We need a fiscal instrument of the sort proposed by President Macron a few years ago. An instrument that has the capacity to act countercyclically and that complements monetary policy. But it’s something you were already asking for when you were a minister, and it’s not happening now, and even in the best of cases it won’t happen for another four or five years. And without that level of firepower… We have to call for it because it is sensible. It is not a question of whether it is possible, but rather one of reality. It would be very important for the entire euro area and I am convinced that it will come about sooner rather than later. What are your thoughts on the Spanish economy? The Spanish economy is doing well. It is competitive and enjoying above-average growth, and that is the result of the reforms in 2012 and 2013 and society’s efforts. It is doing well, that’s the truth. It has been affected by the economic slowdown, like the rest of the euro area, but growth is still at 2%. Why? The financial sector was cleaned up, and the economy is now competitive. Those are the two reasons why it is doing better. Spain didn’t have any issues during the growth phase of the cycle. But now we are maybe seeing the effects of not having made any reforms in recent years, deferred budgets, or adjusted deficits during growth periods. My recommendation is for the euro area as a whole, not just for Spain.
CPIF close to 2 per cent at the end of the forecast period With regard to inflation measured in terms of the consumer price index, CPI, future developments will be affected by the rise in interest rates, or rather by the increase in households’ mortgage interest expenditure. This is clearly visible if one looks at the same time at CPIF inflation, which quite simply is CPI inflation with a fixed mortgage rate. The CPIF is thus not directly affected by changes in mortgage rates, which means that these measures differ quite considerably over the coming years, although they approach one another further ahead. Both CPI and CPIF inflation rose in the months prior to the publication of the Monetary Policy Report (Figure 9). This was mainly due to rising energy prices, but also to weak productivity growth and to the previous year’s weaker exchange rate having a delayed impact. However, data published two weeks ago show that both the CPI and the CPIF fell in January. During 2010 CPIF inflation is expected to fall, primarily as a result of companies’ costs falling and the krona strengthening, which is expected to make imports cheaper. The rate of increase in the CPIF will rise from 2012 and onwards as economic activity improves and companies’ costs begin to rise again. At the end of the forecast period, we expect inflation measured in terms of the CPIF to be close to 2 per cent. However, CPI inflation is expected to continue to rise.