Let mention two: first, the negative effects of persistent above-average ULC growth and losses of competitiveness on economic activity and employment may take some time to materialise. Second, these adverse effects on the real economy have been counteracted, and even fully offset, over the past few years by favourable effects of other, structural or cyclical, factors.
Such factors have included substantial interest rate decreases in the run-up to EMU, EU structural funds support, immigration flows and financial liberalisation. Their positive impact on economic activity may imply that the link between adverse ULC developments and economic activity was less visible and the respective adjustment processes may appear not to function. However, such a favourable constellation of factors is unlikely to persist.