The economic performance of the euro area since the mid-1990s Since 1996, the annual growth rate for the euro area has averaged 2.1% per year compared to 3.3% in the US. What are the fundamental causes of this unsatisfactory low trend growth in the euro area? The answers can be found by looking at the factors that determine potential or long-term economic growth, namely 1 : •  The degree of labour utilisation,  •  Productivity growth,  •  And the demographic trends. - Over the period 1996-2006, the euro area witnessed a slight improvement in the utilisation of labour, which increased on average by 0.4% per year (compared with 0.1% in the US) when defined as the total annual hours worked divided by the total population. Labour utilisation reflects the extent to which the potential labour resources in an economy are actually utilised and therefore have a direct influence on output growth. This improvement in labour utilisation mainly reflects the significant rise in the euro area overall employment rate from 58% in 1996 to 64.4% in 2006, accompanied by a decline in the aggregate unemployment rate from 10.7% to 7.9%. Although this is a very encouraging fact, which shows that the positive employment effect we witnessed over the last ten years has significantly helped us to partly counteract the growth differential to the US, one has to remain aware of the inferior starting position of euro area countries.
This fact has been recognized by the markets so that, since the onset of the global alarm about the pandemic, in Chile asset prices have fallen less than they have in other comparable economies. As Central Bank, we are actively working to ensure the full implementation and effect of the measures adopted. At the same time, we will be vigilant on how events unfold, ready to deploy all our instruments to support the economy. At this juncture, however, the actions of one institution alone will not do the job. In recent weeks we have been strengthening our coordination with the Ministry of Finance and the Financial Market Commission, to align rules and incentives so that the funds flow to the most stressed businesses and households. The challenges we face require intensifying this coordination, including a response from the banking system to measure up to the circumstances, and cooperation of the National Congress to speed up the legal reforms that require urgent implementation. Although this emergency affects the day-to-day lives of many people, if we know how to manage it well, with good policies and collaboration of everyone involved, the impact will be temporary and, as the pandemic is controlled, we can all return to our activities as usual. This will allow the economy to recover its growth rate and leave the period of contraction behind. However, for this to happen, it is essential that those needing help to get through this shock obtain it. Households and businesses must have access to credit at a reasonable cost.