To sum up, diversity in terms of inflation and cost developments is undesirable when it reflects structural rigidities or a lack of competition. While we see evidence of a stronger common euro area cycle, we also see diversity in national trend growth. Monetary policy has a limited role in addressing such diversity.
Changes in competitiveness are unfolding faster than was foreseen prior to the launch of the euro, which is good in some respect because it means that necessary adjustments in relative competitiveness can be more rapid. But it also suggests that a lucid monitoring of competitive indicators is of the essence to avoid possible rapid losses of relative competitiveness inside the euro area. 4.