Slow growth, high uncertainty and rising levels of inequality should prompt policy makers to take urgent action to achieve stronger, sustainable and more inclusive growth, according to the OECD’s annual Going for Growth report.
Going for Growth 2019 points out that the weakening of growth comes at a time when globalisation, digitalisation, population ageing and environmental degradation are key forces shaping economic developments. To better manage these megatrends, governments must carefully select, prepare, prioritise and implement country-specific structural reforms that boost long-term growth, improve competitiveness and productivity, create jobs and ensure a cleaner environment and equal opportunities for all.
This year’s edition presents the top structural reform priorities in 46 OECD and non-OECD economies, alongside assessment of progress countries have made on key reforms in the past years. It points to a disappointing pace of reforms in 2017-2018, finding little sign of an imminent pick-up from the already modest pace of reform observed in the previous two years.
“As growth is slowing down, and new technologies are rapidly transforming our economies, it is urgent to pursue reform efforts to boost inclusive and sustainable growth,” said OECD Secretary-General Angel Gurría, launching the report in the run-up to the 17-18 July meeting of G7 finance ministers in Chantilly, France. “Going for Growth points policymakers where to focus their efforts to boost growth, enhance the equality of opportunities and inclusiveness and improve environmental sustainability. Our key recommendation extends beyond the G7, to all OECD and key non-member economies: the time for reform is now, for better lives today and for future generations!”
French Minister of Economy and Finance Bruno Le Maire, host of this year’s G7 finance ministers meeting, added: “Ensuring strong, inclusive and sustainable growth is a challenge for all G7 countries. In France, we take this very seriously, as evidenced by the labour market, education and tax reforms adopted by our government in recent years to improve competitiveness and transform the economy in the face of ecological and digital transitions. On behalf of the Government, I am pleased that OECD’s Going for Growth recognises our efforts. And we will continue to pursue reforms and invest in innovation, which is the key to tomorrow’s growth.”
Going for Growth 2019 points out that reform priorities to boost inclusive growth differ across countries. A common feature is that many of them can make the opportunities for succeeding in life more equal across workers and firms.
Education is the most common reform priority across countries and it is crucial to make sure current and future generations find quality employment and lead more productive careers. Addressing the pertinent issue of labour market segmentation and improving the conditions for labour market inclusion of women, migrants, minorities and older workers are also crucial so everyone can benefit from growth.
Shifting taxation from income to property would boost growth, particularly in advanced economies. Better public sector efficiency, rule of law and adequate, accessible infrastructure provision are equally important to save resources, access markets and create conditions for businesses to invest in innovation, in particular – but not only – in emerging-market economies.
Finally, reforms to boost competition in markets for goods and services are often difficult. But opening up markets to entry, competition and foreign trade and investment is essential for innovation, the diffusion of digital technologies and ultimately productivity growth and social inclusion. Such reforms remain among the most frequent Going for Growth priorities.
Among the highlights in this year’s report is an increased focus on reforms to make growth environmentally sustainable. Recognising the major challenges that still exist for addressing pollution, climate change and environmental sustainability, the report suggests countries make better use of environmental taxation, phase out agricultural subsidies and environmentally harmful tax breaks, and take additional steps to reduce emissions from transport, including more investment in better and low-emission public transport.
The main conclusions, as well as individual country notes on G20 countries, are accessible at: http://www.oecd.org/economy/going-for-growth/. You are invited to include this link in stories on the launch.
Compliments of the OECD

