That is why adding momentum to the forces of growth must be at the heart of the euro-area countries’ endeavours. Monetary policy cannot bring about that kind of stronger economic growth – it’s an objective that only smart fiscal and economic policy, such as structural reforms, can achieve.
Cyclical forces also lead to fluctuations around secular trends, especially when driven by the financial cycle, and such forces are still at play in the euro area today. Demand conditions, while improving, appear relatively weak for the early stage of the business cycle. This is largely explained by the legacy of the financial crisis.