Although it is difficult to quantify this effect with precision, it provides only a partial explanation for the persistent inflation differentials that exist in the euro area. In any case, this effect is a transitory one. It is part of what I have called the adjustment mechanism - in this case, the adjustment to a higher standard of living.
Other factors contributing to the inflation differentials within the euro area, including misaligned fiscal policies, wage dynamics not linked to productivity developments and structural inefficiencies such as rigidities in product and factors markets, are not so benign. Redressing these problems, as you know, is not within the domain of monetary policy.