Together, this would raise employment and the potential growth rate of an economy. The immense importance of this issue is increasingly appreciated by the EU and European governments, with the Netherlands being one of the forerunners in the area of ‘better regulation’. A brief look at numbers shows the potential for the euro area.
With regard to prices, wholesale prices are on a downtrend, and consumer prices are lowering below the previous year’s level. With respect to the outlook, the downward pressure from domestic factors is unlikely to weaken considerably reflecting the already large output gap, despite the expected effects of the comprehensive economic stimulus package. Hence, prices are likely to be weak for some time.