List of sentences containing uncertainty words in the answer section, by frequency

{'almost (134)', 'believe (492)'}

And I believe that they are right, as markets almost always are.

I believe that this underestimation of growth prospects is -- I am almost inclined to say -- a worldwide phenomenon.

{'almost (134)', 'exposure (34)'}

So, as I said several times, ELA has increased from zero to almost $ 90 billion, and now the Eurosystem has a total exposure to Greece of about $ 130 billion, which makes the Eurosystem the largest depositor in Greece.

{'almost (134)', 'perhaps (538)'}

Third, once the draft article have been fully implemented the state will be the majority -- and perhaps almost the sole -- shareholder.

But so far, almost a year and a half has passed from the British referendum -- perhaps I am not sure I 'm right -- but about eight months, nine months, yes and we have n't seen yet a consequence.

Of course when we leave with a sense of the work almost done in that respect and that monetary policy, perhaps hopefully in the next few years, will not be as exciting as it has been during the years I spent in the Board.

{'almost (134)', 'probably (249)'}

One thing is almost as certain, namely that we will publish forecasts, probably towards the end of the year.

{'almost (134)', 'risk (3278)'}

Concerning the collateral, on top of all the risk management measures and on top of all the strong over-collateralisation -- which, once you apply these haircuts, reduces the amount of acceptable collateral by almost two-thirds -- to assess the creditworthiness of a credit claim it is essential to know the economy where this credit claim originated.

So if we have taken more risk, we have also made sure that this is going to be very well managed, and the purpose, as I said, is to finance the real economy and especially SMEs, which account for almost 80% of employment.

{'almost (134)', 'seem (653)'}

The euro has depreciated over the last 12 months at a steady, almost continuous pace - there is nothing yo-yo about that - and that trend now seems to have reversed.

{'almost (134)', 'volatility (407)'}

Almost one year ago I said that excess volatility and disorderly movements on exchange markets were undesirable.

{'almost (134)'}

The fact that there are inflation differentials between the various regions in the euro area is - as we have explained many times, and, I am almost inclined to say - normal.

The speed at which it is strengthening is almost equal to the speed at which it declined two years ago.

These are three things that we look at almost every day.

Every day actually, not almost every day !

As I remember, this suggestion was rejected almost unanimously at that time by members of the Eurogroup and of the ECOFIN Council, because the Stability and Growth Pact is an ECOFIN instrument.

I think that, in my job as president, I have been blessed by almost having unanimity on the very important and fundamental decisions that we have taken in the last few months.

It is the Governing Council that, in its almost unanimous decision, has taken this measure.

It shows that it is not only the decision of former lira members or others, it is basically the almost unanimous decision of the Governing Council.

There are countries that are not in a recession, and which are actually almost at full employment, and there are countries that are in a recession.

So, for the time being, we look at all these events on an almost daily basis, and we find things that we did not find the last time.

When the Governing Council decides that the rates will be such and such, they are -- almost by definition -- appropriate.

And the employment figure is even more impressive: euro area employment increased by almost 5 million jobs over the last three and a half years, offsetting virtually all of the employment losses seen over the crisis period.

We are actually seeing a dichotomy between the hard data which, as you said a moment ago, are on average disappointing and a broad indicator of soft data, of survey data, of sentiment data, which almost uniformly are positive.

It is purely inspired by the worsening situation in the bidding process, whereby the last two allotment ratios were less than 1% each, at 0.88% and 0.87% respectively, which made it almost ridiculous.

First of all, all the details, almost all the details of the programme, will come out in the press release at 3.30 p.m. Let me say, it 's hard to assess a figure, to give a figure on this programme as such, because there are several interactions between the ABS programme, the covered bond programme and the TLTRO programme.

I was already very clear when I said that I was almost astonished at what the IMF has done, that is, publish a staff paper on inflation differentials and deflation in the euro area.

Lots of things are happening in almost all countries of the euro area, but admittedly this is too little and often too late in some countries, particularly the larger ones.

For example, the November migration figures show a significant increase in SEPA direct debits, to 26% of total transactions, more than double the October figures, when they had increased by 11.5%, and almost four times the September figures, when it was only 7%.

In response to your second question, the practice for, I would say, almost all, if not all, supervisors in the euro area is the following.

In other words, the corporate bond issuance almost compensates for the fall in credit flows in the last two months of the year.

Thus far, the euro area economy and euro area financial markets have shown a great deal of resilience with respect to these developments -- in a sense, far more resilience than was the case almost a year ago, eight to nine months ago.

We went through this when we had the discussions about Greece almost a year or a year and a half ago.

Our monetary policy will remain accommodative -- do not forget that the EONIA, the very short-term interest rate, is standing at about 7 basis points, or at 6 basis points now, which is almost zero.

And that 's our aim: that growth should pick up in Europe - growth is at different stages in different regions, but almost everywhere it is picking up - and at a favourable pace which does not generate inflationary tensions, because if that were to happen we should be obliged to take measures to curb it later on.

To the critics of the rotation model that we unanimously agreed on in the Governing Council and that we have presented to the European Council in the composition of heads of state and government, well I am almost inclined to say I still have to meet someone, including myself, who is unconditionally happy with the outcome.

It is almost a fact of everyday life in statistical series that there will be revisions and refinements from time to time.

To give you very precise figures, if I look at the loans of up to one year to non-financial corporations, the monthly flow in June 2009 is minus $ 30 billion, which accounts for almost the totality of what we are observing at the level of the total outstanding amount, which is minus $ 35 billion.

The asset quality review and the stress tests are foreseen to be concluded before the ECB takes over the SSM -- which means by almost the end of next year -- and we all, I, the Governing Council, collectively strongly hope that credit will have recovered by then.

To the second question, I would say that over the last few days we received plenty of advice from political figures, from institutions and, almost every day now, on interest rates, on exchange rates but also, on the other side of the scale, on the excess liquidity.

Sharp declines were experienced by PMI, almost all sectors, in retail, sales, manufacturing, services, in construction.

The answer to the first question: we have to see what the exchange of, so far, rhetoric -- almost rhetoric -- about protectionism will produce.

We will come back to that later on when - I am almost inclined to say when the time is right - when actual access to the euro area is about to be negotiated.

And certainly the aim of the ECB, the objective of the ECB and the way price stability has been interpreted by the Governing Council of the ECB all throughout its existence, almost all throughout its existence, is that inflation should go at below but close to 2%, and we are far from that objective.

This is common practice, almost daily practice.

- because that is basically your question - extensively almost every two weeks.

If I reflect on the past year, I am always inclined to reflect on the period since the birth of the euro, i.e. a period of almost two years.

First of all, the downward revisions in inflation: as a matter of fact, very little has changed as far as inflation is concerned, because it was 1.9% in April, if I remember, and we all remember the serious concerns, if not the outcries, that inflation was going up too much, and now it 's 1.4%, and it 's mostly -- actually, almost entirely -- driven by the price of oil and price of foods.

And almost 5 million jobs have been created in the eurozone in the last three and a half years.

With respect to the second question, I kind of answered an almost similar question a moment ago, namely, the programme is running now smoothly and when and if we face problems we 'll use the flexibility that the programme itself embodies.

So, day-to-day movements do not -- almost as a matter of principal -- influence our decisions.

An employment situation which is by and large improving almost everywhere, some countries more than others.

They stressed how this number, seven million, almost seven million jobs in the last four years, it actually continues to increase.

We observe that almost half of the euro bonds are outside the euro area and we also observe that the average weighted price of bonds in the 2 to 30-year maturity is well above par.

