address crisis legacies and macroeconomic imbalances. in addition, member states should improve their capacity to absorb shocks internally. building such a capacity implies removing rigidities in labour, product and services markets. this will support economic adjustment through price flexibility and facilitate a smooth and speedy reallocation of resources. price flexibility allows for the recovery of any loss in competitiveness, and fosters a faster adjustment of relative prices, which, in the absence of exchange rate adjustment, is crucial for the rapid reallocation of production resources to the most dynamic sectors and firms. according to a european commission study, price flexibility and the rapid reallocation of resources require wage flexibility, ease of market entry of new firms, an effective and efficient insolvency framework including a second chance for entrepreneurs, a friendly environment for doing business, a well - functioning justice system, low levels of corruption, the availability of high quality public services and public infrastructure, and a regulatory framework conducive to competition. such reforms, besides increasing the capacity of euro area economies to absorb shocks internally, increase productivity and long - term growth. furthermore, some structural reforms ( for example, cutting red tape ) raise expectations of future income, and thus boost confidence, investment and domestic demand in the short term, supporting the recovery. in addition, policies that raise labour force participation and reduce structural unemployment are essential to boost future growth and employment. these reforms effectively make markets more flexible. but they can also make individuals ’ lives more uncertain. to this end, it is important to improve social protection – a policy that has come 20 / 23 bis central bankers'speeches to be known as flexicurity. reforms to the institutional setting of emu to improve economic policy coordination, convergence and risk sharing euro area member states should enhance real and cyclical convergence, which requires establishing closer economic policy coordination. improved transparency and predictability in the interpretation and enforcement of fiscal rules ( stability and growth pact ) and ownership and credible implementation of the country specific recommendations are prerequisites for successful policy coordination. furthermore, the adjustment mechanism within emu should be facilitated by ensuring that it works in a symmetric way, i. e. both for countries with sustained external deficits and for those with sustained external surpluses. to this end, the macroeconomic imbalances procedure should be strengthened and foster reforms in countries that have been accumulating large and sustained current account surpluses. crisis stricken countries have improved their external positions on account of both higher exports

fight high unemployment, in particular long - term and youth unemployment, the active employment policies and the vocational training programmes in place need to be constantly improved and expanded, while their effectiveness also needs to be increased, which requires results - based review and monitoring. moreover, the enhancement of employment support schemes should go hand in hand with action against undeclared and uninsured work. 8. education reform the road to growth entails knowledge, research, innovation and lifelong learning. the exit of greek society from the crisis can only be achieved through its transformation into a society of creative citizens, capable of preserving and expanding its human capital stock. in this context, the education reform currently being debated, which forms an integral part of the national growth strategy, must be based on five pillars : ( a ) evaluation of the greek education system at all levels with a view to enhancing innovation and entrepreneurship ; ( b ) rationalisation of curricula across all educational levels, as well as of the functioning and governance of higher education institutions, while enhancing the efficiency and autonomy of public educational units ; ( c ) breaking the hold of corporatist interests on the education system ; ( d ) increasing funding, which still remains low ; and ( e ) transparency at all levels. 9. halting the brain drain soaring unemployment and the deep economic recession have caused part of greece ’ s human resources to migrate abroad, with alarming implications for the country ’ s demographics, public finances, pension system and, to the extent that it involves high - skilled people, the quality of the remaining labour force. in order to reverse this brain drain, the greek state must take measures aimed at : ( a ) redefining the types and forms of academic and vocational specialisation needed to improve skill matching for young generations ; ( b ) supporting business start - ups ; ( c ) combatting mediocracy, the lack of transparency and nepotism ; ( d ) promoting excellence ; ( e ) expanding apprenticeship and internship schemes ; and ( vi ) fostering a business - friendly environment. 10. supporting social cohesion and tackling poverty sustainable growth hinges upon social cohesion, under threat at present from rising poverty, income inequality and social exclusion. although based on the results of the latest eu - silc survey ( 2014 ), both indices, namely the poverty gap and the relative risk of poverty in greece decreased somewhat, the relative risk of poverty is still the third highest in the eu - 28. moreover, the number of