Overall, the Governing Council confirmed its previous assessment of a favourable outlook for price stability in the euro area over the medium term. Against this background, we concluded that the current stance of monetary policy remains appropriate. The key ECB interest rates have therefore been left unchanged at their low levels. Our monetary policy stance provides support to the economic recovery in the euro area. We will continue to monitor carefully all developments that could affect our assessment of risks to price stability over the medium term.
Let me now turn to the details of our economic analysis. According to Eurostat, in the fourth quarter of 2003 real GDP in the euro area grew by 0.3% quarter on quarter, following growth of 0.4% in the third quarter. These data confirm that a gradual recovery in economic activity in the euro area took place in the second half of 2003. More recent indicators point to moderate economic growth also in early 2004. While growth has been relatively modest so far, both external and domestic factors give reason to expect a strengthening of the recovery through 2004 and beyond.
On the external side, all recent indications confirm that global economic growth in 2004 will be robust and broadly based across different regions of the world. Overall, euro area exports should grow significantly this year and next.
On the domestic side, the conditions for a recovery in private demand are in place. Over recent months there have been signs of a stabilisation in investment. According to Eurostat, fixed capital investment grew again in the last quarter of 2003, after recording three successive quarter-on-quarter declines. Corporate earnings have generally improved in the euro area, following a protracted restructuring of corporate balance sheets over the last few years. The financing conditions faced by corporations in the euro area are very favourable at present. All of these factors should support a further recovery in investment.
There are also reasons to expect a gradual increase in consumption growth during this year, following the subdued developments of last year. In the short term, growth in real disposable income is supported by lower import prices and tax cuts, while later on the gradual improvement in labour market conditions should become an additional factor supporting income growth and confidence. The financial situation of households in the euro area is sound, not least in comparison with a number of other industrial economies, and there is no financial impediment to a pick-up in private consumption.
For all these reasons, our main scenario of a continued gradual recovery in the course of 2004 and 2005 remains valid. This view is shared by available forecasts and projections, and is also broadly reflected in financial market developments.
We continue to see the risks to this scenario as broadly balanced. However, there are uncertainties related to euro area private consumption and the persistent imbalances in some regions of the world and their potential repercussions on the sustainability of global economic growth.
Turning to price developments, according to the Eurostat flash estimate, the annual HICP inflation rate declined to 1.6% in February 2004, from 1.9% in January. This fall was mainly due to base effects stemming from energy prices, as a sharp increase in oil prices which occurred in early 2003 dropped out of the calculation of the annual rate in February 2004. Over the coming months, volatility in annual inflation rates is likely to be observed, mainly due to further base effects from energy prices as well as to increases in indirect taxes. Related to this, annual inflation rates are likely to edge up again temporarily in the second quarter of 2004.
Looking beyond short-term fluctuations in the most volatile components of the HICP, we expect inflation to remain in line with price stability. At the current juncture, we see little upward pressure on inflation. Given the anticipated gradual nature of the recovery in economic activity and the high level of unemployment in the euro area, wage developments should remain moderate.
While our assessment is in line with available forecasts and projections, we are aware of the conditional nature of such exercises. We will therefore continue to monitor all indicators closely. Inflation expectations, in particular, deserve close attention.
Turning to the monetary analysis, M3 growth has moderated over recent months. However, it appears that the reallocation of economic agents ' portfolios into longer-term assets is proceeding rather cautiously. In this respect, the generally low level of interest rates continues to support the demand for liquid assets. The low level of interest rates also supports the growth of loans to the private sector.
The high liquidity in the euro area needs to be assessed with caution. Its effects on inflation over the medium term will greatly depend on the extent and pace of the future reversal of past portfolio shifts and on the future strength of economic growth. Should excess liquidity persist, it could lead to inflationary pressures over the medium term.
To sum up, the economic analysis continues to indicate that the main scenario for price developments in the coming years is in line with price stability. Cross-checking with the monetary analysis does not alter this picture for the time being.
