Substantial structural reforms have been taken on labour and product markets by stressed euro area countries since 2008 – more than is generally acknowledged in Germany. These reforms have the potential to raise the growth potential in the respective countries and to improve the functioning of EMU. In the context of the optimum currency area debate it is argued that structural reforms have reduced the heterogeneity between euro area countries in terms of market rigidities. Moreover, wage and price ﬂexibility – which are needed to better adjust to exogenous economic shocks – will be enhanced. In fact, ﬁrst signs can be detected that wage ﬂexibility has already increased in southern euro area countries.