Overall, subdued aggregate demand and the strengthening of the euro should contribute to lower inflationary pressure. At the same time, other factors - in particular monetary developments, but also wage trends and oil price developments - might pose risks to price stability in the medium term and therefore need to be monitored closely.
Regarding fiscal policies in the euro area, flood-related costs should lead to a review of priorities and a reallocation of expenditure. In addition, against the background of recent developments, it seems to be more warranted than ever to call on member countries to remain committed to the Stability and Growth Pact.