Wage moderation and cost-reductions will restore corporate sector competitiveness, renewing growth in business investment for the first time in four years. Thanks to this and other factors, growth in 2005 will return to its potential, a potential that will in due course benefit from the range of structural measures now in the pipeline.
Despite the hesitant start, the economy will hence eventually gain full speed. Whereas the economic signals are green, all warning lights in the budgetary area in Europe are flashing bright red. Three countries have already crashed the red light, with a deficit exceeding the 3% ceiling under the Maastricht Treaty.