Wage growth has been a contributing factor to inflation, especially in the service sector, so it is important to get the labor market into better balance to bring future wage growth down to a more sustainable level that will assist in moving overall inflation lower. Let me now turn to the outlook for inflation.
Beyond ERM II membership lies the adoption of the euro, the crowning achievement of the monetary integration process. In order to adopt the euro, non-participating EU Member States have to achieve a high degree of sustainable economic and legal convergence.