It should also be considered that, in the context of the favourable prospects for strong economic growth in the euro area, the pass-through of exchange rate changes via import prices is normally facilitated. Overall, for these reasons, HICP inflation is not expected to fall significantly in the near future.
Faced with either variant of such a devastating impact on the system, government authorities often believe they have little choice but to intervene. The government may provide funds or guarantees to the bank in order to keep it functioning.