Economic policy is driven by the desire to maintain the currency board with a view to adopting the euro as soon as possible. Fiscal policy has therefore been strongly pro-cyclical in an effort to ensure qualification for euro-area entry. The new labour law, relaxing employment protection legislation, should facilitate the reallocation of workers to more productive jobs, provided adequate activation measures for the unemployed are implemented.
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©OECD Observer No 274, July 2009