Accordingly, recent estimates1 by the European Commission suggest a medium-term growth potential (2014–23) for the euro area of only 1%. The potential gains from structural reforms therefore remain especially large. A study2 by economists from the OECD suggests that a comprehensive package of labour, product, tax and pension reforms could raise GDP per capita in the EU by about 11% after ten years.
For the US, the growth potential of structural reforms is 5%, less than half compared to the EU. And gains in Europe are by no means restricted to the peripheral countries. Ranked 111th in the World Bank Doing Business category “ease of starting a business”, for instance, Germany has ample room for improvement as well. To me, there can be no doubt.