Europe’s National-Level Structural Reform Priorities

IMF Working Papers, May 29, 2025

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Authors: Nina Budina, Oyun Erdene Adilbish, Diego A. Cerdeiro, Romain A Duval, Balázs Égert, Dmitriy Kovtun, Anh Thi Ngoc Nguyen, Michelle Tejada
Published: May 29, 2025
Series: IMF Working Papers
DOI: https://doi.org/10.5089/9798229011877.001

Europe has a large and persistent per capita income gap with the United States.
Deficiencies in total factor productivity, labor utilization, and capital intensity all play a role.
Deeper intra-Europe integration is one key element toward closing these gaps, but remaining structural domestic policy gaps in growth-friendly regulatory settings highlight the scope for complementary national-level action.
Successful implementation of the compiled national reform priorities could entail sizeable medium-term gains of around 5, 7 and 9 percent for advanced European, Central Eastern and Southeastern European, and Western Balkan economies, respectively.

Compiles IMF staff’s structural policy priorities for European countries to lift output over the medium term.
Reviews key implementation challenges to those national reforms.
Discusses complementarities with EU-level efforts.

Growth-friendly regulatory settings at the national level.
Complementary domestic reforms to deepen integration benefits from intra-Europe initiatives.
Structural policies spanning capital markets, financial markets, human capital, labor and labor markets, macrostructural analysis, revenue performance assessment, and tax gap mitigation.

Advanced European economies: around 5 percent medium-term gain.
Central Eastern and Southeastern European economies: around 7 percent medium-term gain.
Western Balkan economies: around 9 percent medium-term gain.

IMF Working Papers — “Europe’s National-Level Structural Reform Priorities”