With regard to fiscal policies, we noted the progress in fiscal consolidation envisaged in countries ' stability programmes. Nonetheless, there continues to be reason for concern. In some countries, contrary to their commitments, adjustment efforts are insufficient to mitigate the risk of excessive deficits. Moreover, several countries do not plan to attain sound budgetary positions by the end of their respective programme horizons, despite favourable growth prospects. This would risk a repetition of the policy errors of the last economic upswing, when insufficient consolidation efforts and tax cuts without adequate expenditure restraint laid the foundations for the recent fiscal difficulties.
All countries would benefit from the strengthening of the sustainability of their public finances, especially in the expected upward phase of the cycle, by eliminating imbalances over the coming years and avoiding or correcting as soon as possible excessive deficits. Moreover, the determined implementation of comprehensive structural reforms, on both the expenditure side and the revenue side, will bring additional medium-term rewards in the form of higher growth and more sustainable public finances. Such consolidation and reform strategies are needed to secure a sound macroeconomic environment in the euro area.
The euro area also requires further structural reforms in financial, product and labour markets. The Lisbon Strategy provides the appropriate blueprint for progress. We welcome that the forthcoming spring meeting of the European Council is set to give renewed impetus to the Lisbon agenda, speed up the pace of reforms, and strengthen the effectiveness of the decision-making process. Structural reforms will have enormous benefits for the citizens of the euro area. These reforms are crucial for sustained non-inflationary growth and employment, and they are therefore also important for maintaining social cohesion in the long run.
Confidence among European citizens in the future is vital for a stronger economic recovery and sustained growth. The Governing Council recognises that the still low level of consumer confidence is related to prevailing uncertainties, including the debate about the appropriate path for structural reforms in many countries of the euro area. It is also partly linked to the continued perception by European citizens of higher inflation than measured by official indices.
The Governing Council notes that inflation is now back at a level consistent with price stability. The European public can rest assured about our determination to preserve the purchasing power of our money in the years to come and thus make our contribution to enhance confidence in the future. Stable prices, together with further progress in the implementation of necessary structural reforms, are the key to stronger confidence, and they create the conditions for increased consumption and investment and thus for growth and job creation.
Question: Mr President, you mentioned that you are expecting a gradual recovery in 2004 and 2005. Does that mean that you have downgraded the economic forecasts or staff projections as you possibly want to call them?
Trichet: No, I would say that we are not downgrading anything. We see the recovery as being gradual. And we said that already ; there is nothing new in this observation that there is a gradual recovery under way. So, there is nothing new there.
Question: We note that you have dropped the reference to excess volatility in the exchange markets. Does that mean you are no longer concerned that there is excessive volatility at this moment?
Trichet: No, not at all. We have made very clear what our sentiments in this respect are. We have made it very clear at the level of the Governing Council and we made it very clear in signing the Boca Raton Communiqué. So, you should not read anything into that. We stick totally to what we have already said in this domain.
Question: Sorry, I did not understand if you are still concerned. Could you tell us, please? Then, I did not understand: there was a question about growth and your possible revision of growth projections. Did you also revise downwards your projections for inflation? Economists are saying that in 2005 inflation will come down to 1.3%, 1.5%. Is this correct? And a third question. Some economists are saying that it is not correct to be concerned about the US deficit because one should take into consideration the dollar area, meaning not only the US but also the Chinese and the Asian area. Do you agree with that?
