Since then, economic developments, which point to a gradual economic recovery in the euro area in the course of 2002, have been largely in line with the Governing Council's expectations, and we consider the current level of the key ECB interest rates appropriate to maintaining price stability over the medium term.
In the 1970s, the prevailing view was that nominal wage inflation led to price inflation, largely because of wage “catch up”; i.e., workers and unions demanding additional wage increases to compensate them for unexpected inflation and to match settlements in other sectors of the economy, such as the public sector.