The EU’s Southern Neighbourhood: Macroeconomic Performance and Equity.

Four years after the start of the Arab Spring uprisings, the macroeconomic situation in the EU’s Southern Neighbourhood remains weak and vulnerable and the recent intensification of civil strife and military conflicts is exacerbating this economic malaise. Macroeconomic performance may not improve in a sustainable manner without an appropriate resolution or mitigation of the underlying political problems. At the same time, macroeconomic instability and social frustration with an economic model that is perceived as unfair and non-inclusive risk feeding negatively into the existing political instability. This Economic Brief argues that it is essential for the countries in the region to press ahead with their economic stabilisation and reform agendas even if the political environment is far from optimal. It looks into some key reforms that are necessary to both ensure macroeconomic sustainability and move towards a more equitable growth model.