The success of the ECB’s monetary policy in delivering price stability and its determination to ensure a firm anchoring of inflation expectations has provided significant support for other European Community objectives, notably favourable financing conditions and macroeconomic stability, which in turn favour investment and sustainable economic expansion.
Most euro area countries have benefited from significantly better financing conditions than in the 1990s, a situation which has supported fiscal consolidation. 2 For instance, in the run-up to Stage Three of EMU, fiscal deficits were considerably reduced, mainly due to falling interest payments, from an average of 5.2% of GDP between 1990 and 1998 to 3.4% between 1999 and 2007.