We are very proud to have issued the euro as a currency almost 13 years ago.

But we have been using this word for quite some time now, and it is the first time this question is asked, so I take it for granted that almost everybody has understood what it means.

And we also want continuity, we now have a track record of decision-making of almost five years, and it has, in our feeling been a success, that process of decision-making and we want continuity of that process.

The other question, first of all let me say I was surprised that this risk-sharing issue became almost the most important thing about our monetary policy decisions today.

Exports have increased in almost all countries, especially in Germany, Spain and Italy.

Our measures are contributing to raise GDP by almost 1% in the years 2015 to 2017.

But I would say almost all indicators have now stabilised at levels that are above historical averages.

On Spain, it 's I think beyond question, the fact that the Spanish economy is experiencing a strong and an employment-rich recovery, and almost half a million jobs have been created since the end of 2013.

The second piece of good news actually concerns Spain, that Spain has completed almost 90% of its funding programme for the sovereign.

I am almost inclined to say: we continuously ask ourselves the same question.

This is almost too complicated for me.

First of all, as far as structural reforms are concerned, almost day after day and press conference after press conference we urge the people, the social partners and governments of the euro area to continue to carry out and implement further structural reforms in the labour and product markets.

However, there are some countries where such a figure is higher and reaches almost 10%, in the case of Germany.

And the figures, as our statisticians have assured us, are becoming more reliable almost by the day.

Finally, for banks that finance themselves in the interbank market, the EONIA is around 6 -7 basis points, i.e. almost zero.

And this progress is documented by the fact that domestic deposits continue to increase in all the banks of all the stressed countries, or almost all I think.

{'ambiguity (8)'}

It is as simple as that, there is no ambiguity regarding our own monetary policy concept.

So, where monetary policy is at stake, there is absolutely no ambiguity.

And that there is absolutely no ambiguity, we are in a posture of strong vigilance.

{'anomaly (8)', 'perhaps (538)'}

Supply is also playing a role and there are a number of reasons to think that there are also anomalies of a different nature on the supply side, including perhaps geo-strategic elements.

You can perhaps extract the sentiment of the market itself as regards the future evolution of the present market anomalies.

{'anomaly (8)'}

We have anomalies concerning the high level of subsidies, which prevent in a number of economies - not only industrialised but also emerging market economies - the ultimate consumers from taking into account the real price of energy as it is.

So: we take decisions regarding the non-standard measures independently from the decisions that we take in relation to the interest rates to help restoring a more normal transmission of our monetary policy decision, being commensurate with the disruption or anomalies that we are observing in some market segments.

The non-standard measures have to be commensurate with the functioning of the markets: if we have disruption here, or and anomaly in the functioning of some markets there, we have to cope with it to get a more normal transmission of our monetary policy impulses.

{'anticipate (153)', 'believe (492)'}

And in answering this way, I will also in a sense anticipate my answer to your first question, and I 'll read -- I believe by and large it 's the same words as the statement:" At our March meeting we decided on a comprehensive package of measures to ease financing conditions, stimulate new credit provision, and thereby reinforce the momentum of the euro area recovery and accelerate the return of inflation to levels below but close to 2%.

We believe, we expect, we anticipate that the obstacle that exists for the completion of the fifth review, the law on foreclosures, the obstacle that exists will be lifted and we will be able to participate in the QE programme.

Again, we believe that we have largely anticipated today what is likely to be observed.

{'anticipate (153)', 'risk (3278)'}

Second, the risks that I listed on behalf of the Governing Council will not surprise you ; there is the stronger pass-through of past oil price increases than previously anticipated, and that remains a risk.

So our decision comprises both our observation of what has already happened based on the new information which has become available since our last decision-making meeting and the sentiment of the Governing Council that we have to anticipate further slowdown and therefore the further alleviation of the inflationary risk.

I have explained that today 's decision was made taking into account developments since our last decision-making meeting and also anticipated what we expect to be the confirmation of a very significant alleviation of inflationary risks associated with a very significant slowing down of the economy.

{'anticipate (153)', 'seem (653)'}

That is anticipated by all observers, by all market literature and by all market futures observations, and observers seem to me in line with the reality of our own posture.

Even if it is absolutely clear that the prime grouping for cooperation is the G20 − and that is very clear and fully accepted, it seems to me, by the G7, and fully accepted by the central banks, which again have themselves in some way anticipated this evolution − nevertheless, it is not absurd for the industrialised countries, which have a major responsibility in the present situation, to meet together, as do the emerging countries themselves from time to time, without claiming any global authority.

{'anticipate (153)', 'speculation (54)'}

I will not enter into any speculation about who will be my successor, as you can understand and as you undoubtedly anticipated.

{'anticipate (153)'}

So, I am sure that these reforms are anticipated by the observers and by everybody in Spain.

I do not want to anticipate the conclusion which will be drawn following the proposal of the Commission by Jean-Claude Juncker as Chairman of the Eurogroup.

So we do not expect and do not anticipate that the conversion itself will have a significant impact on inflation.

As regards your third question on structural reforms, again, I do not anticipate the next meeting and meetings of the Eurogroup.

That being said, I do not want to anticipate the meeting which will take place next Monday at the level of the Eurogroup.

When we last decided to reduce rates, we had anticipated this weakening in the business cycle.

This figure is much better than that anticipated a year ago.

That is confidence-inspiring, especially also in times when the economy or economic developments are weak or weaker than anticipated.

It is clear that there will be some kind of boom-bust profile, which would be normal and is anticipated by all institutions and observers.

Later than we previously anticipated.

The problem, on the contrary, if you want to solidly anchor inflation expectations -- particularly in the medium and long term -- is that you have to be able to anticipate.

We still expect, as I said in my introduction, that inflation will fall to below 2% early next year, which is, in a way, earlier than we anticipated.

I would certainly hope so, but I do not want to anticipate our own projections, so we will see what our own projections are.

What we do think is that - I want to repeat what I said earlier - the period ahead of us gives all governments, and I am inclined to say the French Government is certainly included, a golden opportunity to speed ahead, faster than anticipated, towards fulfilling the requirements of the Stability and Growth Pact.

We therefore anticipate that a growth rate in the order of 3% per year will be maintained in the euro area for at least the next two years.

So, these are our reasons ; we are anticipating what we expect to be confirmed, namely a significant further slowing down of the economy.

We were anticipating a further significant slowdown compared with our previous Eurosystem staff projections.

But I do not want to anticipate what our staff will present next time.

You have noticed for instance that the services sector PMI was a little bit better than anticipated in April, that the European Commission 's service confidence indicator was a little bit less flattering than anticipated, and that consumer confidence in March was unchanged.

As regards your first question to the extent that the short-term market rates had already anticipated our today 's move this move was incorporated in the Eurosystem staff projections.

On the other point about negative rates, let me just say again what I said at the very beginning: From today 's perspective, and taking into account the support of our measures to growth and the return to our price stability objective, we do n't anticipate that it will be necessary to reduce further rates.

From today 's perspective, and taking into account the support of our measures to growth and inflation, we do n't anticipate that it will be necessary to reduce rates further.

So I do not want to anticipate a decision which is a very important one and will be made at the appropriate level, namely at the level of Heads of States and Governments.

Second, there are always countries that anticipate, countries that lag behind.

We anticipate that, subject to incoming data confirming our medium-term inflation outlook, we will then end net purchases.

I said that we have to wait and see, because partly it relates to the funding pressures that banks anticipated for the first quarter of this year and that we have removed with our three-year LTRO.

Well, I can anticipate some of the things you 're going to see shortly.

I can not anticipate what our next staff projections are likely to be: I will comment on them to you in a month 's time.

