“Governments should not view the current period of low interest rates and favourable market sentiment as an invitation to abandon the path of fiscal prudence.” Cœuré said that the measures the ECB’s governing council had agreed in June have been warranted because of the low inflation in the euro area as a whole and also in Germany.
The fall in German inflation was adding the risk of a race to the bottom for the euro area as a whole, with potentially disruptive economic consequences.