Imbalances in the Euro Area
In the run-up to the economic crisis, distinctive macroeconomic imbalances emerged in the euro area. Greece, Ireland, Italy, Portugal and Spain experienced a considerable deterioration of their international competitiveness and incurred high current account deficits. By contrast, Germany, among other countries, improved its competitiveness and achieved a large current account surplus. These imbalances continue to exist and are likely to threaten the economic recovery, the long-term growth perspectives and the cohesion of the EMU.