First, sufficient safety margins are necessary to cope with the adverse shocks which will not cease to occur in a Monetary Union. Second, they are necessary to increase the scope for reforms of tax and expenditure systems which are conducive to long-term growth, and to start on the necessary reforms of social security systems.
It appears that a number of updated stability programs, which have recently been sent to the European Commission for examination, do not yet sufficiently incorporate such objectives. With all the appropriate policies in place, the momentum of non-inflationary growth could eventually be stronger than is currently expected.