Euro Area Policies

The steady recovery and political developments provide an opportune moment for advancing much-needed reforms to strengthen the architecture of the Economic and Monetary Union. Pro-EU political parties have gained momentum, while strong private consumption and supportive policies have boosted growth. Unemployment is falling amid solid job creation, although it remains elevated in some countries. Productivity growth has been lagging in some countries, leading convergence across countries to stall and competitiveness gaps to persist. While the recovery has been resilient to shocks so far, risks remain and continued monetary policy support is required.