This also holds for countries in the euro area, such as the Netherlands, which are performing relatively well. Inflation is on the high side, especially relatively speaking, and it is still too early to put the theoretical books on the economic cycle away on the shelves forever. However, I do not want to sound pessimistic. Europe can become a dynamic economy. What is needed is the comprehensive administration of by now well-known prescriptions to get rid of old illnesses and to avoid old mistakes.
Policy creates the conditions, but real growth has to come from entrepreneurial activities.
I should like to deal with monetary policy first, and subsequently with the other economic policy needed to allow Europe to use the potential which it certainly has. The euro is not and cannot be a cure for all of European problems. In particular, the introduction of the euro will not by itself solve the unemployment problem and automatically increase growth. The single monetary policy can provide a sound basis for economic growth and employment, but the degree to which the economic potential of the euro is realised depends first and foremost on accompanying stability-oriented fiscal and appropriate labour market policies. Let me start by elaborating on the role of monetary policy.