But the strength of the cooperation can only be put to the test in practice. The need for stronger economic cooperation is reflected in the different economic situations of the individual EU member states at present. The best-performing member states are characterised by a long period of moderate wage inflation relative to productivity developments, as well as balanced public finances.
The household sector, too, cannot indefinitely run persistent deficits. Otherwise they will all go bankrupt. The source of persistent current account deficits in the present context cannot but be the government’s own deficit. This also has to be corrected failing which Mauritius would eventually have to face a balance of payments crisis should we target a specific exchange rate.