Greece has now entered a period of economic growth that puts it among the top performers in the eurozone. It must now persevere with efforts to address crisis legacies and pursue needed reforms to ensure continued success, says the IMF in its recent assessment of the country’s economy.
As the IMF concludes its latest assessment on the state of the Greek economy, IMF Country Focus sat down with Peter Dohlman, IMF mission chief for Greece, to discuss the report’s findings, key recommendations, and the IMF’s relationship with Greece.
What is the current status of Greece’s relationship with the IMF?
Greece no longer has a borrowing arrangement with the IMF. Instead, our relationship with Greece is centered on two formal consultations each year covering core macroeconomic and financial sector issues. As you know, we hold annual Article IV consultations with all our members, where they undergo “economic health checks,” and in the case of Greece, this took place last July. In addition, Greece is covered by what is known as Post-Program Monitoring, where we hold a second annual discussion with countries that have large outstanding loans from the IMF. Greece currently owes about SDR7.7 billion (€9.4 billion) to the IMF, making it the third largest borrower after Argentina and Ukraine.
How has the economy performed of late, and what is your assessment of future performance?
There are a lot of positive developments to point to. We expect growth to accelerate to nearly 2½ percent this year from around 2 percent in 2018. This puts Greece in the upper tier of the eurozone growth table. Unemployment is coming down, though is still unacceptably high, especially for young people. The government is meeting its ambitious fiscal targets agreed with European member states, though not without some cost to growth. Market access has been re-established with two successful government bond issuances this year.
We also see normalization in other areas. For example, customers are now free to move their cash to any bank in Greece, and the banks themselves have almost fully repaid emergency liquidity assistance provided by the European Central Bank. Over the medium term, we expect growth to gradually moderate as the economy reaches full employment.
What are some of the vulnerabilities and risks facing Greece’s economy?
Despite its hard-earned economic stability, Greece remains a country confronted by elevated vulnerabilities and weak payment discipline. This is reflected, for example, in the very high nonperforming loan ratios in the banks and elevated levels of private- and public-sector debt and arrears.
On the domestic side, there are risks from election year pressures on policies—such as to increase wages—as well as possible fatigue after years of cost cutting and reform efforts. The necessary adjustment away from the unsustainable policies that led to the crisis has imposed a heavy cost, despite efforts to protect the most vulnerable through targeted support—such as the guaranteed minimum income scheme. We also see fiscal risks from various court cases now underway that are challenging key government policies. Recent labor market policy decisions, notably the sharp hike in the minimum wage and renewed collective bargaining arrangements, help boost incomes but also increase costs and reduce firms’ abilities to respond to changing market conditions, which in turn pose risks to employment and competitiveness.
On the external side, we see risks from a potential tightening of global financial conditions or a further slowdown in growth in the EU or emerging markets.
How can Greece address these challenges and keep the economy on track?
In our report, we focus on three policy areas.
First, we are recommending policies to enhance labor market flexibility and boost productivity and competitiveness. This means that Greece should find ways to help employers more easily adjust to changing market conditions and maintain customers through addressing the rigidities in labor markets, but also through policies to help reduce nonwage costs for firms—such as lowering the tax burden and financing costs. Relatedly, product market reforms aimed at improving product choice, quality, and competition continue to lag in Greece. A renewed reform push in this area would also help support higher employment and growth.
Second, Greece can do more to support growth and social inclusion by improving the fiscal policy mix. For example, through the planned broadening of the personal income tax next year and stronger tax compliance, Greece can lower tax rates and still boost revenues to increase investment and targeted social spending. Further efforts are needed to upgrade and modernize the system of social protection, which would also facilitate ongoing efforts to improve competitiveness. In addition, we are recommending that the government prepare a contingency plan in the event large fiscal risks materialize.
Third, we are urging the government to do more to fix banks, which remain crippled by past-due loans. This will help households and businesses to once again be able to borrow at reasonable interest rates. Together, these policies can spur more growth and strengthen the resilience of the Greek economy to future shocks.
We will pick up on these issues again during the 2019 Article IV mission, scheduled to take place this summer.
Read the report HERE
Compliments of the International Monetary Fund

Migration represents challenges and opportunities for Europe. Learn how the EU deals with refugee movements and asylum.

The unprecedented arrival of refugees and irregular migrants in the EU, which peaked in 2015, required an EU response on a number of levels. Firstly, policies to handle regular and irregular immigration, and secondly, common EU-wide rules on asylum. The migrant influx also resulted in a need for additional measures and reforms to ensure border security as well as a fairer distribution of asylum seekers among EU countries.

