Continued labour market recovery and creation of the basis for growth on sustainable grounds At the beginning of the year, economic activity was without a doubt affected by supply-side shocks, which primarily reflected on agriculture and energy. However, sectors unaffected by negative effects of these shocks continued to record good performance, particularly manufacturing.
Decision-making on fiscal policies in the euro area is therefore decentralised among sovereign states, guided only by a set of fiscal rules – the Stability and Growth Pact – which the centre – the European Commission, the Council of Ministers – has limited power to enforce.