The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
A range of indicators point to a competitiveness gap of 10-20 percent with respect to euro area competitors. Closing the competitiveness gap will require an extended adjustment period, even with a jump in total factor productivity (TFP) growth and strong wage moderation. This paper reviews several factors that could help explain the boom and bust behavior of corporate investment. Investor sentiment will recover with the deepening of structural reforms, but high corporate debt level is likely to slow the pace of investment growth in the near future.