Progress on the implementation of the Lisbon Agenda was slower than hoped for, and the Lisbon Agenda is not accorded enough importance by observers. I want to argue today that things are not really that bad. •  Europe has very successfully managed to achieve economic convergence among its present 15 Member States.
Given this, when prospects for a sustainable improvement in economic activity are widely acknowledged in view of efforts to strengthen the foundations for economic growth and the spread of policy effects, people expect a rise in prices based on the relationship between economic activity and prices at a future point in time – in other words, inflation expectations will rise.