But of course we are taking into account the fact -- and are disappointed by the fact -- that it will come later than we originally anticipated.

We were even, in some respects, anticipating that in our constituency of central banks.

The decisions we took since December as well as the fact that the market is anticipating our decisions, and that the yield curve is showing an upward trend, all this has played a role.

I have already said - anticipating your remark - that our 320 million fellow citizens are asking us to be faithful to our mandate.

As you know, we have in a way anticipated this a little bit because the national central banks of those ten countries are already involved in the ESCB committees.

As far as the ECB is concerned, we anticipate that a gradual recovery will gain ground, albeit at low levels, in the second part of this year.

Growth is slow, admittedly: slower than we had anticipated earlier, but of a recession we do not speak.

So, you should not deduce from the fact that our projections were below but close to 2% in the medium term, at least in this horizon, that we do not need to increase rates simply because such increases, as anticipated by the markets, were incorporated in this projection.

The information we have today, which we have only just received, supports what I just said about the fact that the slowdown in economic growth emanating from the slowdown in the United States is larger, deeper and more prolonged than had been anticipated earlier.

I said from today 's perspective, and taking into account the support of our measures to growth and inflation, we do n't anticipate that it will be necessary to reduce rates further.

We think that it will take rather longer than we anticipated only three months ago, when we already knew that there would be a period in which the actual inflation rate would exceed our 2% maximum limit.

But now, given the recent further surge in oil prices, if these prices persist the period will be rather longer than we anticipated only three months ago.

So today 's interest rate move was in no way influenced by developments in the exchange rate, except that past developments in both oil prices and exchange rates were longer and more protracted than we had anticipated earlier andthey do work their way through orthey threaten to work their way through, both of them, into domestic inflationary expectations.

The third part where it comes in is when we say that we anticipate that after September 2018, it 's subject to incoming data, confirming our medium-term inflation outlook.

Well, to say that we anticipate -- because that 's what we say -- a series of actions, means that based on the current assessment, we are taking these actions.

{'anticipated (20)'}

Now, the developments in January, the weather conditions and the oil price hikes in January and February have crossed this expectation to the extent that the medium-term perspective is that inflation will later than earlier anticipated fall to below 2% or stay at 2%.

I do not think that interest rate policies would have an impact on the effects or the anticipated effects of the century date change.

{'anticipation (10)', 'may (1031)'}

But, in a normal stance, where there is no great anticipation in one or the other direction - for very technical reasons, but you may already have seen that with the fixed rate tender - money market rates are normally on average - that does not mean every day - a few basis points above the rate at which the central bank provides liquidity.

{'anticipation (10)'}

We do whatever is necessary and we are never pre-committed, but I would validate the present interpretation by observers and markets of what it means exactly in terms of anticipation, expectation, when we say it.

As I think I said last time, as far as pure expectations are concerned, they are very well aligned with the anticipation of the Governing Council that policy rates will remain at their current levels through the summer of next year.

Now, this enhanced forward guidance has been very effective, as broadly reflected in surveys, market commentary and market prices, in aligning expectations of the future rate path with the anticipations of the Governing Council.

{'apparent (27)'}

So I do not share the judgement that, over time, we have permitted a tightening of monetary conditions to become apparent.

It 's apparent that the political decisions that underpin such progress are easier in certain countries than others.

Having said that, it 's unquestionable that the decision that leaders took in June 2012 to proceed with the banking union, to create the SSM, to create the Single Resolution Board, to establish the Single Resolution Fund and ESM were all decisions that were addressing evident fragilities -- apparent fragilities -- of the monetary union, and which were made evident by the crisis but were actually pre-existing the crisis.

There is an apparent contradiction here, but in facts it 's not the case.

It 's not obvious, and that is one of the things that look more and more apparent in the analysis, it 's not obvious what is the pass-through between changes in the exchange rate and the inflation rate.

It 's quite apparent that the monetary policy measures that we 've been undertaking over the last year and a half, two years, especially, but even before, have significantly improved the financial markets, the credit markets and the money markets.

Well, the good of interventions becomes apparent if the results you have achieved are satisfactory.

{'apparently (34)', 'almost (134)', 'may (1031)'}

I am rather inclined to turn the thing around and conclude that apparently this -- what I am almost inclined to say -- deplorable action by the United States ' authorities to protect its steel industry may have something to do with the exchange rate of the dollar as it is being experienced by the American steel industry.

{'apparently (34)', 'confusion (26)'}

What we have discovered is that this annual review apparently causes misunderstanding and confusion.

{'apparently (34)'}

Mr. Eichel has apparently said that a higher exchange rate and lower interest rates were more favourable that the other way round.

If the tone of my statement today is perceived by you as you describe -LRB- as being more neutral -RRB- then apparently we have managed to strike the right tone.

But I also understand that the latest news about this issue is that ties apparently will not be totally severed.

We are slightly less pessimistic apparently than the IMF.

Well, apparently it was not.

So, that is what we discussed and what we decided to emphasise, which is not a change of policy, only a confirmation of policy which apparently did not come across sufficiently well.

But, apparently, that happened.

Of course, the falling price of oil is very important because now we really have to understand whether it is a structural fall in price, i.e. whether it is going to stay because of the shale gas in the United States and elsewhere -LRB- as apparently it is not only in the United States -RRB-, or whether it is something transitory.

I have read those rumours, just as you have, and I am inclined to do the same as the markets are apparently doing, i.e." shrug them off ''.

What happened today is simply that I was aware of the fact that it had been agreed to release the statement on interest rates for the next two refinancing tenders at 1:45 p.m. and, actually, the member of the staff who put it on the Web site apparently had his watch set wrongly, so he inadvertently, and I apologise for that, already put it on the Web-site at 1:40 p.m.

The exchange rate - and I can apparently not repeat it often enough - is one of the main indicators forming part of the second pillar of our monetary policy strategy.

On the Spanish Government in particular, the European Commission has said that they have to have all the figures in place, because apparently there is a certain dialogue about ratios and figures and deficits-to-GDP ratios to be achieved by the end of 2012 and 2013.

{'appear (202)', 'may (1031)'}

When looking ahead over the shorter term, it appears that inflation rates may continue to hover around this level, 2,1%, for several months to come and may thus not fall as quickly and strongly as had been expected up to the summer.

That meeting had been widely publicised and it is true to say that my name appearing on the invitation as the discussant had, indeed, attracted quite a number of, may I say, important representatives from the financial and political community in North America.

Of course, issues may appear that we have not yet discovered.

{'appear (202)', 'might (766)'}

On the other hand, it is true that $ 75 billion might appear to be a sign of stabilisation, and this is the way that most observers have looked at it.

First comment: there is a consensus in Europe, as extraordinary as it might appear, on what you said, on the fact that it would be extremely opportune to embark on structural reforms and to do things that some other economies have already been doing over the past years.

{'appear (202)', 'perhaps (538)'}

This is the reason why we are strictly separating standard measures and non-standard measures, and perhaps why we appear as taking different measures from others.

{'appear (202)', 'predictive (4)'}

I have to say that the futures market does not appear to be a good predictive indicator when you look at what has happened in the past.

{'appear (202)', 'probably (249)', 'may (1031)'}

If I may add, much the same to what you have just mentioned for" Le Monde '' also appeared, if I remember correctly, in the" Handelsblatt ''," Les Echos '' and probably in other sources.

{'appear (202)', 'risk (3278)'}

And if we were abandoning our magnetic north, then risk premia would appear and we would have higher, not lower, interest rates.

