However, interaction between monetary and fiscal policy cannot be avoided, even if central banks are independent. [5] The question, then, is not whether but rather how this relationship can be given a smart design that allows price stability to be preserved.
Euro area inflation is expected to remain low for a prolonged period of time. To judge the appropriate policy response, we need to understand the drivers of the low inflation outturns. A significant part of the fall can be explained by global factors.