While this is a feature which should not be ignored, since what consumers decide to spend depends on their perceived real income, it is now important to acknowledge that it was a temporary phenomenon, and that during the last year and half the gap between actual and perceived inflation has narrowed significantly.
Notwithstanding the many adverse shocks that hit the euro area in the past years, price stability has prevailed in the euro area. The success of the single currency in delivering price stability and stabilizing inflation expectations in the euro area can be explained by the European institutional framework and the principles followed by the European Central Bank.