What remains very challenging is growth, which is too low, and it should be Europe’s priority to support it not only in countries with adjustment programmes but also in all other euro area countries. This cannot be achieved through additional public spending but through additional investment.
All countries have to restore a climate of confidence that will be conducive to investment, and this includes large economies such as Germany, France and Italy. According to the latest figures, the inflation rate in the euro area has dropped as low as 0.7%, the lowest level in years. How serious is the problem of deflation for the ECB?