These lower import prices are apparently already making domestic producers hesitant to raise their own prices for fear of losing market share, further contributing to the restraint on overall prices. Lesser demands for raw materials on the part of Asian economies as their activity slows should help to keep world commodity prices denominated in dollars in check.
First, I would like to briefly review some key elements of the institutional framework governing monetary and fiscal policy in European Monetary Union. Thereby, I will point to the root causes of the sovereign debt crisis but also to the considerable progress made more recently in putting fiscal governance on more solid footing.