The euro has been in existence for two years. In 1999 price increases were very low in the euro area. Last year, inflation slightly exceeded the ceiling of 2% considered by the European Central Bank (ECB) to be compatible with price stability in the medium term.
The increase in inflation last year was mainly due to external influences. Oil prices rose rapidly, while the euro depreciated against major currencies. As these developments took place in a climate of strong economic growth, they could have had implications for price stability in the medium term. As a consequence, there were upward risks to price stability for the greater part of 2000. These were also indicated by monetary developments. Money growth remained well above the reference value of 4½% throughout most of 2000. [...]
