2  BIS central bankers’ speeches  In some cases, lower interest rates brought about by monetary union and inflowing capital fuelled unsustainable developments. The resulting domestic boom and existing labour market rigidities led to large wage increases well in excess of productivity growth, triggering a loss in price competitiveness, thereby impairing export performance.
Current account deficits were therefore ultimately a symptom of countries living beyond their means. Portugal, for example, had a current account deficit before the crisis amounting to 12 % of GDP, which was definitely not sustainable. Economic adjustment was therefore unavoidable.