Realities and complications facing monetary policy  In evaluating the effectiveness of the monetary stance on inflation there is need to recognize some economic realities and complications which eventually help in developing an appropriate policy response.
Changes in the external environment have weakened the prospects for global economic growth, and uncertainty about the economic outlook, notably for the United States and Japan, remains high. Although the euro area is a large and relatively closed economy, some effects of the slowdown in the global economy will be felt.