Several factors have adversly influenced confidence in the past few years: large increases in commodity prices, notably oil prices, and geopolitical tensions; the pressures of global competition; uncertainty and the short-term impact of certain reforms to modernise the welfare state and prepare social security systems for population ageing; and – last, but by no means least – uncertainty about the current and future stance of fiscal policies in many euro area countries.
If we can agree on this diagnosis of the reasons for low growth in Europe, the elements of a remedy are already emerging. The Lisbon agenda – especially after its recent refinement and refocusing, which the ECB strongly supports – addresses many of the structural weaknesses of the euro area economy.