The joint Intereconomics/CEPS conference focused on income convergence among EU countries and within specific countries like Germany and Italy. I would like to first caution about overinterpreting these results and then look at other divergences within the Eurozone, which I regard as much more...

This paper reviews the accumulated theory and evidence on the sources of European underperformance in terms of economic growth and unemployment. It takes the view that the main problem lies with labor market institutions, ranging from negotiation structures to hiring and firing costs,...