On balance, taking into account the possibility that we are already slightly below NAIRU and historical precedent, I have slightly greater concern that inflation will increase than that the economy will lapse into persistent below trend growth and face rising unemployment and further disinflation.
A concerted effort from governments to complete our economic and monetary union is therefore essential. This does not require a choice between extreme options. Some observers have argued that long-term stability requires a return to the original Maastricht framework. Others have suggested that we need a full federation, a United States of Europe. In my view, neither approach is necessary.