Looking forward, in order to sustain a high level of social welfare in the long term, it is essential for euro area countries to improve their capacity to prevent crisis and hence to ensure that macroeconomic adjustment progresses in a smoother way.
The emergence of macroeconomic imbalances The crisis has demonstrated how persistent losses in competitiveness can translate into macroeconomic imbalances, eventually leading to a painful adjustment. Spain’s experience during the crisis is instructive in this regard.