Europe’s economy: the current situation and the challenges ahead Let me come to the third and final part of my remarks: what are the lessons we have learned from these events? First, our monetary policy strategy has proved to be effective. The quantitative definition of price stability and the medium-term orientation significantly reduce the likelihood of either deflation or inflation scares.
The firm anchoring of inflation expectations – throughout a time of crisis – meant that we could maintain the rate on our refinancing operations at positive levels without having the materialisation of a deflationary risk or of an inflationary threat. Europe’s leaders should recognise that our economic model is in need of a considerable strengthening, especially our system of economic governance.