At the same time, downside risks to growth, notably related to the threat of protectionism and the rise in trade tensions, remain prominent. The outlook for US monetary policy moves and vulnerabilities in emerging markets add to the overall uncertainty, as does the limited progress on the Brexit discussion.
Solidifying the institutional architecture of EMU is essential in order to foster cohesive economic performance without fragmentation or excessive imbalances. Monetary policy has played the key role since the financial crisis but cannot remain the only game in town. We now need action in other policy areas – notably fiscal policy and structural reforms.