We have exactly the same judgement as we had before, but since then, downward risks to growth have appeared, and these are undoubtedly associated with oil prices in particular, but not only oil prices, as I just said, also commodity prices in general.

{'appear (202)', 'seem (653)'}

One can naturally explain very clearly that whenever one has sort of appeared, when people seem to say," Oh, you bought more bonds of one country and less of another '' it 's happened because of temporary technical factors that have been corrected in the subsequent months and weeks, weeks, and months.

When I look at all these projections, it seems to me that it is true that the OECD projections appear at this moment in time to be more negative than the private sector projections and the other public sector projections, including those of the IMF.

{'appear (202)'}

Again, I 'm happy that our collateral framework appeared to be adapted to new circumstances that were extraordinarily demanding for all of us, and this was absolutely clear across the Atlantic, across the Channel.

On growth potential, it is a pertinent remark of economists that when you have a big change in relative prices, as it is the case, there are a number of phenomena that appear, including the fact that part of the stock of capital becomes, for various reasons, partly obsolescent, and then you undoubtedly have a shock to growth potential.

So, it is not by chance that the word" appropriate '' no longer appears in my statement.

That in fact, as you said, there are spots which have n't seen such great recovery, and they, in a sense, do n't appear when we give this average, aggregate description.

But, on the other hand, we can not exclude that the present episode would appear to include elements that would have a serious bearing on the real economy.

It appeared to be even more dynamic than all observers would think.

And in a period when it appears that the situation calls for government responsibility, I confirm that we judge it appropriate that governments take up their responsibilities.

They are not necessarily fully satisfied with the present level of inflation, as appears in a lot of surveys, and they are calling upon us to meet our responsibilities, which are given to us by the Treaty.

As I have already said, we consider it appropriate that there is a close relationship between the central bank and banking supervision, which appears to be a growing trend at the moment also in Belgium and Germany.

And you remember we were criticised at the time: some were saying that we tightened much too early ; others were telling us that the last quarter of last year 's growth was not flattering -- which appears to be slightly true: now, after revision, it is 0.4%, while at the time it was estimated at 0.3%, which was mediocre.

The countries I was speaking of are proving to be in a better shape, i.e. countries that had negotiated a programme with the IMF some time ago and that have implemented that programme, so that first results of this policy are appearing.

But, for the time being, no failure or real difficulty in the system itself has appeared and all problems which appeared so far to have been solved in a relatively short time.

It 's true that quarterly growth appeared to be a little less flattering than was expected for the fourth quarter but we look at the trend.

These tensions appeared in a very acute way on 9 August, and we acted immediately.

Otherwise, we would not be doing our job of capturing all the elements that appear to be important.

Having taken everything into account and having talked to Ben Bernanke at the Federal Reserve, it appeared that it was useful for a number of reasons.

Particularly in the case of Italy, structural reforms appear to be very important, in addition to the absolutely necessary frontloading of the structural measures.

With regard to our monetary policy stance, as you know, we never pre-commit, we always take the decision that we judge appropriate so that we are never trapped by a pre-commitment that would appear not exactly appropriate later on.

So I guess it 's to be welcomed, this new work on strengthening the monetary union, especially having in mind that we need to repair the fragilities that have appeared in the last few years in the union.

We decided to increase rates for the first time after a long period in December with the benefit of the hindsight the decision appears to have been fully justified.

If, at any time, it appears that it is opportune to reactivate such a concept, we will do it, but at this stage it looked unnecessary, both for us and for the Swiss National Bank.

I need also to mention and I do that from time to time, in terms of trade the UK is more important for us than the US, and that of course appears a little bit paradoxical taking the size of the two economies concerned but it is what the figures are telling us.

Negative figures for growth in 2009 are gradually appearing.

All in all, the decision to cut the interest rate by 50 basis points appears to be the right and appropriate one.

Because it was really something which appeared extraordinarily difficult to achieve.

It is absolutely true that among the counterparts of M3 that appear particularly dynamic, in the most recent month, we have the external counterpart.

These were new concepts, but they have now spread world over -- thanks also to the journalists at the press conference: and we are proud that this concept appears to be state of the art.

It appears that this has led to some underestimations compared to what we were really observing.

We are looking at the situation, we are incorporating new data and new figures and when it appears necessary to guarantee -- which is our mandate, and which is the needle of our compass -- price stability in the medium and long run, then, we will do what is necessary.

Let me also say that from any bank lending survey, it appears that now credit is indeed reaching the non-financial sector of the economy, both for private companies and households.

It appears that the reversal of past portfolio shifts is proceeding more slowly -- and I trust that this is exactly your point -- than would have been expected on the basis of historical evidence.

It appears that small banks are tighter than large banks.

If it appears that these positive elements are materialising, then they will be part of our overall analysis and it is clear that it will be incorporated in the overall perspective for price stability in the time to come.

In the case of 9/11 it appeared that, because of the difficulty with some counterparties on one side of the Atlantic, we had to be -- in the United States as well as here -- very attentive to the necessary pouring of liquidity.

But I do admit that, inevitably, it appears to be a typically European phenomenon that these appointments are discussed across the regions of Europe given that we have different nationalities, cultures and languages.

I am not reacting to anybody 's remarks in this area and you will have noted that the word" exchange rate '' did not appear in today 's statement.

It appears that it 's self-sustained, as you can see from today 's decision and the reactions to the decision.

{'approximately (43)', 'could (2094)'}

Second, as regards the banking conference in Frankfurt which took place approximately a fortnight ago, I did not stand up, I was there at the banking conference, I had been invited, I was on the spot, and the Chairman of the panel, Mr Walter, asked me" could you tell us, Sir, what we need to know and to understand on interest rates and the monetary policy of the ECB ''.

But you could see that the first week we withdrew approximately 16.5 billion euros, the second week 10 billion more, the third week an additional 8.5 billion, in the fourth week 5.5 billion.

On the TLTRO, actually, first of all, we mentioned the figure last time of 7% of the loan book of banks amounting approximately to $ 400billion, and the overall take-up could reach a maximum of $ 1 trillion, so that is what 's available for the banks.

{'approximately (43)', 'deviation (40)'}

When we take a snapshot of the situation today in the US, state by state, and in the euro area, country by country, I would say that we have approximately the same standard deviation of inflation and of rate of growth.

{'approximately (43)', 'differ (47)'}

We have already said it 100 times, namely that the Monthly Bulletin, which is issued approximately one week after the Statement of the President, i.e. a statement of the kind the President has just made, is not sending and will never send messages differing from that in the Introductory Statement.

{'approximately (43)', 'might (766)'}

As regards the short-term evolution, we clearly see some reasons -- the very same reasons might explain -- why we would hover at that level, approximately at that level.

In all very large economies that I know -- and after all I know at least this one, the euro area, and another one which is approximately the same size -- in these kinds of continental, very large economies you have, and you might have, and we are observing, from time to time, substantial differences from country to country, from state to state, from, economy to economy, You might very well have a boom in one place while you have difficult periods in another, and I do n't want to cite any particular economy in Europe, but we all have in mind such examples.

{'approximately (43)', 'perhaps (538)'}

In answer to the first question, we continue to experience a decrease in excess liquidity, we continue to experience LTRO repayments, and these repayments have currently reached approximately 60%, or perhaps slightly below 60%, of the net injection that took place in the early months of 2012.

{'approximately (43)', 'possible (785)'}

So, the exchange with banks in the private sector will be possible for a period of approximately one to two months.

{'approximately (43)', 'recalculate (1)', 'almost (134)'}

I would like very much to hear some congratulations for this institution, which has delivered price stability in Germany over almost 13 years at approximately 1.55% - as the yearly average of inflation - we will recalculate the figure to the second decimal.

