Building a Better Union: Incentivizing Structural Reforms in the Euro Area

By Angana Banerji, Bergljot B Barkbu, James A John, Tidiane Kinda, Sergejs Saksonovs, Hanni Schoelermann, Tao Wu

September 11, 2015

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Angana Banerji, Bergljot B Barkbu, James A John, Tidiane Kinda, Sergejs Saksonovs, Hanni Schoelermann, and Tao Wu. Building a Better Union: Incentivizing Structural Reforms in the Euro Area, (USA: International Monetary Fund, 2015) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Economic integration, EU governance framework, Fiscal policy, Labor, Labor taxes, Macrostructural analysis, Monetary unions, Structural reforms, Taxes

Keywords: EU country, EU governance framework, EU governance reform, EU institution, EU legislation, EU Policy coordination, Europe, European economic governance, European Union, Global, Labor taxes, Monetary unions, Single market, Structural reform, Structural reforms, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/201
Stock No:

WPIEA2015201
ISBN:

9781513517087
ISSN:

1018-5941

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