Nonetheless, we share the concerns about the prospects for the global economy. If we judged that shocks were sufficiently severe and persistent to weaken the inflation outlook for the euro area, we would not hesitate to act. How much of its growth potential did the euro area lose during the crisis?
The potential had already weakened before the onset of the crisis, because productivity growth had slowed down. The crisis then made everything even worse, so today the euro area is on a much lower growth path. But monetary policy cannot change that. Monetary policy can only cushion the problem by, for example, making liquidity available and thereby helping to avoid a banking crisis.