Trichet: First of all, on inflation. As you know, we are reflecting permanently. We have studies which are made by the staff. We do not publish them. You know that pretty well because I have seen this in all the articles which were written on this particular point. All I can say is that we are in full agreement with the sentiment that our definition of price stability will be reached. We are observing, as we say, a certain volatility, up and down, of yearly inflation on a month-to-month basis. We are happy to see the present level of inflation. We know that it will increase on account of base effects over the months to come, perhaps. We think it will not be a cause for alarm. And we firmly believe that we have inflation under control and that our definition of price stability is being reached. We know that it is important to say that to the European citizens, we know that some of them are afraid that price stability will not be ensured in the years to come. We tell them that they can have confidence. We are here precisely to reinforce their confidence. The Governing Council is the guardian of the currency, the guardian of price stability. They can have confidence. And, in our opinion, it is time for those citizens who are exercising a kind of self-restraint as regards consumption or investment to invest and to consume. This is very important and, as you can see, it is one of the important messages of today 's Governing Council deliberations. As regards the deficit of the United States of America, we have said that it is part of an overall savings issue in the United States of America. And it is, of course, for the US to look at it in the most appropriate manner possible. It was one of our conclusions in Boca Raton, and we have already said -- and I have already said myself -- that the US government has said that they are taking steps to progressively diminish their public finance deficits over time. A clear public declaration was made to this effect by the Secretary of the Treasury.
Question:... is it possible to consider the dollar area as a whole, i.e. putting also the deficits of the different areas together?
Trichet: No, you mean the external surpluses and deficits?
Question: No. Chinese and Asian, for instance. Because they are part of the dollar area...
Trichet: No, as you know, in Boca Raton we achieved a consensus on some messages ; I do not want to go back to what has been said already because it would be a repetition, but it was pretty clear that there was a consensus among the participating authorities in the Boca Raton G7 / G8 negotiations. We said very clearly that for some areas in the world there was probably a good reason for a certain re-balancing.
Question: Would it in your opinion encourage the confidence of euro zone consumers if they knew for example what the ECB staff economic projections are every quarter? And can you tell us please why the ECB releases this information in June and December, but not in March and September?
Trichet: Well, we have already said this quite a lot of times. It was not at all the tradition of any of the national central banks in Europe to consider that they had, more or less, to tell the markets that they were forecasters. The tradition was to consider that they had to look at all forecasts and to take their decisions according to all that was available, but not to put themselves in the position of a forecasting institution. So we decided, after due and appropriate discussion with the European Parliament in particular, to embark on the publications you mentioned, and I think this is something which has been appreciated. I can not say anything more, as the Governing Council has considered that it is not appropriate to go beyond that. We will, of course, reflect on this point. I would also like to remind you that, while a lot of work is done by our staff, of course, and we consider this very important, we also look at everything that is available on the market, everything that the international institutions are working on, everything that the European institutions are working on, and we also look at everything the private sector does. We take all of these things into account when we make our decisions. We know that we are in an uncertain universe and that we have to go through all detailed scientific analysis and then make our own judgement. I mentioned" en passant '' a moment ago that we have to remain alert, to continue to incorporate new information, new data, new evidence, including hard evidence, and this is of course very important for the Governing Council.
Question: Two questions. One, as far as I understand the European Central Bank is supposed to be the key spokesperson for the euro, but over the last few weeks there has been a lot of noise from finance ministers and Heads of State. Schröder was in Washington and talked to Bush about the euro -- does this bother you in any way as Mr Euro? The other question I have is, given that you are happy with the outlook for inflation and that you have now termed the outlook for inflation" favourable '', this must mean that there was some talk at today 's meeting of possibly cutting interest rates?
Trichet: Ok, first question. We have a system which is very clear. The Governing Council of the European Central Bank takes a number of decisions. The President of the ECB is the" porte-parole '', or spokesperson, of the institution, which has the unique and extraordinary responsibility of having to run a monetary policy, a single monetary policy, for 306 million citizens belonging to 12 different economies and countries. On the side of the executive branches, we have an organisation called the" Eurogroup '', which is the college of the 12 ministers of finance of these countries, the members of the euro area, and we have the President of the Eurogroup, which is currently Charlie McCreevy, the Irish minister of finance, and we also have the Commission, of course. So, the equivalent of the executive branch is the combination of the Eurogroup, with Charlie McCreevy, and the role of Pedro Solbes and the Commission. We have an organised system, and when we were together in the United States for the Boca Raton meeting I was, if you like, the equivalent, the friendly partner, of Alan Greenspan, and Charlie McCreevy was opposite Secretary Snow. That 's the organisation of Europe, and I believe that it is a good organisation. When we had to discuss very important questions, we did so in this format in a very expeditious and fruitful way with our US friends. You can see in the results of our discussion in Boca Raton a number of elements which perhaps give evidence of the fact that we had a fruitful and friendly meeting with results. The second part of your question was...
