And we are now seeing signs of limited reversals: some euro area countries with relatively high inflation rates have moved down to, or even below, the euro area average. Overall, these corrections are welcome, but  9  Asdrubali, Sorensen and Yosha, (1996) “Channels of Interstate Risk Sharing: United States 1963-1990”, Quarterly Journal of Economics, CXI, November: 1081-1110.
The question, however, is: how did Greece get in such a situation and does it have any alternative? The major effort of adjustment reflects the severity of the macroeconomic imbalances that have accumulated over years in Greece. Misguided economic and fiscal policies, lack of structural reforms: all these policies undermined the sustainability of public debt and created a very large competitiveness gap.