3  impact of the tax hike are still significant and are considered one of the risks in assessing future economic activity. I will touch on this point again later. Lastly, let me explain developments in government spending.
They also reflect the reintegration of euro area funding markets, against the backdrop of a continuing adjustment effort by participating countries. Falling TARGET2 balances are the best proof that the distributional consequences of non-standard monetary policy measures are unintended and temporary. The role of other economic and financial policies Economic divergences and heterogeneity remain high in the euro area.