Euro area countries are currently taking a series of policy measures both to raise their growth potential and to make growth more sustainable. They are achieving greater sustainability by moving towards an economic model based less on external borrowing and more on internal competitiveness.
Indeed, according to harmonised competitiveness indicators based on unit labour costs have all registered significant improvements since 1999, Ireland (–19% since 1999), Spain (–9.5%), Greece (–9%), and Portugal (–6.6%). The loss of competitiveness accumulated until 2007 has been totally offset since the beginning of the crisis.