This economic performance evidently led investors to become complacent about economic risks – for example, the risk that house prices could fall, and the small probability of a major downturn in the economy. Moreover, persistently modest inflation gradually reduced inflation expectations, which brought down nominal interest rates.
A deeper venture capital market (together with progress in developing a single pan-European market for digital products) could support the development of the tech ecosystem in the euro area, underlining the importance of capital markets union and the Single Market for goods and services.