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31. Economic Survey of Finland, 2004

Publication Date:
10-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The transformation of the Finnish economy over the last decade represents one of the few examples of the "new economy" taking hold in Europe. Output and productivity growth over the second half of the 1990s was among the highest in the OECD, and the recovery from the global downturn has been much stronger than for the euro area as a whole. However, imminent population ageing threatens to expose weaknesses in the labour market. Demographic developments, which over past decades have been broadly neutral, could reduce the growth rate of GDP per capita by 1/4 of a percentage point per annum over the remainder of this decade and by almost 1 percentage point over the next decade. This, combined with the likelihood of smaller productivity gains in the information and communication technology (ICT) sector, a continuation of falling ICT prices as well as the mediocre performance in the sheltered sectors, threatens the future growth of living standards. Within a decade, and in the absence of further policy changes, these developments together could imply that Finland not only loses its top performer status but could face a protracted period of slow growth, as illustrated in the following scenario.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe

32. Employment Protection: Costs and Benefits of Greater Job Security

Publication Date:
09-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Deregulating labour markets – for example making it easier for firms to hire and fire employees – is at the heart of the employment debate in many OECD countries. Laws on firing or layoffs and other employment protection regulations are thought by many to be a key factor in generating labour market "rigidity", as well as one reason for the large differences in labour market performance among OECD countries, notably between the United States and some of the larger European countries.
Topic:
Civil Society, Development, Economics, and Government
Political Geography:
Europe

33. Economic Survey of Portugal, 2004

Publication Date:
09-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Convergence of the Portuguese economy toward the more advanced OECD economies seems to have halted in recent years, leaving a significant gap in per capita incomes. The proximate cause is low labour productivity, as employment rates across the board are substantially higher than the EU average. Nor is there a shortage of capital goods in aggregate. But capital equipment in the business sector is not always efficiently used or allocated, and new technologies are not readily adopted. Furthermore, the Portuguese labour force – even its younger members – have had less formal education than workers in other EU countries, including among the new entrants from Central and Eastern Europe, and workers in Portugal also have less access to training than in many other countries. Traditional Portuguese low value-added highly labourintensive products now face increasing competition from developing countries and from the new EU entrants.
Topic:
Development, Economics, and Government
Political Geography:
Europe and Eastern Europe

34. Economic Survey of Germany, 2004

Publication Date:
08-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
With the effects of adverse external shocks diminishing, a strong and competitive export industry is helping the German economy out of a three-year period of near stagnation. Domestic demand has been declining over the last couple of years, as poor labour market performance has weighed on consumer sentiment and business confidence. The labour market still suffers from weak economic growth and distorted incentives, with both contributing to problems in taking up work and providing employment. Productivity growth is not high enough to compensate for the adverse effect of low labour utilization on economic growth. Fiscal targets have been missed on account of both cyclical and structural factors. The government has launched a major reform initiative to reinvigorate economic growth. These reforms are welcome, have to be continued and need to be broadened further to reduce government debt, remove fiscal distortions, and improve incentives to supply and demand labour. Furthermore, there remains considerable scope to foster the creation of new enterprises and widen product market competition, thereby also maintaining the strong innovative capacity of the economy. The major challenges are to link fiscal consolidation to public sector reform and to increase the capacity of the economy to create employment and increase productivity growth. To create confidence and to restore Germany's traditional economic strength it is necessary that reforms reflect a coherent vision about the reorientation of economic policy – combining a growth and stability oriented macroeconomic policy with structural reforms – and are implemented according to a transparent and predictable roadmap.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
Europe and Germany

35. Economic Survey of Poland, 2004

Publication Date:
06-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Poland has made impressive progress in the transformation of its economy and the accession to the European Union on 1st May 2004 marks another historical event. It follows 15 years of profound change and accomplishment. More than 75 per cent of GDP is now produced in the private sector, the economy is well integrated with those of western European nations and inflation has been brought down to low levels. After an initial fall, output has been growing continuously for more than 10 years and, on average, Poles are much better off now than they were then. However, the striking drop in employment since 1998 is suggestive of serious remaining problems. To address these, much more needs to be done, notably in terms of raising productivity, expanding employment and increasing per capita income, which is 41 per cent of OECD levels.
Topic:
Development and Economics
Political Geography:
Europe and Poland

36. Economic Survey of the Netherlands, 2004

Publication Date:
05-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The economic downturn in the Netherlands, like the boom that preceded it, has been more marked than in most other European countries. This is partly attributable to greater exposure to international trade, especially with the US, and to greater sensitivity to international stock price movements. But there are also some structural policies – pension fund regulation, housing and wage setting institutions – that have undermined economic efficiency and contributed to the amplitude of the cycle. Furthermore there has been a marked deterioration in public finances, part of which is structural. Longer term growth trends too are unfavourable. In view of these developments, the main challenges are to reform those policies that have reduced efficiency and increased volatility, put public finances on a sustainable path, and, most importantly, increase trend growth by increasing both employment and productivity.
Topic:
Agriculture, Economics, Environment, Human Rights, International Organization, and Political Economy
Political Geography:
Europe and Netherlands

