Structural Reforms and Growth Potential in the European Union
DSc, University Professor, Institute Director, University of Pannonia, Veszprém, Head of Department, National University of Public Service, Budapest
Published in: Public Finance Quarterly 2015/4 (p. 510-525.)
SUMMARY: Following the onset of the financial and economic crisis, the latent and gradual decline of growth potential in the European Union turned into an overt growth crisis. However, this crisis can also exert a cleansing effect and release resources for activities of higher efficiency. A core element of the strategy focusing on a turnaround to growth – by means of structural reforms designed to improve the functioning of the market and strengthen the growth potential – lies in boosting a faster increase in productivity. Concurrently with more efficient resource utilisation, the principal objective is to raise the employment rate in a sustainable fashion. Underlying as a central factor the structural reforms supporting the growth potential is the need for a better functioning internal market and an improved business environment. All this requires profound reforms in product and service markets as well as resource markets, primarily the labour market and money market. Reforms promoting knowledge and innovation are closely connected with this and are of the same significance.
KEYWORDS: macroeconomic policy, economic growth in open economies, macroeconomic questions of the monetary union, macroeconomic analysis of economic development, institutions and growth
JOURNAL OF ECONOMIC LITERATURE (JEL) KÓD: E60, F43, F45, O11, O43