Naturally, there is no upward pressure on prices when the output gap is negative, so inflation is expected to continue to be relatively weak for the time being. B. Outlook For the inflation rate to turn positive, it is necessary that the economy recover steadily and the output gap return to positive territory.
According to Eurostat data, public interventions in support of financial institutions, such as direct recapitalizations, overall fiscal support measures and the nationalization of banks, are reflected in a cumulative 5 %-of-GDP increase in the national debt of euro area countries until 2013. However, this link between weak sovereigns and weak banks works both ways.