Overall, looking at competitiveness within the euro area, there have been substantial differences across countries. Indeed, the strains in some sovereign debt markets have been compounded by the severe competitiveness differentials that have emerged within the euro area. A convenient way to identify competitiveness differentials is simply to look at the current account balances of each country.
Current account imbalances could be justified for any country, including those participating in a monetary union, and they do not necessarily reflect a loss of competitiveness. But increasingly, larger current account deficits have resulted from significant losses of national competitiveness, signalling domestic macroeconomic imbalances and deeper structural  BIS central bankers’ speeches  3  problems.