Needless to say, if upside risks to price stability were to emerge, the Governing Council would take timely and appropriate action. Fiscal policies in the euro area Let me now to turn to fiscal policies. Budgetary positions in the euro area deteriorated significantly in 2009 as a result of the economic contraction, fiscal policy stimulus and government support measures for the financial sector.
Eurostat’s latest estimates show that the average general government deficit ratio in the euro area increased from 2.0% of GDP in 2008 to 6.3% in 2009. Out of the 16 euro area countries, 13 are already subject to an excessive deficit procedure. This year, all euro area countries are projected to record deficits above 3% of GDP.