That applies to Germany, too. The economic situation is more favourable than that of other euro-area countries, yet a number of structural challenges – like the ageing of the population – are actually considerably greater in Germany. Good progress has been made with the reforms in the crisis-hit countries, as the improved position in their current accounts and public finances demonstrates.
Policy prescriptions So far, we’ve talked about the adjustments that are needed in response to powerful, slowmoving global forces. We know that these forces have reduced the real neutral interest rate here in Canada and will keep the growth of potential output around 1.5 per cent for the next number of years.