UPDATE: Draghi: Accomod Mopol Opportunity for Struct Reforms

--Adds Quotes throughout

By Christian Vits

     FRANKFURT (MNI) - European Central Bank President Mario Draghi reiterated

his call for structural reforms in the euro area.

     "The crisis has confirmed that more flexible economies are more resilient,

especially for countries that are part of a monetary union," Draghi said in a

speech in Frankfurt Wednesday. "Lessons about how to design and implement

reforms so as to maximise their benefits and minimise their short-term costs

should be put into practice."

     "With monetary policy being accommodative, we now have a window of

opportunity to take these measures," he added.

     To get the best results, broad coordination among countries is needed,

Draghi noted.

     "Labour market reforms can emphasise more wage adjustment or more

employment adjustment, and countries will only converge in their response to

shocks if they have a broadly similar mix," he said.

     Draghi acknowledged that many countries have successfully introduced

broad-based reforms during the crisis. "But there are still large gains that

could be achieved," added.

     The case for structural reforms needs "to go beyond their efficiency

benefits. We need to show that reforms can contribute to both efficiency and

equity," Draghi stressed. Addressing tax avoidance and evasion would also help

reduce inequality, he said.

     The payoff of efforts in this area can be significant. In 2015, EU

countries lost around 12 percent of total expected revenues in value-added tax,

partly because of tax evasion and inadequate tax collection systems.

     "Still, some reforms will always have negative distributional effects, at

least in the short term," Draghi said. "But in these cases we can do more to

reduce inequality by ensuring that flexibility is combined with security."

     He noted that before the crisis, several countries introduced labour market

reforms to increase flexibility, but did little to make their labour markets

more secure. "This ended up disproportionately penalising young people, who had

weak job protections and meagre support during unemployment," Draghi underlined.

     "So we should never think that simply compensating the 'losers' of reforms

is enough. Public policies have to be designed to help people back into work,

and into jobs where they can develop and refine their skills."

--MNI Frankfurt Bureau; +49 69 97782671; email: christian.vits@marketnews.com

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