Economy and labor markets in Europe

Structural reforms need more time than stimulus packages or consolidation measures to unfold their full impact on the economy. Nonetheless, the time needed for structural reforms to show initial successes is tolerable. In particular, the labor market reforms carried out in Germany in 2003 and 2005 demonstrated that, fairly soon after implementation, a recovery on the labor market emerged in 2006. In Spain and Portugal the reform process was launched around two years ago, in Italy around one year ago. It is therefore not rash to expect positive effects to become visible next year or the year after next, assuming implementation makes further headway.