Competitiveness imbalances are one of the most visible symptoms of insufficient macroeconomic adjustment mechanisms in the euro area.5 The developments in Germany and France – two countries which together represent nearly half of euro area GDP, and have seen broadly similar movements in GDP and in prices (see Figures 5 and 6) since the start of Monetary Union – are instructive in this regard.
5 / 17  BIS central bankers' speeches  6 / 17  BIS central bankers' speeches  Germany, at the start of Monetary Union, was considered the “sick man of Europe”.