To counter all this, monetary policy in the euro area has put the pedal to the metal. It has lowered interest rates into negative territory, and it has embarked on large-scale asset purchases for most sovereign bonds. But while monetary policy has certainly provided a boost, growth is generally considered to be only moderate. So, what is needed to return to cruise speed?
Can we overhaul the engine for better performance? Does it make sense to top up the tyres with air? Should we try to eliminate the fiscal downforce? Or should monetary policy try to push the needle even closer towards the rev limiter? In the next 20 minutes, I will explore these options in turn, starting with the engine overhaul, that is, with structural reforms.