Tuesday, June 3, 2025 at 09:00-10:30 Vienna time (CEST) 

Opening remarks
Prof. Dr. Robert Holzmann, Governor, Oesterreichische Nationalbank

Moderator
Stephan Danninger, Assistant Director, International Monetary Fund

Speakers
Diego Cerdeiro, Deputy Unit Chief, International Monetary Fund
Julia Wörz, Head of CESEE Section, Oesterreichische Nationalbank

Europe's per capita income gap with the United States is due to deficiencies in labor utilization, capital intensity, and total factor productivity. While deeper intra-Europe integration has a key role to play in closing these gaps, complementary policy action at the national level is also critical. Governor Holzmann, in his opening remarks, noted that measuring accurately the gaps is challenging and shared his views on the required ingredients for successful reform design and implementation. 

Diego Cerdeiro’s presentation showcased findings from an in-depth analysis by IMF staff of domestic structural reform priorities in Europe. Ranking these reforms by their urgency for lifting growth, the key priorities include improving labor markets, building human capital, and implementing growth-friendly fiscal-structural reforms. Priorities differ across the continent. Advanced European countries should focus on deregulating product markets, deepening credit and capital markets, and promoting innovation. For CESEE countries, to participate in growth gains, top priorities are strengthening their largest domestic asset—skilled labor—, removal of red tape, and in many case governance reforms. While addressing these domestic reform priorities will require overcoming long-standing political economy and—in some cases—technical obstacles to reform, the presentation showed that successful implementation could entail sizeable medium-term gains of around 5, 7 and 9 percent for advanced European, Central Eastern and Southeastern European, and Western Balkan economies, respectively.

In the discussion, Julia Woerz (OeNB) noted that the motivation for Europe’s economic reform agenda must look beyond headline GDP per capita comparisons with the US, recognizing the limitations of such metrics across structurally diverse economies and the importance of broader objectives, including social and environmental outcomes. Ms. Woerz commended the IMF study for its detailed, country-specific benchmarking and comprehensive approach to identifying reform needs, particularly highlighting the foundational role of good governance, rule of law, and institutional quality. Labor market flexibility emerges as a critical challenge, requiring both domestic and EU-level action, while fiscal and capital market reforms—especially those enabling innovation and supporting SMEs—are identified as key to boosting productivity and competitiveness. Ms. Woerz also stressed the untapped potential of green transition policies, the need for reforms to foster business dynamism and market exit, and the transformative impact of EU accession.

Hervé Joly, Director (JVI)