• The first concerns shifts in the competitiveness of euro-area Member States.

• The second is the impact of real interest rates on activity in member countries.

• The third is the role of policies that affect the adjustment capacity by affecting the amplitude of swings in economic activity and employment during adjustment – among which fiscal stabilizers are the best-known.

• The fourth is an assessment of country experiences with adjustment. Against this background economic policy and surveillance issues are discussed.

The document is an integral element of the Commission's ongoing surveillance of economic developments and policies in the Member States, the euro area and the EU.