4  BIS central bankers’ speeches  Strike activity and a slow breakdown in trust between major social partners have impacted on business confidence and hence on investment. Add to this weak consumer demand, and it appears as though the economy is in a rut: weak demand leads to low investment, weak investment means no growth in employment and household incomes.
How does one break out of such a rut? There is little space for macroeconomic policy in this context. Fiscal policy, having been used successfully to offset weak demand for six years has reached its limits.