So on this measure we are more competitive, but we have not seen a strong adjustment to this, as evident in the persistent current account deficit. There are a number of possible explanations but I will highlight a few points. It is important to understand what the key drivers of the depreciation have been.
The success of the nominal convergence process – which preceded the start of Monetary Union – and the governments’ commitment to honour the fiscal regulations associated with the monetary  BIS Review 13/2002  3  integration itself, reduced risks of EU-wide investments even before the creation of the ECB.