On top of all this, we have also seen a sizeable appreciation of the euro since 2002, particularly against the dollar, taking it back to the level prevailing at its initial launch. From that short outline, it is clear that the economic and financial environment of the past seven years has provided a stiff test of the single monetary policy.
Given this background, what has been the outcome? Over the past seven years, the evidence indicates that both inflation and inflation expectations have remained firmly under control. Since the beginning of 1999, indicators of long-term inflation expectations in the euro area have remained below but close to 2 per cent.