Economic surveys and country surveillance

Economic Survey of the Euro Area 2009


Executive summary | Content | How to obtain this publication | Additional info


The next Economic survey of the Euro Area will be prepared for 2010.


An Economic Survey is published every 1½-2 years for each OECD country.

Read more about how Surveys are prepared

The OECD assessment and recommendations on the main economic challenges faced by the Euro Area are available by clicking on each chapter heading below.





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Speech & Audio


"video by Nigel Pain"

Nigel Pain, Senior economist and Head of the EU desk in OECD Economics Department 




Chapter 1: Key Challenges

The euro area economy has slipped into recession and inflation is falling sharply. Monetary policy must ensure that medium-term price stability is maintained, and further improvements in the ECB communication framework could assist this. The immediate challenges stemming from the financial turmoil have been addressed by the ECB through its monetary operations and by the emergency support measures taken by European governments to restore confidence in financial markets, although considerable stress in financial markets remains. Some countries have room to undertake discretionary easing of fiscal policy, provided such measures are timely, temporary and well-targetted. In the longer term, the financial market turmoil underlines the importance of preparing appropriate measures to deal with the possibility of relatively rare but severe systemic events that have the power to harm the wider economy.


Chapter 2: Financial integration, innovation and the monetary policy transmission mechanism

Over the past decade, considerable progress has been made in integrating Europe’s financial markets, facilitated by policies to ensure the free flow of capital and provision of financial services across borders and the adoption of the euro. Financial innovation and enhanced market integration have changed the face of the European financial system, enhancing competitive pressures, although impediments still remain. New financial products have led to the unbundling of risks and large banking groups have emerged operating across national borders and in multiple market segments. These have increased the inter-linkages between markets and institutions across the euro area, raising questions about whether the speed and the channels of monetary policy transmission in the Euro area have changed.


Chapter 3: Financial market stability: enhancing regulation and supervision

Financial innovation and integration have spurred financial development and enhanced consumer choice, but have also facilitated the emergence of large, complex, cross-border financial institutions. This has changed risk profiles and made cross-border contagion more likely. An important challenge for the European authorities is to manage systemic risks to ensure financial stability in an integrated financial market. The financial market turmoil has highlighted gaps in the regulatory and supervisory framework. Although progress has been made in updating and improving these frameworks since the advent of the financial turmoil, more can be done. In particular, further steps are needed to remove the mismatch between more integrated European financial markets and largely national supervisory frameworks. Attention should also be given to the question of which measures are adequate to dampen the pro-cyclicality of the financial system. New regulations should not impose unnecessary costs on consumers, businesses and financial institutions, nor create obstacles to further market integration.


Chapter 4: Fiscal policy

The budgetary position has improved in recent years against the background of buoyant revenue growth. However, revenue growth is faltering as activity eases, while durable progress towards fiscal sustainability has been limited. Moreover, some countries continue to experience large underlying deficits and rising debt. The downturn will lower revenues and there is pressure on the cost of borrowing some countries. Some governments have room for timely, temporary and well-targetted fiscal measures to cushion the economic slowdown. Fiscal sustainability should remain a priority in the longer term. Improvements to the quality of public finances would contribute to raising living standards. This involves a better design of tax policies and greater focus on public sector efficiency.


How to obtain this publication


The complete edition of the Economic survey of the Euro Area 2009 is available from:

The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.


Additional information

For further information please contact the Euro Area Desk at the OECD Economics Department at

The OECD Secretariat's report was prepared by Nigel Pain, Jeremy Lawson, Sebastian Barnes and Marte Sollie under the supervision of Peter Hoeller. Research assistance was provided by Isabelle Duong.




Countries list

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  • Argentina
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