1 Moreover, there are concerns that a negative feedback loop between the financial sector and the real economy may emerge in some countries, which may result in a prolonged period of weakness in economic activity and entail deflation risks. The inflation outlook for the euro area The preservation of price stability over the medium term is the overriding policy objective for the ECB.
As a general rule, we recommend to all countries, not just Italy, that in the most encouraging part of the cycle, the windfall revenues should be used to balance the budget. It’s a general rule that the ECB, as well as the Commission, are recommending to all governments and parliaments in Europe.