market Reforms: Are There Synergies?”, Economic Journal, 122(558), F79-F104.

Furceri, C. and P. Loungani (2015), “Capital Account Liberalization and Inequality”, IMF Working Paper No. 15/243.

Galasso, V. (2014), “The Role of Political Partisanship During Economic Crises”, Public Choice, 158(1-2), 143-165.

Gomes, S., P. Jacquinot, M. Mohr and M. Pisani (2013), “Structural Reforms and Macroeconomic Performance in the Euro Area Countries: A Model-Based Assessment”, International Finance, 16(1), 23-44.

Gros, D. (2016), “Structural Reforms as a Panacea? The European Productivity and Growth Puzzle”, Intereconomics, 51(6), 318-320.

Heyes, J. (2013), “Flexicurity in Crisis: European Labour Market Policies in a Time of Austerity”, European Journal of Industrial Relations, 19(1), 71-86.

IMF (2004), World Economic Outlook, April, InternationalMonetary Fund: Washington, DC.

IMF (2016), World Economic Outlook, April, InternationalMonetary Fund: Washington, DC.

Lora, E. and M. Oliveira (2004), “What Makes Reforms Likely: Political Economy Determinants of Reforms in Latin America”, Journal of Applied Economics, 7(1), 99-135.

Milone, L.M. (2017), “The Difficult Path of Structural Reforms in the European Union”, Economia & lavoro, 51(3), 163-172.

Nicoletti, G. and S. Scarpetta (2005), “Product Market Reforms and Employment in the OECD Countries”, OECD Economics Department Working Papers  No. 472.

OECD (2007), Economic Policy Reforms: Going for Growth, OECD Publications: Paris.

OECD (2009), The Political Economy of Reform, OECD Publications: Paris.

OECD (2011), Divided We Stand. Why Inequality Keeps Rising, OECD Publications: Paris.

OECD (2012), Economic Policy Reforms: Going for Growth, OECD Publications: Paris.

OECD (2013a), Crisis Squeezes Income and Puts Pressure on Inequality and Poverty, OECD Publications: Paris.

OECD (2013b), Economic Policy Reforms: Going for Growth, OECD Publications: Paris.

OECD (2015a), In it Together. Why Less Inequality Benefits All, OECD Publications: Paris.

OECD (2015b), Economic Policy Reforms: Going for Growth, OECD Publications: Paris.

Ostry, J. D., A. Berg and S. Kothari (2018), “Growth-Equity Trade-offs in Structural Reforms”, IMF Working Paper No. 18/5.

Ostry, J.D., A. Berg and C.G. Tsangarides (2014), “Redistribution, Inequality, and Growth”, IMF Staff Discussion Note SDN/14/02.

Paulus, A., F. Figari and H. Sutherland (2017), “The Design of Fiscal Consolidation Measures in the European Union: Distributional Effects and Implications for Macro-economic Recovery”, Oxford Economic Papers, 69(3), 632-654.

Rodrik, D. (1996), “Understanding Economic Policy Reform”, Journal of Economic Literature, 34(1), 9-41.

Sestito, P. and R. Torrini (2012), “Europa 2020 e riforme nazionali: governance economica e riforme strutturali”, Bank of Italy, Questioni di Economia e Finanza (Occasional Papers) No. 124.

Tangian, A. (2010), “Not for Bad Weather: Flexicurity Challenged by the Crisis”, ETUI Policy Brief Issue No. 3.

UNCTAD (2012), Trade and Development Report 2012, United Nations: New York and Geneva.

Zemanek, H., A. Belke and G. Schnabl (2010), “Current Account Balances and Structural Adjustment in the Euro Area”, International Economics and Economic Policy, 7(1), 83-127.