Policy in the euro area is characterised by the lack of a common approach, given that the ECB is willing to proceed, if necessary, with further monetary policy easing and has called on those governments that have room for manoeuvre to loosen their fiscal policies.
By contrast, Germany is set against US-style quantitative easing and urges continued budgetary discipline… Given the latest indicators, we face the risk of a self-fulfilling loss of momentum in euro area growth. The European Commission just marked down its growth forecast. There is a need for forceful and consistent action on all three fronts: monetary, fiscal and structural policies.