Designing future-oriented structural policies for Europe

(, Vienna)

OeNB conference explores structural reform strategies for CESEE and Europe at large

How should we improve economic structures to ensure inclusive and sustainable growth in the European Union (EU), Ewald Nowotny, Governor of the Oesterreichische Nationalbank (OeNB), asked when opening the Conference on European Economic Integration (CEEI) on November 20, 2017. The two-day CEEI 2017 explores strategies to facilitate Europe’s return to balanced growth and convergence, while also revisiting the transition experience of Central, Eastern and Southeastern European (CESEE) countries.

Yet, in line with a modern-day appraisal, the CEEI host emphasized that structural policies are key to stimulating growth, ensuring monetary transmission and helping create fiscal space.

In Nowotny’s view, “institutional reform of Economic and Monetary Union is crucial for the euro area.” In the same vein, the European Commission has raised the idea to provide financial incentives for structural reforms. And structural convergence among EU Member States – in particular in the CESEE region – is well underway.

During the transition process, many CESEE countries followed the advice of institutions that favored a shock therapy as opposed to a gradual approach more in line with the European social model. Some of the reforms may have gone too far, according to Nowotny, which might explain why we have recently seen some policy reversals.

So, what does it take to design future-oriented structural reforms? “Comprehensive packaging of reforms is needed to reap the benefits intended. Ideally, reforms should also make public administration more efficient and include a supportive macroeconomic policy mix,” Governor Nowotny summarized.

These and other issues are being discussed at the CEEI 2017 on Monday, November 20, and Tuesday, November 21, 2017, by high-ranking representatives of other European central banks, commercial banks as well as speakers from international organizations, financial institutions and academia.