Fiscal policy became rather more procyclical; the dependence on volatile or insecure taxes increased, as centralized wage settlements continued to be bought by income tax concessions. The external shock of euro membership lowered nominal and real interest rates by removing the exchange risk premium which had persisted since the early 1980s – albeit on a reduced scale.
Progress has been made, albeit to a varying extent, in all the Mediterranean countries in terms of institutional reforms, market building, liberalization programmes and reducing the role of the state in the economy; coordination of the action aimed at the integrated development of the area is still lacking. There are risks of marginalization with respect to a world economy that is changing rapidly.