The migration issue
In recent years, Europe has had to respond to the most severe migratory challenge since World War II. In 2015, 1.25 million first-time asylum applicants were registered in the EU; by 2018, this figure had dropped to 581,000 applicants. In 2018, 116,647 people reached Europe by sea, compared to more than one million in 2015. In 2018, the total number of illegal border-crossings into the EU dropped to 150,114, its lowest level in five years and 92% below the peak of the migratory crisis in 2015.
While migration flows have subsided, the crisis has exposed shortcomings in the European asylum system. Parliament has sought to combat this by reforming EU asylum rules as well as strengthening EU border controls.
Read our articles about the migrant crisis in Europe and EU measures to manage migration.

 
European immigration policy
The immigration policy at European level deals both with legal and irregular immigration.  Regarding regular immigration, the EU decides on conditions for legal entry and residence. Member states keep the right to rule on admission volumes for people coming from non-EU countries to seek work.
The European Union tackles also irregular immigration, especially through a return policy that respects fundamental rights. With regards to integration, there is no harmonisation of national legislations. However, the EU can play a supporting role, especially financially.
The European Parliament is actively involved, in the adoption of new laws on irregular and regular immigration. It is a full co-legislator together with the Council representing member states on these matters since the entry into force of the Lisbon Treaty in 2009.
For greater details please read the fact sheet on the EU’s immigration policy.

European Asylum policy
Since 1999, the EU has been working to create a Common European Asylum System (CEAS). For the common system to work, it must have:
consistent rules for granting refugee status across all member states
a mechanism for determining which member state is responsible for considering an asylum application
standards on reception conditions
partnerships and cooperation with non-EU countries
With the Lisbon Treaty the European Parliament decides on an equal footing with the Council of the EU on asylum-related legislation.
Check out our fact sheet on the EU asylum policy for more information.
Compliments of the European Parliament

Sabine Weyand, EU’s new Director-General for Trade, gives an update on EU-US trade and shares her insights on why the EU has been so busy striking new trade agreements in our latest EU Now podcast. 
Find the podcast HERE

Today, July 25, marks the first anniversary of the Joint Statement by President Juncker and President Trump, which launched the new phase in the relationship between the United States and the European Union.
As a first step, the Presidents set up an Executive Working Group, co-chaired by Commissioner for Trade Cecilia Malmström and her counterpart US Trade Representative Robert Lighthizer, to work on the different tracks for cooperation identified in the Joint Statement.
One year on, a series of concrete actions have been achieved, taking the trillion-dollar transatlantic trade relationship to the next level.A report on the implementation of the EU-U.S. Joint Statement of 25 July 2018 was published today, providing an overview of the progress made and illustrating the depth of the engagement between EU and U.S. over the past year, both at political and technical level.
On this occasion, the President of the European Commission, Jean-Claude Juncker said: “The European Union is delivering on what President Trump and I agreed on this day last year. We want a win-win situation on trade, which is beneficial for both the European Union and the United States. Having one of the most important economic relationships in the world, we want to continue strengthening trade between us based on the positive spirit of last July.”
Since July 2018, the EU has significantly increased its imports of liquefied natural gas (LNG) from the U.S. by over 367%. So far, in 2019, one third of all U.S. LNG exports have gone to the EU. The U.S. is the EU’s third largest supplier of LNG, while the EU has emerged as the primary destination of U.S. LNG exports.
EU imports of U.S. soya beans increased by almost 100% from July 2018 to June 2019, compared to the same period the previous year. The United States is now Europe’s number one soya beans supplier and has been able to expand its market further, following the decision by the European Commission on 29 January 2019, to authorise the use of U.S. soya beans for biofuels.
Following the Council’s mandate of 15 April 2019 to open talks with the U.S. for a horizontal agreement on conformity assessment, there have already been three rounds of constructive discussions on regulatory cooperation. An EU-U.S. agreement would allow exporters from a wide range of sectors to get certification of their products in their own country (as opposed to, for example, sending samples to the export destination).
The Council gave the Commission the authorisation to open talks with the U.S. on eliminating tariffs on industrial goods. While it was not yet possible to launch negotiations in this area due to diverging objectives on the two sides, the EU remains ready to engage with the U.S. along the lines agreed between the two Presidents in July 2018.
Regarding cooperation on standards, the EU presented its ideas on a deeper cooperation in strategic sectors, in particular those related to emerging technologies, such as 3D printing, robotics and connected vehicles. Important progress has been made in the areas of pharmaceuticals, medical devices and cybersecurity. Onpharmaceuticals, the EU and U.S. reached a milestone on 11 July 2019, as all EU Member State authorities were recognised under the Mutual Recognition Agreement (MRA) on good manufacturing practices for human medicines. This has already resulted in cutting of costs for businesses and freeing up administrative resources, by avoiding the duplication of inspections.
The EU and U.S. have engaged to identify and address distortions caused by unfair market-distorting trade practices. Together with Japan, both partners have submitted a joint proposal in the World Trade Organization (WTO) to enhance Members’ compliance with transparency requirements. The trilateral EU-U.S.-Japan process is also expected to lead to proposals for new rules on industrial subsidies and State Owned Enterprises.
In addition, a recent example that illustrates the excellent cooperation fostered in the spirit of the July 2018 Joint Statement, is the agreement found on the share of a duty-free tariff rate quota for U.S.exports ofhormone-free beef to the EU market.
The EU continues to make the case for ending U.S.tariffs on steel and aluminiumcomingfromthe EU, which would also benefit the U.S., since Americanproducers would be able to source these materials more cheaply from the EU. The EU could then also remove the rebalancing tariffsonU.S.exports.
Background
The United States and the European Union have a $1 trillion bilateral trade relationship with more than €3 billion in two-way trade every single day. Together both sides count more than 830 million citizens and close to 50% of global Gross Domestic Product. This is the largest economic relationship in the world.
With their Joint Statement of 25 July 2018, President Juncker and President Trump expressed their commitment to further strengthen this trade relationship to the benefit of all American and European citizens.
More Information
EU-U.S. joint statement of July 2018
Progress Report on the implementation of the EU-U.S. Joint Statement of 25 July 2018
Compliments of the European Commission

