number of countries have implemented reforms in recent years which have helped to reduce unemployment – most visibly spain and portugal, but also italy. 2 these reforms also seem to have made unemployment more responsive to growth. 3 structural policies are a main factor explaining these positive developments. but of course supportive financial and macroeconomic policies have been vital, too. new research also finds that labour market reforms in the euro area reduce the dispersion of unemployment and gdp across member countries following a common shock, making the 1 / 5 bis central bankers'speeches single monetary policy more effective for everyone. 4 but it is clear that, to get the best results, there has to be some broad coordination among countries. labour market reforms can emphasise more wage adjustment or more employment adjustment, and countries will only converge in their response to shocks if they have a broadly similar mix. 5 this underscores why the european semester process is crucial – not only for encouraging structural reforms, but also for ensuring some degree of beneficial consistency between them. lessons on the composition of reforms and their interaction with macro policies still, even if some countries have had positive experiences with reforms during the crisis, we know that for others it has been more difficult. this brings me to my second theme about the design and implementation of reforms. there are three key areas where lessons can be drawn : the packaging of reforms, their scope and the macro - policy mix that accompanies them. first, the packaging of reforms is crucial for reducing their short - term adjustment costs. unlike what happened in the years even before the crisis, labour market reforms must be preceded – or least accompanied by – product market reforms, otherwise wage adjustments will not be fully passed on to prices. instead, profit mark - ups will rise and the purchasing power of households will fall, thereby worsening the economic conditions of consumers and aggravating any recession. 6 during the crisis, because of powerful vested interests, labour market reforms were not accompanied by product market reforms in some countries, and so wages fell and prices did not adjust in tandem. the key question is then : how do we make sure that product market reforms do indeed take place? while there are no easy answers, imf research suggests a central part of the answer may be carefully designed fiscal incentives to soften the blow for those affected. in the past, germany, ireland and the uk have all successfully used such incentives to bring about these reforms. 7 the second area where we have learned lessons from the crisis is the scope of

##skilled workers to find more skilled jobs, meaning that they continue to be trapped in low - paid jobs. 18 the main answer is education and training that disseminates marketable skills more widely. otherwise, there is a risk that, rather than being seen as an agent of jobs and opportunity, structural reforms are seen as a catalyst for a low - wage, precarious economy. conclusion let me sum up. the crisis has confirmed that more flexible economies are more resilient, especially for countries that are part of a monetary union. lessons about how to design and implement reforms so as to maximise their benefits and minimise their short - term costs should be put into practice. reforms have to take into account equity as well as efficiency. vested interests have to be tackled and those who have lost out given proper support. with monetary policy being accommodative, we now have a window of opportunity to take these measures. i hope the insights at this conference can move this agenda forward. 1 this holds true for both the countries that joined the euro area early on ( by 2001 ) and the former communist countries that joined later. however, for a given “ doing business ” level ( world bank measure of business regulations ) the latter group seem to have generally outperformed the former, possibly due to their larger catching - up potential. 2 see banco de espana ( 2015 ), “ competitive adjustment and recovery in the spanish economy ”, annual report, box 2, pp. 39 - 63 ; vansteenkiste, i. ( 2017 ), “ did the crisis permanently scar the portuguese labour market? evidence from a markov - switching beveridge curve analysis ”, working paper series, no 2043, ecb, frankfurt am main, april ; and sestito, p. and viviano, e. ( 2016 ), “ hiring incentives and / or firing cost reduction? evaluating the impact of the 2015 policies on the italian labour market ”, questioni di economia e finanza ( occasional papers ), no. 325, banca d ’ italia, march. 3 based on a static relationship between changes in the employment rate and percentage changes in gdp for the period between the first quarter of 1999 and the second quarter of 2015. the period of the recovery analysed is from q2 2013 to q2 2015. see the article entitled “ what is behind the recent rebound in euro area employment? ”, economic bulletin, issue 8, ecb