The benefits of the country’s adjustment extend beyond the credibility and competitiveness effects of the reduced macroeconomic imbalances. The adjustment means that Greece will continue to receive financial support from official lenders, so that it can complete the process of restructuring its economy and banking system.
After its restructuring, the banking system will be in a position to resume its role as the main source of financial intermediation, supplying funds to support real economic activity. The euro area’s response to the crisis And what about the euro area as a whole? Here, there are two important factors at work that will make the euro area a stronger monetary union.