Everywhere governments have undertaken significant and difficult reforms and continue to do so. Although more work is certainly needed, we should appreciate how quickly things improve when serious action is taken. To foster employment and growth policy makers have to address macroeconomic imbalances in the euro area.
While monetary policy will continue to ensure price stability in the euro area as a whole and cannot address inflation rates in individual countries, relative competitiveness adjustments can and need to occur at the country level. These adjustments need to be driven by national policies.