For instance, the slower growth of some larger EMU member states may owe something to heavy tax burdens and to inadequate reforms on the labour market. This is where national governments must take action. The growth differentials in EMU may likewise reflect in part the economic catching-up process of those economies whose income level remains distinctly below the EMU average.
Countries in the process of catching up are typically marked by sharp advances in productivity in the tradable goods sector. The acceleration of productivity growth is normally mirrored in corresponding wage rises.