BIS Review 33/1999  4  Looking at the latest unemployment rates around the euro area – which range from 2.8% in Luxembourg (January 1999) and 3.6% in the Netherlands (December 1998) to 17.8% in Spain (January 1999) – suggests that policies must be developed at the national level.
What is needed appears to be national structural reforms to make sustainable reductions in unemployment rather than a boost to euro area aggregate demand. Moreover, making labour markets more flexible can also make it easier to cope with short-term imbalances in demand. However, the situation in euro area labour markets is not uniformly bad.