{'approximately (43)', 'risk (3278)'}

Here, we consider that the risks are balanced, so we have approximately the same weight of the upward risks and of the downward risks.

{'approximately (43)'}

Furthermore, according to all projections, the public finance deficit for this year will be approximately half that of other advanced economies, namely Japan or the United States.

This was decided over a time span of approximately three months, which is absolutely exceptional and without any precedent.

By that I mean the fundamentals of the currency, which has kept its value over 12 years remarkably and better than any currency at any time over the last 50 years, and the fundamentals of the consolidated economy, with its broadly balanced current account, a single economy with a single currency which overall has an annual public finance deficit which for 2011 is approximately half that of other major industrialised economies.

It undoubtedly has an impact on inflation and Germany represents approximately 30% or more of euro area GDP.

It is approximately 2.5 times the growth of the GDP in value terms.

All things considered, if you take the two years, we have approximately the same level: the difference is 0.1%.

So again we had a surplus of approximately $ 2.7 billion in 2008.

If I now take the aggregate net result of the Eurosystem national central banks, including the distribution of the net result that the ECB has been distributed to the NCBs and which goes onto their own balance sheet, then this net result is estimated to be approximately $ 16.8 billion for 2008.

The net figures I gave you -- for the level of the net result of the Eurosystem - namely approximately $ 16.8 billion is calculated after this provisioning.

For the fixed rate tenders, we started with the idea that we should be able to provide the market with approximately the liquidity that we thought it needed.

If I am not mistaken, the order of magnitude of the percentage of Greek GDP in terms of the euro area is approximately between 2.5% and 3%.

On the one euro banknote we have already said that we would examine this particular question when we look at the new series of banknotes within approximately one year.

I would say that I have been central bank governor for approximately 17 years.

Among those people who are looking at what we are doing and taking decisions on a day-by-day -- even a minute-by-minute -- basis, you have non-euro area residents holding approximately EUR 3.5 trillion in negotiable instruments and liquid deposits.

Banks are far from utilising this option totally, because we are approximately at 60% utilisation of the overall option.

You have to realise that the statement by the fifteen participating central banks implied that they would limit their annual sales of gold to an amount of approximately 400 tonnes per year and to an amount not exceeding 2,000 tonnes over the next five years.

To sum up what I have in mind as a synthesis of all information of a large array of analyses, I would say that today I mean over the last five years or even the last ten years -- the level of approximately a yearly increase of labour productivity is half the level we had in the euro area in the 1980s and half the level observed since 1996 or 2000 in the United States.

The strict inflation targeters -- but they have now enlarged and enriched their own initial concept -- were targeting inflation in, say, approximately two years, and the policy was like a guided missile: the guided missile was modified in order to hit the target in two years ' time.

The cost of credit for the euro area, for the whole of the euro area bank lending rates, fell by approximately 80 basis points.

Let me mention the December 2006 increase in outstanding loans to non-financial corporation of 13%, which is high, and approximately a little less than three times the growth of GDP in value terms.

{'assume (158)', 'believe (492)'}

Furthermore, I should once again like to say that it is up to all partners to assume their responsibility and we firmly believe that it is important to have this concept and this Treaty and Stability and Growth Pact framework.

{'assume (158)', 'may (1031)'}

The reason for changing to this new system, as you may know, was the practice of ever-lower allotment rates, which we had to accept, which made the whole system assume grotesque features.

{'assume (158)', 'maybe (396)', 'believe (492)'}

So, you can assume that the relative optimism was shared, but then one side remark: we do believe that growth, which has clearly slowed down in the course of this year and will continue to be very slow for the remainder of this year, will resume in the course of next year and maybe already in the early part of next year.

{'assume (158)', 'might (766)'}

As you might recall, these do not all assume that we would embark on the administrative regulation of these particular highly-leveraged institutions, but rather on a number of very important indirect moves with the full involvement of the core intermediaries, namely the prime brokers that are themselves under the jurisdiction of the banking surveillance authorities.

{'assume (158)', 'possible (785)'}

You assume it is possible to make a distinction between the western part of Europe and the eastern part of Europe, which I do not like since we are all on exactly the same footing and the only pertinent differences for me are that some are members of the euro area, others are members of ERM II, others are members of the European Union without being members of the euro area or ERM II and others are out of the European Union itself.

{'assume (158)', 'risk (3278)'}

In a sense, it is a further mitigating measure for the risk we are assuming.

But, certainly, these must be the two reasons: either they are fearful to lend -- and here we are talking about banks that do not have capital constraints of course -- so, assuming that they do not have any capital constraints, banks do not lend because either the risk aversion is too high or because there is no demand.

{'assume (158)', 'suggest (391)'}

Bank equity prices are of some significance for policymakers, because if they drop in the way they did, one would assume, if this is to stay, cost of capital would increase, and therefore the net return on lending would decrease and would suggest on the banking side a more conservative lending behaviour.

{'assume (158)', 'variable (72)', 'almost (134)'}

In our projections the monetary policy stance or the level of interest rates is a so-called exogenous variable, so we do not assume any change, strictly for - I am almost inclined to say -" scientific reasons ''.

{'assume (158)'}

Assuming that it is decided that the implementation of the referred steps and measures would be sufficient, a two-month window for PSPP -LRB- QE -RRB- purchases of Greek government bonds would open after the ESM board of governors have officially approved the first disbursement attached to the approval of the MoU.

Each institution must assume its responsibility.

So, do not assume anything, but see it as a reminder of the terms of reference that I have for this particular issue.

Of course the persistent - let me call it -" hesitating '' performance of the euro, which is keeping it more or less stable at a level which is lower than the level which we assumed, on which we based our forecasts, in itself increases the chances of it working its way through to inflation.

The long-term, the medium-to-long-term responsibility has to be fully assumed, and we have also, at whatever level of interest rates we are deciding to meet our medium-term goal, to help the money market to function.

We will monitor the situation very carefully, but, at the same time, one assumes that countries would like to keep a structure of debt issuance which is balanced across all maturities.

So, at this stage I would only say that we called on governments to assume their responsibilities in a situation which was and is very demanding.

You should consider these projections assume certain stock prices, certain exchange rates, certain interest rates, which are not the stock prices, the exchange rates and the interest rates that prevail over a 10 days ' average until today.

We always assume that in fact -- we should n't think that it 's over.

Well, if we had waited... Let us assume we had waited four weeks and we had moved then, and in the meantime we had made public the information as we are making it available today, and more extensively in the Monthly Bulletin of next week, then I am sure that in two weeks time your question would have been" what is new?

That being said, it is of course linked to the fact that our trade with the United States is less important than is frequently assumed.

In our own remarks, we also call upon absolutely all parties concerned to assume their responsibilities.

It is extremely important that all parties concerned -- and this means all social partners and all economic agents which have pricing power -- assume their responsibilities.

I assume they will be there in their traditional role, which is still their role and will remain their role, as the main economic advisor of their government and, to that extent, I have no objections whatsoever, and I have no inclination to be present either.

We are in a symmetrical position -- I assume that the Federal Reserve would not respond by saying" Yes, we are under the influence of the ECB, if they do this, we would do that ''.

Nevertheless, because this report is in Greek and I assume that you did not read it, I will give you an outline of what our views are there and my views in particular.

And we will be extraordinarily keen on having the executive branches of members of the euro area assume the highest level of responsibility.

The interest rate changes address pricing conditions, assuming that the euro area banking and financial conditions are working well, that the circumstances are normal.

