The growth in loans to non-financial corporations has also picked up over recent months. As a result of the persistently strong growth in M3 over the past few years, there remains substantially more liquidity in the euro area than is needed to finance non-inflationary growth. This could pose risks to price stability over the medium term.
In addition, persistently high excess liquidity and strong credit growth could also become a source of unsustainable asset price increases, particularly in property markets. Such developments need to be monitored carefully. I would now like to make a few remarks on fiscal policies. Many governments are currently in the process of finalising their 2005 budgets.