Europe’s growth conundrum


The gap in productivity and economic performance between the US and Europe has been a source of much debate in recent years, but many experts seem agreed on one point: that a lack of progress on reform in labour and product markets has not helped the European cause.
This is a constant refrain of the OECD’s Going for Growth series (see page 25), and Structural Reform in Europe was also the theme of a one-day high-level conference jointly organised by the OECD and the IMF in Paris in March. Dominique Strauss-Kahn, managing director of the IMF, was a keynote speaker alongside Angel Gurría, secretary-general of the OECD. Other speakers included Joaquín Almunia from the European Commission, and Sweden’s employment minister, Sven Otto Littorin. The following is a short extract from Mr Strauss- Kahn’s speech.“This may seem like a strange time to be holding a conference on structural reform. We are in the middle of a financial crisis, which will have significant economic implications for many countries, so it seems that we have more urgent problems to address.But actually, it’s a good time to talk about structural reform, because it has an important bearing on what Europe will be like when it emerges from the financial crisis, and because mobilising public support for reform is vital to the success of the European model.I have said before that the European model is based on the desire to found a world of justice built on the irreducibility of human dignity. The model requires: that we take human rights seriously; that we focus on culture as a means of human development; that we achieve a balance between economic prosperity, social justice and the environment; and that we promote multilateralism.The key question is whether structural reforms—the kind of reforms that Angel Gurría has talked about—are consistent with this model. I believe that they are mostly consistent with the European model, and with European values; moreover they can provide important support for them, for two reasons.First, because all of the values that we hold will become easier to achieve in an environment of economic growth. Angel [Gurría] has explained very clearly the ways in which structural reforms can help Europe to compete successfully in world markets and to produce high growth. Second, structural reforms can help to create new opportunities for European citizens, which again supports European values. People—especially young people— don’t just want to be protected against failure; they also want the opportunity to be successful. […]We see the benefits of these reforms clearly. But we must also recognise that people are hesitant about structural reform. Policymakers cannot dictate to people on this; they need to persuade people. […]Finally, as we go forward, let us keep our eyes on the prize. The European model is the product of many years of passionate endeavour by the citizens of Europe. It is worth an equal expenditure of passion and effort to sustain it. The model is not static: European governments and institutions must learn from the world and adapt to changes in the world—as their citizens are already doing. But there is also much that Europe can give to the world if we hold fast to the principles of justice and human dignity, and if we approach our reforms with these values always in our minds.”Mr Strauss-Kahn’s full speech can be read at more information, contact the OECD Economics Department at also article “Counting the hours”.©OECD Observer No 266 March 2008

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Subscribe now

<b>Subscribe now!</b>

To order your own paper editions,email

Online edition
Previous editions

Don't miss

  • MCM logo
  • The following communiqué and Chair’s statement were issued at the close of the OECD Council Meeting at Ministerial level, this year presided by the Slovak Republic.
  • Food production will suffer some of the most immediate and brutal effects of climate change, with some regions of the world suffering far more than others. Only through unhindered global trade can we ensure that high-quality, nutritious food reaches those who need it most, Angel Gurría, Secretary-General of the OECD, and José Graziano da Silva, Director-General of the United Nations Food and Agriculture Organization, write in their latest Project Syndicate article. Read the article here.
  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2019