Regarding sterilisation, you should not assume that we are not going to sterilise or that we will sterilise -- you have to understand, these operations are complex and they affect markets in a variety of ways.

But this assumes that lower growth translates immediately into lower inflation in the long term.

The second question assumes that the improvements we see in the financial markets will never pass through to the real economy, but that 's exactly what we have not been observing over the last few months.

We assume that there is currently a" learning by doing '' process among market participants.

You are talking about Italy, I assume.

That I assume.

By virtue of the fact that we are taking no action at present, you can assume that we are not perturbed by the present state and development of the exchange rate.

But there is one thing one reassuring thing that I assume that all these people who are actually part and parcel of these big decisions are responsible people, so I take for granted that they will not cause a banking crisis.

I assume you refer in your question to the exchange rate and not to the colour.

So you can assume nothing about efforts on our part to try to spend them.

We have always assumed that structural reforms have an impact on growth in the long term, but that is not always true for all reforms.

{'assumption (263)', 'anticipate (153)'}

Now, if, in the future, the underlying assumption were disqualified, in other words growth were less than currently officially anticipated -- that is less than 1ï ¿ 1/2% -- what attitude the Commission would then take remains to be seen.

{'assumption (263)', 'cautious (120)'}

So I would be very cautious -- and more cautious than you are -- in making the working assumption that what you can extract directly from the present bond market signals the fact that they incorporate depressed long-term growth.

If growth materialises, of course it will be an element that is part of our working assumption, but I remain cautious and prudent.

{'assumption (263)', 'conditional (51)'}

On the future trajectory of our interest rates, we are working on the assumption that we will proceed with a further withdrawal of monetary accommodation ; not unconditionally, but conditional on the confirmation of facts and data, and on the basis of our own future observations.

{'assumption (263)', 'could (2094)'}

As you could see, as regards the projections of the staff of the Eurosystem, this has been taken into account at a certain level which is the working assumption.

{'assumption (263)', 'perhaps (538)'}

It would apply rather to the much longer term -- 20 or 25 years -- taking into account very poor evolution of demography and perhaps also the very negative working assumption that structural reforms are not being done.

So, I would prefer perhaps for you to have the full explanation of the projections, with all the assumptions that have been made, immediately after this press conference.

{'assumption (263)', 'risk (3278)', 'may (1031)'}

However, if we were to see that the technical assumptions underlying these projections have worsened, or the downside risks are increasing and further on materialising, we may well change the size, the composition, the design of all our monetary policy instruments as needed.

{'assumption (263)', 'risk (3278)'}

I am exactly in the" mood '' of Athens with the additional message that everything we have observed since then has confirmed the working assumption we made in Athens, both in terms of risks that are increasing and in terms of a pick-up in activity.

As regards the economic analysis, we have confirmation that our working assumption, our main scenario, is pertinent and with growth growing faster than before, it pushes up risks to price stability.

So under this assumption it is absolutely clear that downward risks for growth are there and are rising.

{'assumption (263)', 'seem (653)'}

So a too simple analysis which relies upon the working assumption that the same institution does both -- asking for liquidity and replacing in the central bank - does not seem to be right ; it is more complex than that.

It seems to me that the expectations have has not necessarily been made on the basis of what I say on behalf of the Governing Council, but rather on the basis of the figures that are available, the facts that are given and the assumptions made.

It is considered that you have to introduce a large number of other elements to conclude, and I said myself that our working assumption -- which is shared, it seems to me, by the mainstream analysis and certainly by our friends on the other side of the Atlantic, in the sister institution -- is that a soft slowdown is very likely.

{'assumption (263)'}

And if inflation expectations remain in line with price stability, this paves the way for no second-round effects, for all economic agents to make the assumption that in the medium run we will be in line with price stability, and for a financial environment which is extremely favourable.

You see that the working assumptions of the present Eurosystem staff projections are different from the working assumptions of the previous projections that we published three months ago, only because the environment changes.

If our assumptions and scenario -- our baseline scenario -- are progressively confirmed, and until now we have been very happy to see that it has been confirmed, then the progressive withdrawal of monetary accommodation would be warranted.

But as far as the assumptions about long-term rates are concerned, we - in taking a long-term rate assumption - took the yield curve foreseen by the market.

As regards the assumption that market participants or traders or investors can make, I leave to them the responsibility of their assumption.

And the main driving parameter has been the change in the assumption about oil prices.

This is the working assumption.

And our mandate is to act based on the assumption that Greece is, of course, and will be a member of the euro area.

The ECB has acted within its mandate and will continue to do so, under the assumption that Greece will remain a member of the euro area.

Whether this assumption proves right is entirely within the responsibility both of the Greek Government and of the Member States here represented.

So the ECB continues to act on the assumption that Greece is, it is of course, and will remain, a member of the euro area.

And we did it, however, as I said, always acting on the assumption that Greece will be a member of the euro area.

The working assumption when I was mentioning the profile that I had in mind is that the price of oil would remain at the same level.

It is our duty ; we are there to ensure price stability ; we are there to deliver price stability ; we are there to permit all economic agents to make the working assumption that price stability will be delivered over time -- not just, as I used to say, on a two-year or a five-year basis, but on a ten-year or even a 30-year basis, because a number of Treasuries are issuing Treasury bonds on a 30-year basis.

Now, in the future, for the future, one can make -- and I am now talking in general -- hypotheses on the basis of assumptions.

So, we are in a situation where we consider our working assumption of recovery to have been confirmed.

I would say that all the data we have so far have confirmed that it was an appropriate working assumption, particularly for the first quarter.

This is my own working assumption and, again, this would be in line with the idea of having an integrated financial market and financial services market at the level of Europe as a whole.

Again it is a working assumption that we will have a significant contribution to growth coming through that channel.

Before the methodology just mentioned, we had another methodology which used the working assumption that you take the interest rates where they are and they do not change: Interest rate policy was unchanged in the previous methodology.

As regards the economic situation, we will see whether the working assumption continues to be confirmed.

As regards the monetary aggregates ; as regards the components of the monetary aggregates, including M1, which is very dynamic ; as regards the counterparts of monetary aggregates, including loans to the private sector, which are very dynamic ; as regards our working assumption of a second semester, which would demonstrate a certain pick-up in economic activity.

It is clear that the working assumption I have mentioned, which is the working assumption of the staff of the ECB, is also the working assumption of all international institutions.

A disappointing first semester and a second semester, which would be more in line with this assumption of a pick-up in economic activity.

We have a number of indications that confirm this working assumption, including various surveys, industry PMI, service PMI.

But so far there is nothing to contradict the working assumption.

Until now, everything that we have seen has confirmed our working assumption on the progressively more favourable conjuncture.

Everything we have seen since Athens has confirmed the working assumption we made there.

Everything that we have seen since then has confirmed that our working assumption was well-founded.

We will see again what the present state of the economy is, whether our working assumption is confirmed.

More recently we see that the forecast error that 's been made in forecasting inflation can not be attributed only to the assumptions on oil prices, food prices and the exchange rate.

That said, it is a theoretical assumption.

Again, we are making the working assumption that we will progressively see this moderate ongoing growth develop, but we are very pragmatic.

As regards your second question, I would only say that I am making the working assumption that the Constitution will be approved.

Again, the only working assumption I am making is that the Constitution will be approved and ratified.

This expectation is based on the assumption that wage developments will not be affected by the current inertia of the inflation rates and will remain moderate, even in the context of a gradual economic recovery, which -- as I have already said -- is our working assumption.

Second, all the information at our disposal since our decision of the beginning of December confirmed our working assumption that we were progressively reaching a rate of growth in the euro area that was close to potential, at potential or around potential.

