With credit supply today no longer a constraining factor, the only major impediment to stronger productivity growth and real convergence is subpar institutions. Therefore, opening up protected sectors, cutting red tape and easing barriers for firm entry would reduce capital misallocation and foster stronger and more sustainable growth. Conclusions With this in mind, let me conclude.
The recent broadening of the euro area recovery and the marked drop in cross-country dispersion in a number of economic indicators is an encouraging development. It underscores that our monetary policy measures have materially reduced financial fragmentation and that their positive effects are increasingly spreading more evenly across the euro area.