The International Monetary Fund (IMF) is calling on Europe to take action in order to close the gap between itself and the United States in terms of growth, productivity, and income. To do this, the organization recommends that Europe focus on promoting regional integration rather than engaging in a subsidy war.
According to the IMF, one of the major challenges facing Europe is low potential growth. New policies are needed to address declining productivity growth, an aging population, and lack of investment. To overcome these challenges and increase potential growth, the IMF suggests that Europe should focus on increasing labor force participation, preparing workers for structural changes, creating a conducive environment for private investment, and promoting innovation at a European level.
The IMF also believes that greater European integration would lead to untapped productivity gains and increased growth. By reducing internal barriers by 10%, GDP could increase by 7%. In order to achieve this goal, the organization recommends completing banking and capital markets unions, harmonizing tax and subsidy rules, improving insolvency regimes, reducing barriers to labor mobility and trade, and liberalizing services. The IMF also calls for more ambition in initiatives related to digital repositories, insolvency procedures, venture capital, portable pension products, and tax withholding.
The IMF acknowledges that these reforms will require political determination to overcome vested interests and address the costs of adjustment. However
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/elcomercio/USQRAVBPFBD4PLYURKSMCHLVSA.jpg)
