Fourth, complementary action at the EU level would also seem to be necessary to ensure both an appropriate aggregate position and a large public investment programme – which is consistent with proposals by the incoming President of the European Commission. 16 Reforming structural policies No amount of fiscal or monetary accommodation, however, can compensate for the necessary structural reforms in the euro area.
As I said, structural unemployment was already estimated to be very high coming into the crisis (around 9%). Indeed, some research suggests it has been high since the 1970s. 17 And given the interactions I described, there are important reasons why national structural reforms that tackle this problem can no longer be delayed.