Our first objective must be to reduce financial fragmentation in the euro area, which is illustrated by the different borrowing conditions in the various euro area countries and which has contributed – among other factors – to a divergence of investment and unemployment rates.
Stressed economies are also those where investment has decreased the most.8 As a result, the average unemployment rate now stands above 18% on average for the group of countries hit by financial stress,9 whereas it is below 8% on average in non-stressed countries. Interestingly, these average unemployment rates were essentially the same before the financial crisis. Against this background, what can European institutions do?