Reports   Abroad

6/10/2016

OECD, Economic Surveys of the European Union and of the Euro Area

"Although growth has gradually strengthened, unemployment in many countries is still high, investment remains below pre-crisis levels in most European countries, and credit growth is still sluggish"

The latest OECD Economic Surveys of the European Union and of the Euro Area has been presented. 

The Surveys say that; the European economy is gradually recovering but further policy action will be required to address unresolved legacies of the global economic crisis that are weighing on growth and major new concerns that have emerged. Although growth has gradually strengthened, unemployment in many countries is still high, investment remains below pre-crisis levels in most European countries, and credit growth is still sluggish.

The Surveys project EU GDP will grow by 1.8% this year and 1.9% in 2017, while GDP in the euro area will grow by 1.6% this year and 1.7% in 2017.

OECD Secretary-General Angel Gurría:

OECD Secretary-General Angel Gurria said, "Cooperative solutions have enabled Europe to leave the worst of the crisis behind it. But continued cooperation is still needed to implement effective solutions to common problems. The alternative to collective action is not the status quo, but something worse: the risk that Europe will move backwards. This would jeopardise what has been achieved to date by the Single Market and the rest of the EU acquis, decreasing growth and destroying jobs across Europe.” 

"Growth must be supported, tools need to be implemented to increase employment":

The Surveys say that "countries with fiscal space should use budgetary spending to boost growth. Given the deep cuts in public investment since the global financial crisis, the reports recommend increasing public support for key investment projects. Enacting broad reforms to tax structures and public spending would also favour growth.

Easing financial constraints would bring benefits across the economy, notably to private sector firms considering future investment plans. This will require addressing one of the legacies of the crisis - the resolution of non-performing loans in many countries, which threaten financial stability and act as a drag on bank credit. 

The Surveys discuss the need for additional steps to deepen the single European market, notably with regard to labour mobility, which can be a key tool to reduce unemployment and boost productivity. Reducing administrative and regulatory barriers in the services sector and speeding up the recognition of professional qualifications from one country to another would encourage internal mobility, the Surveys said.

The OECD addresses a number of downside risks facing the European economy, most immediately that posed by a possible United Kingdom vote to leave the EU.