However, with respect to macroeconomic stabilisation, any further stimulus appears unnecessary, unless a perceptible deterioration in the economic outlook becomes apparent. Germany’s output gap is about to close and forecasts don’t foresee a marked deterioration. It would be important to use the leeway wisely in order to promote sustainable growth in the long run and not just cause a flash in the pan.
Those responsible for other policy areas are urged now even more to take the necessary steps to improve longer-term growth prospects for the euro area. A cut in the central bank’s rates cannot be a substitute for convincing structural reforms in the economies. That should always be kept in mind in discussions on the stabilisation potential of monetary policy.