All the information we have received since December has confirmed our working assumptions.

Taking into account both so-called soft figures -- surveys, polls -- and hard figures, I would say that the bulk of information received since our last meeting confirms our working assumptions.

Our present working assumption is that there will be a soft correction -- not a sharp and abrupt correction.

On the first part we have, internally in the ECB, viewed various scenarios where you have to make assumptions: if there is a war, how long will it last?

As for the projections, I can not say at the moment: the issue is in full swing at staff level and, of course, the underlying assumptions have to be changed.

And the assumptions, such as the decline in oil prices and unchanged exchange rates and many other assumptions, become more and more fragile as the horizon lengthens.

At the present time, I would say that we are making the working assumption that this slowdown would be a soft slowdown.

There are a number of assumptions as to what happened exactly, and why these notes were plunged into an acid.

But what is extremely important for a central bank is to be sure that everybody understands that the anchoring of inflation expectations remains excellent and that nobody, economic agents or price-setters -- not only the social partners, but all price-setters -- can make the working assumption that, in the medium run, there would be a permanently high level of inflation.

So, on the judgement we have on growth, I would say that what we are observing now and what we have observed during the last months, goes in the direction of a confirmation of our working assumption of a gradual recovery.

I have already said that we encompass absolutely all data, all information, all elements that are of importance, so I would say that we have taken everything into consideration and we made a working assumption, as I said, that the commitments that were made by the countries concerned and the commitments that were made by the qualified majority of the Council are to be met 100%... that is of course our working assumption.

The usual assumptions are behind this.

So there are assumptions.

So by and large, these are the underlying assumptions, and in some cases, I do think they also foresee an increase in the price of food.

That 's the working assumption of the Governing Council, which trusts the signature of the 17 heads.

This is the working assumption of the ECB 's Governing Council in terms of guaranteeing stability, the financial stability, which is a responsibility of governments of the euro area.

That is our working assumption.

That being said, the working assumption is that the decision that has been taken is implemented fully and rapidly, and it goes without saying that if it is implemented fully and rapidly, it would eliminate the reason why we, from time to time, intervene on the bond market through the non-standard measures that I already explained.

Our working assumption is that we will return to normal functioning.

This is my working assumption at this stage, but I 'm not ruling anything out !

You see asset prices going up and down, and to infer from an increase in the price of one asset that inflation will go up, and that inflation will go up because of OMTs, which have n't created any liquidity yet, is really a very rash assumption.

At this stage, I will only say that after June we will do whatever is necessary to ensure price stability and that is of course on the basis of this fundamental working assumption made by all the investors, savers and market participants that we can have the solid anchoring of inflationary expectations in line with our definition of price stability and that is true for the next five or ten years.

So again this anchoring is based upon the right assumption that we do what is necessary to do to deliver price stability and are credible in the delivery of price stability over time.

That having been said, we are also making the working assumption that the present price figures will not necessarily last for long.

First of all, we have already said that our working assumption is that what was signed by those 17 Heads of State or Government is implemented.

If our baseline scenario is confirmed, if our assumptions are confirmed, then we will progressively withdraw monetary accommodation.

I can only confirm to you that, if our scenario and our assumptions are confirmed, there will be a progressive alleviation of the monetary accommodation that exists today.

So our working assumption is very clear.

For further information, you will have to wait until 23 July, when you will have the stress tests, the assumptions and the results.

I would not dare to give a precise figure, but you can not simply base assumptions on the difference between the actual outcome of M3 at the end of 1999 and the reference value, because there were special factors at the beginning of the year.

As regards the methodological assumption, as you know for exchange rates the Eurosystem staff is photographing the situation of the exchange rate at the given deadline ; and then go along the period and that would call for 1.28 in the present assumptions that are underlying the projections.

As regards our overall assumptions and those of our ECB staff, it is what comes out of the future market because that is the only objective way you can look at it.

These projections are based on an assumption which is of technical nature and unrelated to policy intentions.

That assumption is considered by a number of other institutions and our own staff to be appropriate, but we do not endorse that ourselves.

As regards the other assumptions you know that they are based on assumptions related to the price of oil, the price of food and of other commodities.

On the first point, in view of the shocks that we have had to cope with, we can understand -- and I said that today also -- why for instance a large part of the new projections as regards inflation are explainable by the fact that assumptions on oil prices and commodity prices have changed.

Again our working assumption is that broadly our present assessment will be confirmed.

It is also the working assumption of the social partners.

When I said that we are confident that we will reach and achieve our mandate of an inflation rate of less than 2% within the next few months and stay there for 2001 and even 2002, that assessment is based on the assumption that interest rates will remain unchanged.

These are the assumptions on which our expectation of this slow, gradual recovery by the turn of the year is predicated.

I would say that our working assumption on growth has been broadly confirmed by all what we have observed.

Looking at all the information we have and taking into account our baseline scenario that assumption has been broadly confirmed by all what we have observed.

No, that would not be a reasonable assumption.

The EBA is responsible for these tests, but we have also been involved, providing some assumptions.

We are not using this working assumption.

At the present moment, we do not modify our working assumption of a gradual recovery and we consider that nothing goes against this overall, taking all figures, data, surveys and hard figures into account, and so we do not change our vision.

I only mention that in the staff projections, the assumption for the annual average oil price for 2005 was USD 44.7 per barrel and for 2006 USD 42.2.

And of course these are what they had extracted, at the moment of the computation of the projections, from their observations at the time and from futures, because these assumptions are based on information enshrined in a futures market.

And it is the working assumption that we are making that we would observe a smooth evolution in the context of long-term, global growth, which would call for additional reserve instruments or additional monetary and financial instruments.

As regards the governments and the executive branches, we expect, we are asking for, we make the working assumption -- which is the only reasonable working assumption -- that all the decisions taken on 21 July will be fully comprehensively and rapidly implemented.

And all this, put together, leads us to the conclusion that our working assumption of a gradual recovery is the appropriate diagnosis at the present moment.

I make the working assumption that the Greek government -- which has received a very strong message from the IMF, from the Commission in liaison with us, and from all the governments of Europe -- will do what is necessary, namely to fully, convincingly and immediately respect the commitment that has been made.

I said that the projections of the Eurosystem staff are making the working assumption that we do not have broad-based second-round effects.

That is the working assumption.

At the same time, we have to acknowledge that this baseline scenario is based on assumptions, such as an abatement of financial tensions in the future and, overall an ongoing buoyancy in external demand.

On the other hand, they were also based on a set of technical assumptions concerning exchange rates, oil prices, external demand, growth in output and so on.

And your question was, since your assumption is that it was weakly effective, then" would you consider doing more of that? ''

Again, we undoubtedly have to take into account these events, which nobody was able to foresee, if you look at previous assumptions.

So, what we publish does not confirm your assumptions.

As regards your last question: it is very important for me to restate that what is absolutely decisive for all members of the Governing Council is that this working assumption of the staff as regards the absence of second-round effects be fully confirmed by what will really happen in the reality.

It is absolutely fundamental, it is a key working assumption, and we will do all that is necessary to ensure that there is no materialisation of second-round effects.

Our staff is projecting that in 2009 we are likely to be back to our definition of price stability, but it is absolutely essential that the working assumption that there will be no second-round effects is fully confirmed.

We are confident, as I said, that we will go back to our definition of price stability next year on the basis of our present assumptions, i.e. that wages and salaries are moderate, that there are no second-round effects from the increases in the price of oil, that there are no nasty surprises regarding the price of oil in comparison with our assumptions, which are based, as you know, on futures markets, and that there are no bad surprises regarding indirect taxes and administrative taxes, which have been responsible, this year and in previous years, for some increases.

