Let me first talk about the course that the novel coronavirus (COVID-19) is taking, which currently has a significant impact on economic developments. Chart 1 shows that the number of confirmed new cases has been on an increasing trend again since July 2021, although it turned down after rising through early spring.
Procyclical public investment made the task of the ECB more difficult when confronted with too low domestic demand after the sovereign debt crisis. And structurally low public investment levels undermined domestic resilience to imported supply shocks, amplifying their stagflationary effects. Similarly, it did not make sense from the perspective of ensuring the implementation of sound fiscal policies.