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.
The options and solutions being adopted are highly controversial, and unless accompanied by appropriate actions, could carry moral hazard and loss of tax payer’s money. In the context of Pakistan, the diagnosis is different.