9  Had participation rates within age groups moved in the way we have seen but the population age structure been unchanged from where it was in September 2006, simple calculations suggest that the participation rate would have been 1.8 percentage points higher in the June quarter 2016.
For many years strong growth in domestic demand led to relatively high inflation. The persistent inflation and labour cost differential with the average of the euro area during the expansion has hampered competitiveness which will have to be regained. The present situation suggests a need for labour market reform and wage moderation in particular by discontinuing wage indexation.