In addition, long-term growth perspectives for the euro area will benefit if governments intensify their efforts to progress along the path of fiscal consolidation. I consider that budgetary plans recently expressed in countries' updated stability programmes are not very ambitious as tax cuts are not accompanied by appropriate expenditure restraints.
If the macroeconomic environment remains as favourable as expected, the envisaged fiscal policy stance could add to demand pressures. Fiscal policy could, thus, become an additional source of upward risks to price stability. In addition, the stability programmes do not make the necessary progress in addressing long-term fiscal challenges.