Structural reforms and economic governance
Properly implementing structural reforms can have a significant positive effect on long-term growth. Analysis by the OECD suggests that “if countries were to move to best practice in product and labour market policy settings, aggregate output in the Euro-area could rise by more than 6% by 2025”. This would almost halve the per capita gap with the United States by 2030.
It will be crucial that we ensure that every euro of the national recovery and resilience plans is used effectively by Member States to leverage reform and higher long-term investment.
The European Council reached a political agreement in July 2020 to establish a €750 bn recovery plan dubbed "NextGenerationEU" to mitigate the impact of the COVID-19 crisis. Its largest component, the Recovery and Resilience Facility consists of €312.5 bn in grants and a €360 bn in loans. In order to access funding from the Recovery and Resilience Facility, Member States are required to put forward national recovery and resilience plans. The plans must describe how the money will be spent and must correspond to the requirements of the regulation establishing the facility.
According to our 2021 survey, the majority of member federations believe their countries’ national recovery and resilience plans will have at least a positive impact on long-term growth and job creation, but only 11% of member federations consider that this impact will be either large or very large.
