Underlying price pressures in Germany by contrast, have remained subdued, as indicated by the rather stable core inflation rate. The increase in house prices may be more of concern, particularly in some of the biggest cities, but there is so far no evidence of broad-based excessive house price valuations in Germany as a whole.
Strong economic growth demonstrates that Germany is the member state that, after Ireland, shows the highest increase in income per person since the beginning of the euro. At the same time, the present unemployment rate is the lowest in the last 37 years and is well below the European average. Challenges ahead Let me summarise.