From the monetary policy point of view it is also important that labour market reforms facilitate wage adjustments that reflect more closely regional and sectoral productivity differences. Although labour markets in the EU are very heterogeneous many old and new Member States face severe problems. In many countries employment rates are low by international standards and in some cases even falling.
Let me summarize the current situation of Japan’s economy again. In the corporate sector, profits have been improving, and firms’ positive stance on making fixed investment has been maintained in spite of a decline in demand after the consumption tax hike.