Structural reforms with a view to increasing flexibility in labour, product and services markets are the key to solving Europe’s single most pressing economic problem. If undertaken promptly, such reforms would be the best way for the euro area to make the most of its potential for growth and employment.
Another main challenge for Europe at the present juncture remains that of consolidating fiscal policy. Several Member States are not yet meeting the medium-term budgetary objectives of being in surplus or close to balance. This is the objective to which all governments in the European Union have committed themselves through a Stability and Growth Pact.