Moreover, the euro anchors monetary stability in the region, often directly, for instance through the European  2  BIS Review 89/2007  Exchange Rate Mechanism ERM II. Currently, six of the 12 new Member States are members of ERM II: Cyprus, Estonia, Latvia, Lithuania, Malta, and Slovakia.
For central banks, it is essential to monitor these underlying structural changes and assess the implications for economic growth and inflation dynamics along both cyclical and trend dimensions.