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Luxembourg is today one of the main international centres for investment funds. Besides the sector’s direct and indirect employment effects, the most important effect is the large tax revenue generating capacity of the sector, accounting directly for over 20% of aggregate tax revenues.
According to Mr. Gurría, the first decade of Economic and Monetary Union (EMU) has been a success, but the onset of recession amid ongoing financial turmoil has created new challenges for monetary and fiscal policy implementation, liquidity management and the regulation and supervision of European financial institutions.
Can 2009 bring a ray of light to lift the gloom and end the severest financial and economic crisis in decades? The OECD is working with the world’s governments and international organisations to stop recent market and policy failures from happening again.
The first decade of the Economic and Monetary Union (EMU) has been a success, but the onset of recession amid ongoing financial turmoil has created new challenges.
Financial innovation and market integration have deepened linkages between euro area markets and institutions, possibly affecting the speed and channels of area-wide monetary policy transmission.
Nigel Pain, OECD Senior Economist, on the Challenges facing the Euro Area Economy
English, , 418kb
After a sustained period of good macroeconomic performance, new challenges have emerged for the euro area economy. Output growth moderated through 2007 and continued to lose momentum through 2008, with GDP declining in both the second and third quarters of the year. The slowdown has been compounded by the international financial market turmoil that began in August 2007 and intensified in September 2008. World economic activity has
The onset of recession amid tumbling inflation and continued financial market turmoil is posing considerable challenges for macroeconomic policy and ECB financial market operations.
The economic downturn and the financial turmoil are intensifying fiscal pressures. In the longer-term, progress towards fiscal sustainability and improving the quality of the public finances remain priorities.
Financial integration and development raise the likelihood of cross-border financial contagion. Further improvements are needed to European regulatory and supervisory frameworks to ensure financial stability.