Southern Europe can return to long-term growth if its governments focus on three vital areas of reform, Thomas Mirow, the President of the European Bank for Reconstruction and Development, says in a speech on Economic and Monetary Union today (Thursday April 26th).

Improving labour markets, reducing regulatory barriers to competition and investing in education and R & D are all imperative if Italy, Spain, Portugal and Greece are to deliver sustainable growth again, he tells the Official Monetary and Financial Institutions Forum.

But he also sounds a warning that, in the short term, too much austerity can destroy popular support for structural reform.