Justin Trudeau, Prime Minister of Canada and Donald Tusk, President of the European Council, met in Montreal on 17-18 July 2019 for the 17th Canada-European Union Summit. They issued the following statement:

The partnership between Canada and the European Union (EU) is deep and lasting, with its roots in shared values, a long history of close cooperation, and strong people-to-people ties.
The Canada-EU Strategic Partnership Agreement (SPA) and the Comprehensive Economic and Trade Agreement (CETA) reflect our shared commitment to addressing global challenges in a manner that benefits our citizens, upholds our values, and strengthens the rules-based international order. 
We will further deepen our cooperation to deliver economic growth that benefits everyone, combat climate change and protect the environment, advance international peace and security, promote gender equality and women’s empowerment and foster innovation.

Full text of the 17th EU-Canada summit joint declaration 
Compliments of the European Council 

By Yuanyan Sophia Zhang |  International Monetary Fund
Wage rises have remained stubbornly low in advanced Europe in recent years, but, at the same time, newer EU members are experiencing rapid wage acceleration.
This paper investigates the drivers of this wage divergence. Econometric analysis using error correction models suggests that wage growth responds more quickly to changes in unemployment in the newer EU members than in advanced Europe, where wages are more closely related to inflation and inflation expectations in the short run, implying greater inertia in nominal wage rises in advanced Europe. In the years after the global crisis, this inertia contributed to the build up of a real wage overhang relative to sharply slowing labor productivity, which subsequently dragged on nominal wage rises even as unemployment began to decline. Spillovers of subdued wage growth between euro area countries also weighed on wage rises in advanced Europe.
Download the paper HERE
Compliments of the IMF

