Reforming Western Europe  While reforms in eastern Europe were perceived as “opportunities”, western Europe likes to discuss upcoming reforms in terms of losses. The west European countries, especially the three large countries, are in dire need of radical reforms. Strained public finances, persistent unemployment and ageing populations are putting the welfare state in its present form under pressure.
I want to take this opportunity to discuss some implications of this increased uncertainty for the conduct of monetary policy. Before starting, let me remind you that these views are personal and do not necessarily reflect the views of other members of the FOMC or the Board of Governors.