Firstly, the extent and pervasiveness of the reduction in expected output over the course of the last year are enormous. By any historical standards, the region has suffered a very serious growth shock. Secondly, the current Consensus view for 1999 does not envisage any substantive recovery for the region. At best, it is suggestive of stabilisation at the new, lower, levels of activity.
The single monetary policy, conducted for the euro area as a whole, is playing its part already – notably by providing a low inflation environment with favourable financing conditions. And, of course, the euro has eliminated, once and for all, the intra-euro area exchange rate volatility.