Whereas now, after the crisis, real convergence has resumed in some parts of the euro area, we see that this reflects mostly a recovery in labor markets, while the cross-border flows of capital have stagnated and there are again few signs of a more efficient allocation of production factors.
This suggests that member states are still not reaping the full benefits of their participation in EMU and may leave their economies again vulnerable to shocks. In this light the recent slowdown in euro area activity, albeit largely caused by external trade shocks, is a firm reminder: further strengthening of EMU is necessary.