* . *
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Sunday, July 27, 2025
Earth-News
  • Home
  • Business
  • Entertainment
    Top 5 entertainment news: Sandeep Reddy Vanga regrets trimming Animal’s runtime by 7-8 minutes, Akshay Ku – Times of India

    Top 5 Entertainment Highlights: Sandeep Reddy Vanga Reveals Why He Trimmed Animal’s Runtime by 7-8 Minutes, Plus Akshay Ku Updates

    Cote de Pablo reveals how Michael Weatherly used his soap opera roots to put her at ease in “NCIS” love scene – yahoo.com

    Cote de Pablo Reveals How Michael Weatherly’s Soap Opera Background Made Their “NCIS” Love Scene Easier

    City of Pelham announces entertainment district plans for former Oak Mountain Amphitheatre site – WVTM

    Pelham Unveils Exciting New Entertainment District Plans for Former Oak Mountain Amphitheatre Site

    Black Box Players presents ‘The Three Musketeers’ – CBS 19 News

    Experience the Adventure: Black Box Players Bring ‘The Three Musketeers’ to Life!

    AP Entertainment SummaryBrief at 1:51 p.m. EDT – Channel 3000

    Entertainment Highlights: Key Updates You Can’t Miss

    ‘Devil Wears Prada 2’ casts Anne Hathaway’s love interest replacing Adrian Grenier’s Nate – Entertainment Weekly

    Devil Wears Prada 2′ Casts New Love Interest for Anne Hathaway, Replacing Adrian Grenier’s Nate

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology

    Eagle Unveils Revolutionary X-Ray Technology at Pack Expo

    Validea’s Top Information Technology Stocks Based On Peter Lynch – 7/25/2025 – Nasdaq

    Validea’s Top Information Technology Stocks Based On Peter Lynch – 7/25/2025 – Nasdaq

    WhoFi: New surveillance technology can track people by how they disrupt Wi-Fi signals – Tech Xplore

    WhoFi: New surveillance technology can track people by how they disrupt Wi-Fi signals – Tech Xplore

    Google Cloud Announced as a Key Technology Partner for Odoo Connect 2025 in San Francisco – GlobeNewswire

    Google Cloud Announced as a Key Technology Partner for Odoo Connect 2025 in San Francisco – GlobeNewswire

    Behind the Screens: The Impact of Technology on Real Estate – TRREB

    Behind the Screens: How Technology is Transforming the Future of Real Estate

    Sustainserv and Palau Announce Technology Partnership to Leverage Innovative AI Platform to Advance Sustainability Reporting – Business Wire

    Sustainserv and Palau Team Up to Transform Sustainability Reporting with Breakthrough AI Technology

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
  • Home
  • Business
  • Entertainment
    Top 5 entertainment news: Sandeep Reddy Vanga regrets trimming Animal’s runtime by 7-8 minutes, Akshay Ku – Times of India

    Top 5 Entertainment Highlights: Sandeep Reddy Vanga Reveals Why He Trimmed Animal’s Runtime by 7-8 Minutes, Plus Akshay Ku Updates

    Cote de Pablo reveals how Michael Weatherly used his soap opera roots to put her at ease in “NCIS” love scene – yahoo.com

    Cote de Pablo Reveals How Michael Weatherly’s Soap Opera Background Made Their “NCIS” Love Scene Easier

    City of Pelham announces entertainment district plans for former Oak Mountain Amphitheatre site – WVTM

    Pelham Unveils Exciting New Entertainment District Plans for Former Oak Mountain Amphitheatre Site

    Black Box Players presents ‘The Three Musketeers’ – CBS 19 News

    Experience the Adventure: Black Box Players Bring ‘The Three Musketeers’ to Life!