Question: My question was, given that you say that you are now happy with inflation and you are once again using the word" favourable '' in describing the outlook, you must have talked about rate cuts at today 's meeting.
Trichet: At each meeting, as you know, we have to understand what is the overall concept of the Governing Council. I would say that we are firm, we are committed, we are pragmatic and we try to be confidence-inspiring. We are firm in our strategy, that is clear. We are committed as regards our goal of price stability, as I said. We examine the situation every month, and every month each member of the Governing Council rightly considers that we have to discuss the full context of the situation, including all data and analyses, with the possibility of concluding in any direction. So, I can not help but say that this was certainly the case today, as it will be the case next month. We are pragmatic, we are realistic and we examine the overall situation with a high degree of pragmatism. And we try to be confidence-inspiring, as I say, we believe this to be very important. Confidence is perhaps the ingredient which is still a little bit lacking in some constituencies, particularly in the household constituency, in the consumer constituency. We believe that perhaps perceived inflation or the absence of sufficient confidence in price stability play a dampening role in this respect. We feel it is our responsibility to tell the citizens, our fellow citizens, you can have confidence, we are here, the situation is under control, perhaps more so than you think. It is time for you, if you wish and if you are hampered only by these fears, it is time for you to consume, it is time for you to invest.
Question: Two days ago Commissioner Monti announced that there is an anomaly vis-à-vis the Banca d'Italia with the rest of Europe because of its power over all anti-trust matters in the banking sector and because the mandate of the Governor does not expire. Do you share his view? Is the Banca d'Italia an anomaly? Are you in favour of this situation being changed?
Trichet: I do not share this view. We did not discuss that in the Governing Council and I can only tell you that I do not share this view.
Question: Mr President, there was some speculation last week that the ECB might have intervened in the currency markets. I remember that your predecessor, Mr Duisenberg, once said that if you were to intervene you would intervene first and tell us afterwards. Does the ECB still stick to this dogma that the public will only be informed once the ECB has intervened? And I have a second question about all the advice you have received over the last few weeks from politicians. How helpful is this advice or was it at your meeting today?
Trichet: Taking the first question, I have mentioned a number of times that I never comment on market rumours. If I were to start commenting on market rumours it would be, of course, endless. Second, when we have something that we deem appropriate to say, we say it. That is for the first question. For the second question I would say that we hear and we listen -- or I hear and I listen - and I know the Treaty. The general feeling in Europe, taking into account public opinion, is that we have to take our decision in full independence, meaning that we should not do something because we are told to do something. And that we should not do something because we are told to do the contrary. Namely, we should not be influenced in either direction. Frankly speaking, it is not that easy. But it is the strong belief of the entire Governing Council that we should not be influenced in any direction. So you can trust us to have looked at today 's case on the basis of the situation today, as I have explained, as thoroughly as possible. And we will examine the situation next month in exactly the same frame of mind. Whatever is said, we are not to be influenced -- either positively or negatively.
Question: Just picking up on what you were talking about just there. Would you find your job easier if European politicians, with the exception of Charlie McCreevy, were to stop talking about the euro for the next few months? And, secondly, do you think that one reason why people ignore your constant pleas to spend more money is because they are afraid they might lose their jobs? In view of today 's unemployment figures in Germany, what exactly can you tell people to reassure them that they have nothing to fear on that account?
