At the same time, the level of employment protection legislation for permanent contracts has only fallen slightly since 1990. It is therefore important to reform regulation on regular contracts where it has adverse effects on hiring incentives.
13 Generally, with the ageing of the European populations, employment gains in combination with ambitious and effective structural reforms in the pension and health care sectors are the only way to render social systems sustainable in an increasingly global economy. Implementing this necessarily non-exhaustive list of structural policy priorities should increase the euro area’s overall flexibility in an increasingly globalised world.