    AP Entertainment SummaryBrief at 1:51 p.m. EDT – Channel 3000

    Entertainment Highlights: Key Updates You Can’t Miss

    ‘Devil Wears Prada 2’ casts Anne Hathaway’s love interest replacing Adrian Grenier’s Nate – Entertainment Weekly

    Devil Wears Prada 2′ Casts New Love Interest for Anne Hathaway, Replacing Adrian Grenier’s Nate

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology

    Eagle Unveils Revolutionary X-Ray Technology at Pack Expo

    Validea’s Top Information Technology Stocks Based On Peter Lynch – 7/25/2025 – Nasdaq

    Validea’s Top Information Technology Stocks Based On Peter Lynch – 7/25/2025 – Nasdaq

    WhoFi: New surveillance technology can track people by how they disrupt Wi-Fi signals – Tech Xplore

    WhoFi: New surveillance technology can track people by how they disrupt Wi-Fi signals – Tech Xplore

    Google Cloud Announced as a Key Technology Partner for Odoo Connect 2025 in San Francisco – GlobeNewswire

    Google Cloud Announced as a Key Technology Partner for Odoo Connect 2025 in San Francisco – GlobeNewswire

    Behind the Screens: The Impact of Technology on Real Estate – TRREB

    Behind the Screens: How Technology is Transforming the Future of Real Estate

    Sustainserv and Palau Announce Technology Partnership to Leverage Innovative AI Platform to Advance Sustainability Reporting – Business Wire

    Sustainserv and Palau Team Up to Transform Sustainability Reporting with Breakthrough AI Technology

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
Earth-News
No Result
View All Result
Home Business

The euro area needs better structural policies to support income, employment and fairness

October 11, 2023
in Business
The euro area needs better structural policies to support income, employment and fairness
Share on FacebookShare on Twitter

11 October 2023

By Klaus Masuch, Wolfgang Modery, Ralph Setzer and Nico Zorell

The euro area economy has recovered swiftly from the pandemic, supply bottlenecks and the energy price shock. But there is no room for complacency. Structural weaknesses are still a brake on income and productivity growth. Governments need to implement reforms to make European economies stronger and promote social fairness.

The euro area economy has proven remarkably resilient over the past few years. In 2022, output and employment in many countries in the currency union exceeded pre-pandemic expectations, despite the major shocks in recent years (Chart 1). This robustness is in large part the result of decisive fiscal and monetary policies. Over the course of the pandemic, job retention schemes and sizeable national fiscal support helped to prevent a collapse of economic activity and employment. Other instruments at the European level, such as Next Generation EU[1], complemented these efforts.[2]

Close alignment between monetary and fiscal policies in response to the pandemic yielded an unexpectedly strong recovery. This in turn contributed to the rise in inflation. In the second half of 2021, inflation started to overshoot the ECB’s 2% target, reaching a peak of 10.6% in October 2022.

To fight inflation, the ECB first discontinued its net asset purchases during the first half of 2022, and has since then swiftly increased its main policy rates. Monetary policy shifted from easing to tightening and therefore no longer has a supportive effect on short-term growth.

Expansionary fiscal policies are coming to an end, too. Reducing deficits and bringing debt levels down are important, not only to improve debt sustainability and fiscal space in countries with high public debt, but also to lower medium-term inflationary pressures. Against this background, governments need to get their economies into better shape and enhance longer-term growth prospects.

Chart 1

Real GDP and employment rate in 2022 relative to pre-pandemic projections

(percentage point deviation from Eurosystem projection in December 2019)

Sources: Eurostat and Eurosystem.

Note: The chart shows the cumulative growth in real GDP (x-axis) and the change in the employment rate (y-axis) between 2019 and 2022 relative to the (pre-pandemic) Eurosystem projections in December 2019. As an example, in the case of Spain and over the three years from 2019 to 2022 output growth was some 6 percentage points and the change in the employment rate some 2 percentage points below the Eurosystem projections from December 2019. Ireland is excluded from the chart for readability.

Structural weaknesses reduce resilience

The strong economic recovery and the solid job markets in the wake of recent crises could lead policymakers to overestimate the resilience and growth potential of their economies. But there is no room for complacency. There are still many structural weaknesses in our economies: e.g. too much regulation that hinders the entry of new firms and job creation, not enough competition and insufficient incentives to innovate and invest. In several euro area countries productivity growth has been weak for decades.[3] Average annual labour productivity growth, measured as GDP per hour worked, has been only 0.8% in the euro area since 2001. That compares to an average of 1.3% in the United States and 1.1% across all OECD countries.[4] The risks to sustained growth have increased in many countries in the wake of the major supply shocks in recent years. And in the longer term, our economies face big structural challenges related to ageing, climate change, digitalisation and new geopolitical risks.

