In general, policies to foster a sufficient degree of competition in the labour, goods, services and capital markets, to create a business-friendly environment for investment and innovation and a high degree of wage and price flexibility need to be given priority in the agenda of the national policy makers.
These reforms would  BIS Review 94/2006  3  help to encourage better allocation of resources, improving the efficiency of investment decisions as well as increasing productivity and real GDP growth. Let me stress, in conclusion, that the European Central Bank backs the drive towards reforms that is in motion in Europe.