Trichet: First of all, taking the first remark you made, I should mention that Charlie McCreevy is not isolated. There is a large, indeed a very large constituency which would have exactly the same attitude as that of the President of the Eurogroup. On the second point, I think, of course -- and we have said this very clearly -- that confidence is made up of a great number of elements. Undoubtedly there is the recovery and the cycle and the labour market figures which all play their part in contributing to the present level of confidence in the household constituency. That is a very important point and is always something difficult in the cycle because it is some kind of pro-cyclical element which is in-built in the functioning of any society. Then, of course, there is public opinion regarding structural reforms. What we believe in is that when a government embarks upon bold and courageous structural reforms, as has been the case of a number of governments, it is good for everybody, for the full body of society. It is much better than to close our eyes and do nothing. And it is, perhaps, our duty to explain that and tell the general public that, because we are undertaking a reform, it should improve confidence, as it is something which benefits everyone. And, again, a pedagogical explanation is certainly very important in that respect. Furthermore, we have the feeling, which exists in a number of households, that with the situation differing from one economy to another, perceived inflation is higher than it is in reality and that future inflation might be higher than we trust it will be. And there, of course, we are in our own sphere of competence, we have the authority because we are responsible and fully accept this responsibility. Then we tell those households that if your confidence is hampered because you have that fear, you should not have that fear: you should trust us, you can have confidence in us.
Question: I think this would be a question for Mr Papademos. By the end of this month, as far as I know, the model for reforming the voting rules for the ECB Governing Council has to be ratified by 15 countries. Would you kindly tell us how far this process has proceeded, or will it be concluded in time? Are you optimistic, are you not, what is the state of events?
Papademos: It is a fact that, up till now, a number of countries have not yet ratified the change in the voting rules. But I believe that on the whole the prospects are good, that this ratification will be concluded on time, before the end of the month. We can not be certain, of course, but I think on the whole the prospects are positive that this will be done on time.
Question: Mr Trichet, is it too early to congratulate the ECB now on achieving your price stability goal for the full year 2004? You reached a level that you consider equivalent to price stability already in January, below 2% annual inflation rate. Inflation has slowed again now, we have the full pass-through of the euro 's appreciation that still has to occur. I was looking at the phrase in your statement:" At the current juncture we see little upward pressure on inflation ''. What is the chance that a real disinflationary trend is going to be setting in this year? That inflation will, in fact, be lower than your definition of" below, but close to 2% ''?
Trichet: Well again, when we take a decision today, it is with an eye on what will be the situation within 18 months, two years. We are always thinking about the medium term. We have also a concept of monetary policy which is very important for anchoring long-term expectations and we have said that since the very beginning. One of the reasons why we are cross-checking the economic analysis with the monetary analysis is that it helps to anchor long-term expectations of inflation. This is very important, in turn, to permit a very low level of market interest rates, not only over the short term, but over the medium and long term, two years, five years, ten years, thirty years... This is part of the overall financial environment in Europe today which is, of course, very favourable and contributes to growth and job creation. That being said, we should never congratulate -LSB- ourselves -RSB-. We will see at the end of the year what will be the overall result. We are confident in the medium run, we have to remain as vigilant, alert and pragmatic as possible. But it is clear that if the Governing Council decides to pass on that message of confidence to households, it is with some good reasons, I trust.
Question: I have a question on a statement of Mr Greenspan. He recently commented on the Japanese intervention policy as an unsustainable one. Do you share his opinion? And what do you think about the recent development after the Boca Raton statement in this context?
Trichet: Well, I 'll let the Japanese central bank be responsible for its policy and I would only say that Alan produced a very interesting speech recently, very interesting.
Question: What is the policy of the Governing Council regarding the successor to Mr Domingo Solans? Should he or she be from a small country or a bigger country? Or should he or she only be competent and good at doing the job?
Trichet: I would say, on Eugenio, that we see him leaving the Executive Board with a sentiment of great, great, great appreciation. His contribution has been fantastic for this institution, and it is a sentiment that I would like to express, if the Vice-President permits, on behalf of both of us and of the full body of the Executive Board and certainly the full body of the Governing Council. I have no remark other than to say that what is very important in our domain is qualification. Qualification for the Executive Board and for the Governing Council. At our level, with our responsibility and considering all elements, this is absolutely key. The rest is in the realm of those who are taking this decision, namely the EU Council, taking into account that there is a sentiment to be expressed by the Parliament and that there is advice to be provided by the Governing Council of the ECB. The decisions are taken after those two pieces of advice have been given.
