The recession has caused a contraction in the GDP share of industry, and conversely an increase in the share of service sectors, which are characterised by slower productivity growth. Over the longer term, this structural shift will weaken the growth potential of the economy. Export growth will be bolstered by stronger global demand for capital goods towards the end of the forecast period.
The early announcement of the interest rate level for the launch of the euro may help stabilise expectations in the financial markets. But of course, the rate cut cannot solve the severe structural problems in most of the euro countries. This is particularly true of the structural problems on the labour markets.