37. Economic Survey of euro area, 2003

Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Entering its fifth year of existence, the European Economic and Monetary Union (EMU) has met major headwinds. At the advent of the single currency the euro area experienced solid economic growth, with unemployment falling and public finances rapidly improving. However, a number of structural problems were exposed with the cyclical downturn since 2001, from which the area is recovering only hesitantly. The challenges facing policy makers at present are both of a short-run and medium-run nature. Policy makers are currently grappling with sluggish demand. Responding to this challenge, monetary policy has been eased and fiscal policy reacted through the automatic stabilisers. However, the room for manoeuvre was reduced by lingering inflationary pressures and earlier insufficient fiscal adjustment in several member states. Meanwhile the euro exchange rate has appreciated significantly. Over the medium term, the Community has set ambitious targets and a vast programme for enhancing the performance of labour, product and financial markets. This programme needs to be pursued with vigour, thereby raising the odds of large gains in trend growth and jobs while making it easier to achieve sound fiscal positions.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Europe

38. Economic Survey of France, 2003

Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
After several years of rapid expansion, the French economy has entered into a period of below potential growth, with a negative output gap opening up. Monetary conditions have been relaxed, while fiscal policy has eased excessively, provoking the European Commission to initiate an excessive deficit procedure. As uncertainty dissipates towards the middle of this year, the economy should pick up speed, reaching a growth rhythm of around 2 per cent in 2004. Nevertheless, over the medium term, in the absence of substantial reforms the ageing of the population risks threatening economic and fiscal equilibrium. Current pension and healthcare reform initiatives and plans to redress spending over the medium term go in the right direction. However, in order to ensure medium and long-term fiscal sustainability, additional policies to slow the expansion of health and pension spending are required, while efforts to raise employment rates and potential output are needed to improve the economy's ability to finance future ageing-related expenditure. Here, programmes that offer the possibility of on-the-job training should be expanded so as to reactivate young and lowskilled workers, while reforms to early-retirement schemes and the pension system need to be continued so as to restore work incentives for older workers. Ongoing tax and labour market reforms and policies to facilitate the development of high-tech and fast growing enterprises, which should help promote investment and higher productivity growth, also need to be pursued. The opening of the capital of stateowned enterprises and their eventual privatisation, and planned improvements to governance structures should help promote growth, but revenues from sell-offs ought to be used to reduce debt. Finally, in order to better manage the totality of public expenditures, the authorities need to implement reforms that can be used to ensure that all spending organisms contribute to controlling spending. Here, it will be necessary to implement mechanisms that would improve the effectiveness of measures to control healthcare spending. Moreover, decision-makers need to be more directly confronted with the long-term consequences of their actions. Initiatives such as decentralisation and the new budget framework law should help in this regard. Pursuit of reforms along all of these lines should permit society to meet the fiscal challenge posed by population ageing, while retaining high levels of service.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Europe and France

39. Feasible Financing Strategies for Environmentally Related Infrastructure

Publication Date:
05-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
An important obstacle to achieving environmental goals in many countries has been the failure to adequately address the associated financial issues: the costs of achieving goals; how those costs could be minimised; and the challenge of matching costs with available resources. The need for a fresh approach has become evident as central European countries come to terms with mobilising substantial financial resources to comply with challenging EU environmental requirements, and as the countries of Eastern Europe, Caucasus and Central Asia (EECCA) struggle to maintain even the low levels of services currently delivered by environmentally-related infrastructure.
Topic:
Economics, Environment, and International Trade and Finance
Political Geography:
Europe, Central Asia, and Eastern Europe

40. Creation of the Euro Area: Implications for Economic Statistics

Author:
Paul Schreyer
Publication Date:
02-2002
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
A major event in early 2002 was the arrival of the euro banknotes and coins and the withdrawal of the existing twelve national currencies from circulation. The event has influenced every citizen in the euro area and is clearly a historic change. It heralds a new phase in forging an “ever closer union among the peoples of Europe”. In economic terms, however, the introduction in January 1999 of the single currency after determining the irrevocably fixed exchange rates of the national currencies with the euro was a more important event. It meant that decisions on monetary policy moved from national central banks to the Governing Council of the European Central Bank. This Statistics Brief highlights some of the consequences for economic statistics of the creation of the euro area.
Topic:
Economics and Political Economy
Political Geography:
Europe