Greece, as well as Spain, Italy and Portugal, should fight high youth unemployment levels with labor market reforms, less bureaucracy for business and investment in innovation, International Monetary Fund chief Christine Lagarde said on Thursday.
Speaking in Germany, Lagarde said the structural reforms, with backing from the European Union, were needed to ensure that incomes in poorer members of the bloc catch up with their richer neighbors – a process referred to as convergence.
Successful convergence would help the bloc weather a storm taking shape in the form of populist parties that are opposed to the EU, discord over immigration policy and pressure on the global trading order, she said.
“The continent’s next generation, which is still suffering from the economic scars of the global financial crisis, is searching for quality jobs and a stable future,” Lagarde at a dinner on the eve of the Munich Security Conference.
“One in four young people in the EU are now at risk of being in poverty. Solving these challenges requires a renewed commitment to shared prosperity in Europe,” she added.
“So our goal should be clear: Restarting convergence and ensuring the fruits of economic growth are shared broadly across the EU. This will help restore faith in the European project.”