As I mentioned, the crisis countries have made significant progress in reducing their external imbalances. Between 2008 and 2013, the current account balances of Ireland, Portugal and Greece as a percentage of GDP improved by between 10 and 16 percentage points. Much of this improvement reflects price and cost adjustments. Unit labour costs have fallen significantly.
Consequently, the strength of the upturn in economic activity has become more uncertain, both inside and outside the euro area. At the same time, however, the conditions for a stronger economic recovery in the euro area remain in place.