the reform wave of the countries hardest hit by the crisis is showing some initial results, such as a gdp recovery related to comprehensive labour market reforms. other reforms, mainly on product markets, are expected to bring about gdp gains, but they need to be implemented in full. see ecb, “ progress with structural reforms across the euro area and their possible impacts ”, economic bulletin, issue 2 / 2015. bis central bankers ’ speeches however, since 2013, very low financing costs for sovereigns and rising share prices have eased the pressure to implement more difficult policies 2. by definition, for structural policies to be most effective, a long - term commitment, continuous implementation and strong reform ownership are needed. this is the only way to permanently change expectations and growth prospects. this leads me to our second, more concrete, question : which structural reforms are still needed to support stronger and sustainable growth? to start with, let me stress that all euro area countries, albeit to different degrees, still need to implement structural reforms. there are a number of credible reforms that are able to increase permanently total factor productivity ; to affect confidence ; and to help reduce uncertainty and increase investment and sustainable demand. in particular, for the euro area i see the need to forcefully work on : 1. reducing red tape – by easing licensing procedures and facilitating access to credit by viable firms ; 2. improving the judicial systems – including the effectiveness of insolvency regimes ; 3. increasing the efficiency of the public administration and tax systems ; 4. reducing entry barriers in sectors sheltered from competition ; and 5. reducing hiring costs and skill mismatch. these reforms would unlock immediately “ hidden ” demand, increase economic resilience and facilitate the working of monetary policy. among these reforms i believe that particular attention needs to be given to all legal, administrative and bureaucratic impediments that can lead to an increase of the overall costs for debt workouts, make the distinction between viable and non - viable firms more difficult, and hamper firms ’ exit from and entry to markets as well as investment. in concrete terms, this means improving the efficiency of insolvency regimes. in corporate debt restructuring, experience to date shows that an effective insolvency regime is critical to facilitate the early rescue of viable firms and the speedy exit of non - viable ones. imf analysis also shows that weak debt enforcement and ineffective insolvency frameworks tend to lower the recovery values of problem loans 3. our internal analysis finds that

sabine lautenschlager : fostering global growth speech by ms sabine lautenschlager, member of the executive board of the european central bank, at the panel during the g30 international banking seminar, lima, 11 october 2015. * * * i would like to thank jacob and jean - claude for inviting me to participate in this panel. you will not be surprised that i will focus on the growth challenge faced by the euro area countries in my intervention. let me stress from the outset that i believe that the euro area can make a much stronger contribution to global growth than it has done so far. but for this to happen, we need a stronger reform impetus in many euro area countries. to substantiate this claim, i would like to address two questions : first, where do we stand on growth and reforms in the euro area? and second, which structural reforms are still needed to support stronger and sustainable growth? where do we stand on growth and reforms in the euro area? growth has been recovering in the euro area, albeit at a modest pace. output growth has been gathering pace throughout 2014 and in the first half of 2015 and employment has been increasing. however, developments are still uneven across member countries and it is not clear that the recovery can be sustained in the medium term. our main concern is that across euro area countries domestic vulnerabilities are still very large, which implies a limited ability to withstand adverse external shocks and to kick start a new phase of sustainable growth. the vulnerabilities of many euro area countries are related to the high stock of debt, both public and private, and to a number of structural rigidities and institutional bottlenecks that prevent an optimal allocation of resources across factors of production, and thus limit total factor productivity growth. the current environment not only urgently calls for the implementation of structural reforms, but also provides the right conditions for their implementation. with our monetary policy, the ecb is greatly contributing to an environment favourable to implementing structural reforms : our accommodative monetary policy stance helps countries to gain time, time to implement the necessary measures to increase resilience and thus support sustainable growth. however, there is only a limited role for demand - side policies. fiscal space is limited and monetary policy cannot carry the burden of the adjustment alone. for the euro area to become more resilient and sustain stronger growth, national governments need to bring about further structural change 1. work in this regard has already started, and