International trade progressively slowed in 2018, falling by 1.0 per cent in the last quarter of the year, and recent data suggest that the economy remained weak in the early months of 2019. The progressive liberalisation of trade that has characterised the last few decades has come to a sudden halt and is being reversed in some important economies.
It will also be of significance for countries in the entire region as in many of them the banking sector is dominated by euro area headquartered banks. 2. My second key policy lesson is that the process of economic and institutional convergence needs to be sustainable over the longer run.