Governments worldwide provide more than USD 500 billion in often ineffective and trade distorting support to farmers each year, and efforts to reform these policies have largely stalled, according to a new OECD report.
Agricultural Policy Monitoring and Evaluation 2019 shows that farm policies in the 53 countries studied in the report – all OECD and EU countries, plus 12 key emerging economies – provided on average USD 528 billion (EUR 465 billion) per-year of direct support to farmers during the 2016-18 period. At the same time, countries that implicitly taxed farmers through artificially depressed prices reduced farm revenues by USD 83 billion (EUR 73 billion) per-year.
The OECD finds that little progress has been seen this decade in reforming agricultural support policies. Many agricultural policies continue to distort farm production and trade decisions and do not effectively target stated government objectives.
‌The report shows that 54% of support is provided through policies that artificially maintain domestic farm prices above international levels. This type of support harms consumers – especially poor consumers – while increasing the income gap between small and large farms and reducing the competitiveness of the food industry.
Relatively little of the current policy mix in most countries targets agricultural productivity growth and the sustainable use of land, water and biodiversity resources. The report also highlights large variations in support for different commodities, both within and across countries. This can result in significant price support for some products, while others are artificially depressed, and contributes to distortions in international markets.
“Governments can support farm households and rural communities without negative effects on global markets,” said OECD Director for Trade and Agriculture Ken Ash. “By removing the link between support and farm production decisions, and investing instead in needed public services, governments can build an enabling environment in which farmers have the freedom to make business decisions in response to evolving market opportunities at home and abroad. At the same time farm policy should be better targeted, improving access to technologies that will drive both productivity growth and sustainable resource use,” Mr Ash said.
The annual Agricultural Policy Monitoring and Evaluation report provides up-to-date estimates of government support to agriculture for all OECD and the European Union as a whole, plus key emerging economies. The 2019 edition includes Brazil, People’s Republic of China, Colombia, Costa Rica, Kazakhstan, the Philippines, the Russian Federation, South Africa, Ukraine, Viet Nam, and for the first time, both India and Argentina.
Download the report HERE.
Compliments of the OECD

The European Commission has opened a formal antitrust investigation to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.
Commissioner Margrethe Vestager, in charge of competition policy, said: “European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”
Amazon has a dual role as a platform: (i) it sells products on its website as a retailer; and (ii) it provides a marketplace where independent sellers can sell products directly to consumers.
When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. Based on the Commission’s preliminary fact-finding, Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace.
As part of its in-depth investigation the Commission will look into:
the standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyse and use third party seller data. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
the role of data in the selection of the winners of the “Buy Box” andthe impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. The “Buy Box” is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it.
If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
 
Background
Article 101 of the TFEU prohibits anticompetitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s Single Market. Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.
Article 11(6) of the Antitrust Regulation provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions that would conflict with a decision contemplated by the Commission in proceedings it has initiated.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened proceedings in this case.
There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
More information on the investigation will be available on the Commission’s competition website, in the public case register under case number AT.40462.
Compliments of the European Commission

By John Bruton, former Irish Prime Minister (Taoiseach)
The fact that Dail Eireann voted yesterday to reject an EU Trade and Investment deal with Mercosur, that took 20 years to negotiate, and that few members could have read,  shows that Irish politics is not immune to the Brexit disease that has infected British politics. 
This disease consists in thinking that there is no need to make concessions in international relations and that, instead, one “can have it all”, without paying any price.
This delusion has led the UK into a deeply destructive position on Brexit.
I will not go into the details of the Mercosur trade deal here. Commissioner Phil Hogan dealt with these in an interview he gave to Sean O Rourke on RTE 1.  
The Dail vote showed a poor understanding of the importance of trade agreements to the very existence of the EU.
The EU is not a military power. It is a commercial power. That commercial power is exercised through agreements through which the EU can promote its values, and can protect the commercial and strategic interests of its member states, including smaller ones like Ireland.
 In recent times, the EU has made Agreements with Canada and Ukraine, and both had great difficulty being ratified, because one or two national parliaments took a similar line on them to the one taken on Mercosur by Dail Eireann yesterday.
If the EU cannot make and ratify Trade Agreements, it will gradually wither away, and member states will be forced  to find other ways of protecting their national interests. 
That might work for big states like France and Germany. But it will not work well for smaller states. The members of Dail Eireann should keep that in mind when they next come to consider the Mercosur deal.
Compliments of John Bruton