In fact, what happened is that the very low market interest rates that existed only in a small number of economies were immediately extended to the full body of the euro area. Long-term inflation expectations aligned with the low levels of the best performing economies that were merged into the euro.
As a consequence, with nominal and real interest rates at historically low levels, Europe now enjoys much more favourable financial conditions than in the 1990s. This success is all the more remarkable given that the ECB started without a track record of its own. In this respect, we can say today that the ECB was borne credible. But why was that?