The leverage ratio in 2007 and 2008 was around 150%, and then increased to around 250% in 2016, which means that all economic entities borrowed considerably. This has drawn the attention of regulatory authorities and the authorities in charge of macro regulation and control. In recent years, the central government has proposed to facilitate “deleveraging”.
The main long-term challenge is moving towards a more balanced growth and financing model, which is more reliant on domestic innovation and on higher investment spending than it has been so far. This will only be possible if domestic institutions and governance are improved. Those countries that joined the euro area have continued improving their institutional quality, partly owing to the accession process.