Structural reforms

All measures to adapt an economy to changing conditions in its own country and, related to this, in terms of competitiveness on the world market. In the first place, this involves – the product markets and – the labor market (here above all through retirement plans, training measures, effective job placement, flexible wage setting, easing of dismissal protection). However, there is often also a need for – reorganization of the vocational training system, – expansion of the traffic network and telecommunications sector, and – better promotion of innovation and technology. If all this does not happen continuously, but is delayed, the external value of the currency deteriorates. The country slides more or less quickly into national bankruptcy. – In a common currency area such as the euro area, a member unwilling to reform can plunge all other participants into crisis. It is therefore perfectly justified for reform-averse EMU participants to be urged by peer pressure to reduce macroeconomic imbalances. –
See alignment automatism, bail-out, blame game, blackmail potential, EuroBonds, European Debt Agency, European Monetary Union, fundamental error, European Stability Mechanism, EMU explosive, financial stability, gold sacrifice, Grexit, peer pressure, fiscal consolidation, Ireland crisis, neuro, policy clamp, policy delay, blowback effect, debt club, debt drug, debt sustainability, semester, European, solidarity, financial, sovereign debt pressure, Stability and Growth Pact, fundamental error, fiscal framework, transfer union, constitutional article one, rigidities, structural, debt-productivity linkage, treaty compliance, growth-debt fact, historical. – Cf. Deutsche Bundesbank Monthly Report of January 2014, pp. 21 ff. (detailed account of the effects of missed structural reforms among EMU members; many overviews), ECB Monthly Report of July 2014, pp. 63 ff. (short-term and long-term effects of structural reforms, transmission effects; references; overviews).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/