Let me highlight three critical challenges. 1. First, in the current context of strong global competition, firms need to adapt permanently to the fast-changing competition, requiring accordingly adaptable support services by the State. This means that we need a State that is lean and efficient, while being able to safeguard social cohesion at the same time. 2.
Second, transferring resources towards the tradable sector is crucial for avoiding a return to external imbalances, but may jeopardise social cohesion. Indeed, adapting to competition is always challenging and there are losers in this process. These situations have to be supported by sustainable social safety nets. 3.