Making the cyclical recovery sustainable At the same time, the current global cyclical recovery also harbours risks – risks of complacency and inaction. Despite the encouraging upturn in growth and the shift in consumer and investor sentiment, some of the more fundamental obstacles to sustainable growth have not disappeared.
On the broader macroeconomic side, the new Macroeconomic Imbalances Procedure allows for early monitoring of – amongst other things – competitiveness trends, private sector credit flows and house prices. If excessive imbalances show up in these areas, sanctions1 can be applied to euro area countries that do not follow recommendations to correct them.