Reflecting all these factors, the Committee has indicated in its post-meeting statements that it expects inflation to return to 2 percent. With regard to our degree of confidence in this  5  It is noteworthy that in several inflation-targeting economies, the ten year expected inflation rate has settled precisely at the target inflation rate.
Europe – and the Euro area in particular – has shown positive fundamentals, on a consolidated basis, in particular, as regards its overall fiscal situation and domestic and external equilibrium. But on a country-to-country basis the major weakness of the Economic and Monetary Union lies in its insufficient governance of the economic union, while the monetary union has delivered according to expectations.