An interesting heat map from Moody’s covering the deteriorating pace of reforms in the euro area:
The key point is that under the monetary easing created by the ECB, Euro area sovereigns are all slacking off on reforms, especially more politically difficult reforms, such as product markets reforms (9 out of 11 states are in red, none in green), pensions & healthcare reforms and fiscal reforms (5 out of 11 are in read). The best performing countries are, bizarrely, Spain and Italy. Farcically, Ireland apparently does not require reforms to improve efficiency of public administration. Presumably, Moody’s analysts never heard of tsunami of public waste unleashed by the likes of HSE and Irish Water.
Take it for what it is – a sketchy top-level view of the reforms landscape and give it a wonder: are ECB policies helping long term sustainability of European institutions or harming it?.. In 23 out of 60 point observations, the reforms have delivered so far ‘no or limited progress’ and only in 6 out of 60 point observations, the reforms have delivered ‘substantial progress’. Go figure…
This post was published at True Economics on May 27, 2016.