As long as fiscal policy is on an unsustainable course with government debt ratios still rising, the social costs of further delaying adjustment will exceed the costs to society of acting sooner. We also have to acknowledge that there is a lot of uncertainty regarding the short run effects of fiscal adjustment.
Survey evidence points to further improvements in economic activity at the beginning of this year so that the economic recovery should gradually broaden and strengthen. And in January, the euro area unemployment rate dropped to the lowest level observed since August 2012. Of course, these improvements cannot and should not solely be attributed to our monetary easing.