Failure to address labour and product market reforms could hobble Europe for years to come even if the region can escape the worst of the US-led downturn, according to to Angel Gurría, secretary general of the Organisation for Economic Co-operation and Development.

“Reform is indispensable,” he says in a video interview with the Financial Times. “People have to be aware of the costs of inaction – the costs of action are short-term but the benefits are long-term.”