This would considerably reduce the cost of adjustment and the time it takes. The OECD and other organisations have for years been promoting a long list of reforms. These aim at making labour markets more flexible, opening up product markets and making the public sector more efficient.
A number of reforms have already been announced and, in some instances, implemented in countries such as Portugal, Spain and Italy. And we are already seeing some promising results, especially in Ireland. But despite these first steps, there is still a long way to go.