The magnitude of such effects after the pandemic is unclear (see IMF (2021), “After-Effects of the COVID-19 Pandemic: Prospects for Medium-Term Economic Damage”, World Economic Outlook – Managing Divergent Recoveries, April). However, the recovery from the global financial crisis should serve as a cautionary tale.
It is, therefore, crucial that, at a minimum, the measures announced in the national reform programmes are implemented in a timely and comprehensive manner. European Monetary Union may have increased the economic incentives for implementing such reforms as differences in cost and price levels between euro area countries have become more visible.