Reforms span product and labour markets, and as regards financial integration the measures listed in the Financial Services Action Plan (FSAP), the launch of TARGET2, the establishment of the Single Euro Payment Area (SEPA), the initiatives to further integration in the Mortgage Credit Market in the EU, and others. This is in fact vital to enhance the success of EMU.
That which exists, however, suggests implausibly high estimates of near-rational behaviour when inflation is at 3 per cent.32 In summary, there is little substantive evidence to suggest that downward nominal wage rigidity or near-rationality in wage-setting impedes appropriate adjustment at our currently targeted inflation rate of 2 per cent.