Beyond the short term, changes in administered prices and indirect taxes are expected to affect inflation significantly in 2007 and a further upward impact may also be expected from the indirect effects of past oil price increases.
This was one of the major reasons for doubts as to the likely success of the Programme at the outset. The new and more onerous capital requirements that were set for the banks gave rise to a government cash injection as high as the € billion projected by the Troika staff.