Public deficits went up significantly as governments spent substantial amounts to help people and businesses through the recent crises. Debt-to-GDP ratios remain above 2019 levels in many countries. This will burden citizens in the future – either via higher taxes or lower government spending – and limit the room for manoeuvre for fiscal policy, in particular if long-term growth remains weak. High public debt can also increase the exposure of banks to their sovereign. As banks tend to hold much more government debt of their own countries than of others, there is the risk of adverse feedback loops (Chart 2). If distrust about the creditworthiness of a sovereign emerges, risk premia tend to increase. This in turn might get banks into trouble – a phenomenon described as the “doom loop” during the euro sovereign debt crisis in 2010-13. In parallel to fiscal risks, macro-financial vulnerabilities have increased in other parts of the economy, most notably real estate markets.[5]

Chart 2

Bank credit to domestic sovereign

(x-axis: percent of GDP, y-axis: percent of bank CET1 capital)

Sources: Eurostat and ECB supervisory data (COREP and FINREP).

Note: CET1 refers to Common Equity Tier 1 capital. Consolidated data referring to Q4 2022.

Another consequence of the recent crises is large differences in inflation rates across euro area countries. In part, these reflect the extent to which countries are dependent on imported energy. For instance, cumulated inflation rate since January 2020 is 38% in Estonia, compared to 14% in Finland (Chart 3). Some inflation differentials are normal in a currency union. They can, for example, reflect temporary adjustments or different exposures to shocks. They can also be associated with a normal convergence of overall price levels across countries, as less-developed economies catch up to more-productive countries. But large cumulated inflation differentials may also reflect unsustainable relative cost and price developments. Experiences since the introduction of the euro show that large and persistent divergences of inflation and unit labour cost can lead to costly macroeconomic imbalances. In this case, national economic policies need to be adjusted. That’s why governments need to keep a close eye on losses in price competitiveness, which have been observed in several euro area countries over recent years.[6]

Chart 3

Cumulated increase in harmonised consumer prices between January 2020 and August 2023

(percent)

Source: Eurostat.

Improving framework conditions and the quality of institutions

Structural reforms should be a key priority, together with sound fiscal and macroprudential policies.[7] National governments have significant room to make their economies function better, and in particular to improve the institutions, rules and regulations that govern economic activities. One way to identify areas where improvements are needed the most is the World Bank’s Worldwide Governance Indicators (WGI) dataset. It summarises how companies, citizens and experts view the quality of governance. About half of euro area countries have seen a deterioration in their composite rank in the WGI over the last decade (Chart 4). No euro area country has seen any significant improvement since 2012, with the exception of the Baltics and Greece.

That is worrying, because better structural policies can help economies to grow faster and fairer.[8] Poorer people often suffer the most from inefficient public services, weak institutional quality (including corruption, a lack of transparency or rent-seeking in product markets) and rigid economic structures that keep unemployment high and real wages low. Policies that address such inefficiencies can put euro area economies on the path to greater prosperity and promote social fairness. For instance, reforms that strengthen the quality of education and incentivise firms to invest in employees’ qualifications lead to higher-quality jobs that pay more and reduce youth unemployment. Reforms that address structural rigidities and improve regulatory and administrative efficiency, e.g. via the use of modern digital technologies, would improve the quality of public services and could thus disproportionally benefit the more vulnerable part of the population. The Recovery and Resilience Plans prepared by euro area countries under Next Generation EU contain many detailed investments and useful reforms. But government commitments in the areas of labour and product markets or pension systems, for example, are often not ambitious enough.

Chart 4

Institutional quality in EU Member States

(score ranging from -250 to 250)

Source: World Bank Worldwide Governance Indicators.

Note. Scores reflect the average of the four measurable governance indicators: rule of law, regulatory quality, government effectiveness and control of corruption. Higher values indicate better governance. A score of 250 would reflect that a country is the global best performer in all four subcategories. Euro Area average in unchanged composition.

