ABSTRACT
This conclusion presents some thoughts on two concepts discussed in the various chapters of this book. The book discuss in great detail, policy action at both the European and the national levels has been insufficient to counteract such self-reinforcing mechanisms. The Eurozone level, the substantial drop in real interest rates during the 1990s, in anticipation of the European Monetary Union, led to a boost in economic activity, which translated into a significant appreciation of the real exchange rates. There is a need to improve governance of the EMU and the European common market, taking in greater account the need to promote investments in innovation and learning, as well as the fast upgrading of the industrial specialisation of the Eurozone's southern economies. Fostering learning, R&D and innovation, in connection with the export orientation of domestic firms and the attraction of high value-added FDI, should be among the highest priorities for policy makers.