Question: I have a simple question on your strategy. Last May you had a re-launch of the strategy aimed at better communications. But now I see some problems. If the inflation rate is closer to 1.5% than to 2%, and the potential rate is not covered by the real growth rate, one has the impression of a neglect of the money supply, of excessive liquidity. How can you make better communications with the new, re-launched strategy?
Trichet: I am sorry, are you concluding that we should increase rates or decrease rates?
Question: That is your business.
Trichet: That is kind of you, sir. As you have mentioned yourself, we have a great number of indicators, and we have a great number of indicators which are volatile. Perhaps one day you will tell me: inflation is at this level, you should do this. And then next month, or two months afterwards, you say: inflation is at that level, you should do that. And then it is back to this level. So of course our reasoning, as I said, is based on a vision of the medium term and long term and we have, of course, a must -- an absolute must for us -- which is to be credible vis-à-vis all observers, savers, investors and public opinion that we will deliver, over time, price stability. You are like us, you see one day that indicator x is up, the next day or the next month it is down, and then up again and down. We have to make a judgement on what is the real situation and not be the prisoner of a day-to-day evolution, which is necessarily erratic. We have a low level of inflation, according to the last statistics. We know in advance that for statistical reasons it will go up again, and then perhaps you will say: today you should do this, and tomorrow you should do that. So we have to take everything into consideration and not only the early indicators that are related to, for instance, the economic cycle and the last indication we have of domestic demand, but also all indicators of inflation and what could happen as far as inflation is concerned. We have the cross-checking -- you have been mentioning it -- with the monetary development, and I said that it is important in a long-term perspective. We take all that, we make our judgement. I explained in four pages what our judgement was. There is no other central bank, we are the only one -- I draw your attention to that -- which immediately after having considered the situation, and under the observation of the full body of European and global observers and journalists, produces its own assessment of the situation and asks the Vice-President and the President to appear in front of you and to respond as candidly as possible to the questions on the decision which has just been taken. I do not mean that we should be particularly proud, but that is transparency.
Question: Did the Governing Council today discuss a possible interest rate cut?
Trichet: I think I already responded to the question ; we were open and when we met we discussed the situation without any prejudice.
Question: I have two questions. First of all, what is your comment on the fact that Horst Köhler, banker and economist, and thus a technocrat, will most probably become the next President of the German Federal Republic -- which is a very delicate political role? And second, what is your opinion on the discussion on the effective level of Italian public debt which occurred in the last days between the Italian Treasury and the Italian central bank?
Trichet: On the first point, I do n't want to intrude into the decision-making process of the great country in which we are living. So I do not want to be interpreted in any respect in political terms. I will only mention that I had the great privilege to negotiate with Horst. He was the Staatssekretär for Germany, I was the Under-Secretary of the Treasury for France and we negotiated together the Maastricht Treaty. He is a friend and I have for him an immense appreciation, I mean an immense professional appreciation, and, well, that is what I wanted to say. As far as Italy is concerned, I have nothing to add to what we already said. You are referring to the previous discussion between the Banca d'Italia on the relationship with the Treasury? Is that right? There is nothing new in your question. Is it a new thing? If it is a new thing, I do n't want to comment in any respect because we have to look at it.
Question: Mr President, you talk about growth rates in the euro area, which you assume will strengthen over the course of this year and next year. Still, the growth rates and the growth momentum in Japan in the US are quite higher than here, but the interest rates, the central bank interest rates, are higher here than everywhere else. So how come? Could you please comment on that?
