Lunch Debate: Adjustment in Euro Area Deficit Countries


The Jacques Delors Institut – Berlin, the International Monetary Fund and the Hertie School of Governance cordially invite you to a talk by Thierry Tressel, PhD, senior economist at the IMF:

Lunch Debate
Adjustment in Euro Area Deficit Countries: Progress, Challenges, and Policies
23 September 2014 | 12.30 – 2 p.m.
Allianz Stiftungsforum | Pariser Platz 6 | 10117 Berlin

Mr Tressel will present the findings of a recent IMF Staff Discussion Note he authored. The paper provides a critical analysis of the ongoing rebalancing of euro area “deficit economies” (Greece, Ireland, Portugal, and Spain) that accumulated large current account deficits and external liability positions in the run-up to the crisis. It shows that relative price adjustments have been proceeding gradually. Internal rebalancing has come with subdued activity—notably very high unemployment in the deficit economies—and made continued adjustment more difficult. To advance rebalancing further, the paper emphasizes the need for: (1) macroeconomic policies that support demand and bring inflation in line with the ECB’s medium-term price stability objective; (2) continued EMU reforms (banking union) to ensure proper financial intermediation; and (3) structural reforms in product and labor markets to improve productivity and support the reallocation of resources to tradable sectors.

Thierry Tressel, PhD, is a senior economist in the European Department of the IMF. He has worked on the euro area desk and on various European countries. He previously worked in the Research Department of the IMF on macroeconomic issues, development and finance, and on emerging markets. He is currently on leave from the IMF at the World Bank, where he is leading the preparation of the 2015 World Bank Global Financial Development Report. He holds a PhD in Economics from the Ecole des Hautes Etudes en Sciences Sociales and an engineering degree from the Ecole Polytechnique in Paris.

Welcome & Introduction:
Prof. Dr. Henrik Enderlein, Director, Jacques Delors Institut – Berlin, Professor of Political Economy and Associate Dean, Hertie School of Governance

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We look forward to welcoming you to this event.