Of course they do need additional capital to move forward, but, as has happened in the US and elsewhere, the government’s capital injections of last year into these two institutions looks like being well-remunerated. This takes account of the low prices being paid – much lower than originally envisaged – for the loans being transferred to NAMA.
As regards fiscal policy, first indications confirm that fiscal developments in the euro area were relatively favourable in 2006 on the back of strong output growth and revenue windfalls.