National efforts to enhance structural policies can be supported by European policies. Progress in deepening the Single Market, especially in the services sector, could give a boost to productivity. According to a European Parliament study, removing the remaining barriers to a fully functioning single market could bring total benefits of €713 billion by the end of 2029.[9] Moreover, a simplified EU regulatory framework would increase the attractiveness of the euro area for investors and innovative activities. The same is true for Banking Union and Capital Markets Union, which would strengthen the capacity of financial markets to bear, diversify and reduce risk.

Overall, enhanced structural policies and better institutional quality would have many interconnected benefits. They would increase the potential for growth, make debt more sustainable, help weaker euro area economies to catch up, reduce the risk of fragmentation and make the future shocks economically and socially less costly. Last but not least, this would support the smooth transmission of monetary policy to the whole euro area economy – and thereby help preserve price stability in the euro area.

The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.

Check out The ECB Blog and subscribe for future posts.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : European Central Bank – https://www.ecb.europa.eu//press/blog/date/2023/html/ecb.blog231011~b743839ce4.en.html

Tags: businessneedsStructural
Previous Post

Exxon Mobil buying buys Pioneer Natural in $59.5 billion deal with energy prices surging

Next Post

This Could Be an RSV Season Like No Other, in a Good Way

Clinch County Schools prepare for students’ return with new policies, technology – WALB

Clinch County Schools Prepare for Students’ Return with Exciting New Policies and Cutting-Edge Technology

July 27, 2025
Highlights: Xfinity Series at Indy on The CW – NBC Sports

Unforgettable Thrills Ignite the Xfinity Series at Indy

July 27, 2025
Yellowstone aspen showing signs of recovery following 1995 reintroduction of wolves to park – Oregon State University

Yellowstone Aspen Thriving Again Years After Wolves Were Reintroduced

July 26, 2025
CMC trustees approve new biological science bachelor’s degree – KUNC

CMC Trustees Approve Exciting New Bachelor’s Degree in Biological Sciences

July 26, 2025
By cutting science, the Defense Department is eating its seed corn – Defense News

Cutting Science Funding: How the Defense Department Is Jeopardizing Tomorrow’s Innovation

July 26, 2025
Opinion | Lifestyle Interventions Should Not be Replaced by GLP-1s – MedPage Today

Why Lifestyle Changes Must Stay the Cornerstone-Not GLP-1s

July 26, 2025
World’s most premature baby celebrates first birthday – The Guardian

World’s most premature baby celebrates first birthday – The Guardian

July 26, 2025
Idaho’s first geological engineering degree to power workforce, economy – Bonner County Daily Bee

Idaho Launches Its First Geological Engineering Degree to Boost Workforce and Drive Economic Growth

July 26, 2025
Top 5 entertainment news: Sandeep Reddy Vanga regrets trimming Animal’s runtime by 7-8 minutes, Akshay Ku – Times of India

Top 5 Entertainment Highlights: Sandeep Reddy Vanga Reveals Why He Trimmed Animal’s Runtime by 7-8 Minutes, Plus Akshay Ku Updates

July 26, 2025

How do the microplastics in our bodies affect our health? – BBC

July 26, 2025

Categories

Archives

July 2025
MTWTFSS
 123456
78910111213
14151617181920
21222324252627
28293031 
« Jun    
Earth-News.info

The Earth News is an independent English-language daily published Website from all around the World News

Browse by Category

  • Business (20,132)
  • Ecology (740)
  • Economy (764)
  • Entertainment (21,645)
  • General (16,124)
  • Health (9,802)
  • Lifestyle (772)
  • News (22,149)
  • People (766)
  • Politics (773)
  • Science (15,979)
  • Sports (21,262)
  • Technology (15,746)
  • World (747)

Recent News

Clinch County Schools prepare for students’ return with new policies, technology – WALB

Clinch County Schools Prepare for Students’ Return with Exciting New Policies and Cutting-Edge Technology

July 27, 2025
Highlights: Xfinity Series at Indy on The CW – NBC Sports

Unforgettable Thrills Ignite the Xfinity Series at Indy

July 27, 2025
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

Go to mobile version