Trichet: My comment would be that it is not true to say that rates are higher here than anywhere else. You just cross the Channel and you have interest rates which are twice as high as they are here. Interest rates in London are at 4%. They are 2% here and 2% is the lowest level practically since World War II. And in some countries it is a level which was unthinkable only a few years ago. So, we are in a situation where we have an environment which is certainly favourable to growth in financial terms, and as far as market interest rates are concerned every economy acts according to its own situation. We do that as far as we can ; here and there are criticisms, I can not deny that. Some criticisms implicitly go in the direction: you should be perhaps a little bit less orthodox, quote unquote. Others that have come recently, the CEPR, for instance, made very interesting analysis signed by four or -- if I am not mistaken -- five very brilliant academics and they say: well, this European Central Bank looks a little bit loose in its policy, they did n't deliver price stability, they should be more responsible. In my view really, both criticisms are not justified. I have the strong sentiment that we have done exactly what was appropriate in the circumstances where we were and I am convinced that it is being exactly as appropriate as we can be, that we can improve confidence as I said. It is very important to consider that it is not liquidity that is lacking in Europe today, it is not capital that is lacking in Europe today, it is not savings that are lacking in Europe today, and certainly not men and women of great quality. It is a little bit of confidence that is lacking and one of the ways we have to improve confidence is to say, well, there is an ECB, it is there, you can be sure that your purchasing power will be protected over time, not only today or tomorrow, but over time. Then you can adopt, perhaps I would say, a more positive attitude as regards consumption and investment. That being said, we are not alone, that being said, it is true that there are structural impediments to growth in Europe. We all agree on that. There is not a single element of difference between the executive branches and the ECB as regards the necessity of embarking on structural reforms. We all agree, we all would underwrite the Lisbon Agenda and, as I said, we welcome what has been decided in order to improve the situation in this respect. We back the governments that have embarked on those reforms and we try to help and to explain why it is good.
Question: Mr Trichet, only 57 days away from EU enlargement and all of the new countries are not going to become part of the eurozone, at least not immediately. Certainly, you must be concerned about the impacts that this will have on the eurozone in terms of the in - and outflows of capital, goods and services as well individuals looking for employment. How much time are you devoting in your meetings to this issue, given that we 're coming up to such a critical juncture in the EU 's expansion and European history?
Trichet: I think that at the present juncture we are spending a lot of time. If I take into account all the reflections on this matter by the Governing Council, I would say that perhaps we are devoting right now in between a quarter or a third of our time to the enlargement issue, so as to gain a better understanding of the situation of each of these particular countries. The overall attitude is an attitude of pride because it is a fantastic historical event, an attitude of optimism because it is a major contribution to growth all over Europe to have -- if I am not mistaken -- around 75 million newcomers and ten new countries. The Governors have been invited to attend the General Council meetings. We invite the experts from the various national banks concerned to be present when we have ESCB committee meetings and we are trying to understand each case. Because we are also absolutely convinced that we have to analyse the situation case by case. There is not a single economy which resembles another economy. So a lot of time has to be spent to get into the specificities of these countries. But again, I would sum up by saying that we are proud, we are convinced, that it is good for Europe and we are convinced that this is a professional challenge of the first magnitude to be sure that we optimising their integration, including perhaps with appropriate professional preparation for ERM II, for instance, at the present juncture. We think there should not be any hurrying-up -- that would be not be professionally justified. So we have to look again, on a case-by-case basis. But again, it is fantastic really to think that we will efficiently incorporate into the Europe Union ten new countries and 75 million newcomers, new fellow citizens.
Question: You mentioned that there is a slight lack of confidence? Could one reason for that be, just at the beginning of this year, that there has been huge volatility in foreign exchange markets. The euro appreciated very rapidly and then it depreciated rapidly.
Trichet: Everyone already knows what we think on this particular question. We have said here, in this very press conference, two months ago that excessive moves are not necessarily appropriate. So I will not say anything different than that. Everybody can observe what has happened and is happening since then and everybody knows what is our position here. When you look at the evolution after we spoke, you can see that, perhaps, the message has been somewhat incorporated in the behaviour of the market as something important.