This has included lowering the key ECB rates to record low levels and adopting a wide range of non-standard monetary policy measures. By contrast, the contribution from fiscal policy to macroeconomic stabilisation in the post-crisis period has been muted at best.
From 2010 to 2012, economies representing around one-third of euro area GDP carried out procyclical fiscal tightening to restore confidence in their public debt, which significantly contributed to the second recession in that period. Since then, fiscal policy has been broadly neutral. At our last meeting, the Governing Council responded to the continued shortfall of inflation with respect to our aim.