Such differences may exist for a number of reasons, reflecting country-specific institutional features, catching-up processes or economic structures that have evolved over time, all of which will still be present in the future. In our view, such differences in real economic developments across euro area countries do not pose a threat to the single monetary policy.
After all, the same phenomenon can be observed between different parts of any given country. Regarding price developments, some cross-country differences are difficult to avoid, for instance, those which relate to catching-up processes or to indirect tax changes.