So we are confident, on the basis of our present assumptions, and vigilant, because it is something which is not only our duty but which stems from the present situation.

I said that, taking all things into account, we had some signs that our own staff working assumption was materialising.

And that is the working assumption I will make.

I would say the assumption made is the contrary.

Of course, it can never be excluded, but this assumption is not made as compulsory ex ante.

It can be, but it is not the ex-ante compulsory assumption.

The IMF does not make necessarily the ex-ante working assumption that the relationship with markets, investors and savers is interrupted.

On the United States, I am of course working on the assumption that they will have no default.

That is my assumption.

I will not embark on any kind of assumption on" what happens if '', because I am working on the assumption that the right decisions will be taken, not the wrong.

And so if you compare the latest data of the last part of last year with the data that we will have at the end of this year, under the assumption that we would have no further declines, you have a base effect.

{'believe (492)', 'cautious (120)'}

So I will be cautious and prudent, and I will only say -- and I am not speaking for any particular country or issuer -- that I believe that we have to continue working very seriously -- as we do -- at a global level and through the methodology that we have agreed upon, with the G20, the Financial Stability Board, the various working groups and working parties that we have created, to understand exactly the nature of the potential impact on global financial stability of the size of this hedge fund industry.

{'believe (492)', 'may (1031)'}

Now that that differential may be declining, there is every reason to believe that that undervaluation may, over time, also be gradually corrected.

{'believe (492)'}

We believe that it is one of the main tools that we have to anchor medium and long-term inflation expectations.

We in the Governing Council of the ECB believe that in the long term inflation is a monetary phenomenon and we have the impression that this is also regarded by academics and by observers in general as something which is very important.

I can not be clearer than that, I believe.

Well, I believe that you should address those questions to the American authorities.

We also believe that the decision we took two months ago and therefore the present monetary policy stance will contribute to delivering price stability in the medium term.

We do what we believe is necessary at any time, and we have proved that in the past, including in the very recent past.

We believe that repeating the mistakes of the past would be terrible because as we know, those mistakes had an enormous cost and were extraordinarily difficult to cope with.

My understanding is the European Council is going to discuss this report at the next meeting, I believe, or the meeting after that.

But let me say one thing: for, I believe, the first time, the text that circulated at the level of heads of state was not generic, was quite specific.

I believe that by and large that programme has these features.

Now, on the first point, it 's actually -- technically I believe the question about whether it was unanimous or not is not well posed.

I have noted with extreme attention that the US authorities have said that a strong dollar was in the interests of the United States of America, and I see that this declaration is believed by a number of operators and market participants.

And we do believe that our monetary policy decisions have avoided the second-round effects of a drop in oil price in January, and will continue to do so now.

It is true that for, I believe, 40% of the period for which we have been working, inflation has been in excess of that figure.

That can be phrased, we believe, much more elegantly and concisely, whereas our main concern -- that of the entire Governing Council -- is that the Convention 's proposal should in no way change anything in the mandate, in the independence, in the legal position, in the power to issue regulations of the Eurosystem, the ECB, and the ESCB.

On the contrary, we believe that by being vigilant and credible on price stability, we are preserving a financial environment that is, as you know, extremely favourable in our view.

We do believe that our decision at the last Governing Council meeting -- the monetary policy decision -- was, as I 've said, right.

The second is that we believed that they ought to be protected to ensure the integrity of the ECB 's balance sheet, and therefore its independence.

I believe in the values of inclusion and solidarity, but the present rules do n't allow, do n't make this social model -- it 's not European, by the way, but a social model that prevails in some countries in Europe, not everywhere -- these rules make it unsustainable.

I do not believe that I will, and I do not intend to be a lame duck.

The procedure is -LRB- and the dates are fixed -RRB- that on 15 July, I believe, the Ministers of Finance will formulate the proposal for the presidency of the ECB.

We support the full-fledged achievement of the single market in all domains because we believe that it is a prerequisite for continued prosperity, growth and job creation in Europe.

The phrase I used about the euro, that a strong euro is in the interest of the euro area, is indeed nothing new, but I believe I can not repeat it often enough.

And as such, I do not believe - although I can not comment further on forecasts which still have to be released - I do not believe that they are already now too optimistic.

And, knowing this, I believe that in my explanation today of the considerations and assessment in particular by the Governing Council of the medium-term economic outlook, in terms of both growth and prices, you will find a suitable justification and explanation for the interest rate move we applied a few weeks ago.

I can not answer that question, but I do not believe in" complots ''.

And I do not believe it is wise to make unconditional statements about the future.

Now, we believe that these short-term considerations should not overshadow a number of other important facts and conclusions which are widely supported by evidence.

Monetary policy decisions, as I believe you very well know, are taken on the basis of a mandate and in order to attain the clearly stated objectives of monetary policy.

And I believe that this is broadly in line with the forecasts and projections of other institutions and the private sector.

After appropriate discussion in Essen and in Washington, I myself noted that our Japanese colleagues, both the Minister of Finance and the Governor, said they believe that the Japanese economy is on a sustainable recovery path and that the exchange rates should reflect these economic fundamentals.

So I will make a general remark, which I believe to be appropriate and neutral.

And if it does, it will obviously increase the pressures and the problems associated with the excessive deficits that have been recorded in these countries and will make it more difficult to implement budgetary policies and so to bring the fiscal position in these countries closer to balance over the medium term, which -- as we stressed in the Statement and as I stressed separately earlier -- we believe is going to contribute to rather than adversely affect economic growth.

I can not say that too often, I believe.

And as I said, the exchange rate itself is not a target for our monetary policy so if you want to know what the difference is, I believe I have very quickly explained that.

In no way do we believe that at the present time the exchange rate is any impediment to the further growth and recovery of our exports.

I do believe that the prompt and adequate reaction of the ECB to underlying developments in the outlook for price stability in the form of a range of interest rate changes has been adequate, and that the fact that we are close to but not at, admittedly, an inflation rate in line with the maximum of our stated objectives can not but enhance the credibility of the ECB.

As regards the monetary analysis, first of all, you remember that when we clarified and communicated our monetary policy strategy, we explained at length why we believe it is important to have a monetary analysis, why the monetary analysis is based very much upon our utmost conviction that in the long run, inflation is a monetary phenomenon.

We believe that it is extremely important for any central bank, and I would say in particular for the ECB, to firmly anchor medium and long-term expectations.

Now, we will publish -- as we do twice a year -- our new forecast in, I believe, seven days time, in the forthcoming issue of the Monthly Bulletin, and this still has to be finalised.

Then we said that our monetary policy will accompany the recovery, and that is, I believe, not only in Sintra, but also in Tallinn, and certainly today.

In itself, we believe that to be a temporary factor.

We are trying to do something which we believe is very important for the euro area and for price stability, which is to repair monetary policy transmission channels in the euro area.

This is necessary for paving the way for appropriate sustainable growth and job creation, which is also essential as an element of confidence in the present circumstances, but we also have to continue doing what we have been doing, namely responding wisely, quickly, expeditiously and professionally to the challenges we face as regards the functioning of the money market, something I believe we have done well and will continue to do.

That being said, we will see exactly what will happen and we have reasons also to believe that progressively we will have the recovery that you were mentioning, but as an average for 2009, as you can see, the projections are negative, or between -1% and 0.

We are all doing what we believe is appropriate.

First of all, we believe that this decrease in interest rates is effective, and we are seeing market reactions to this effect.

So there are various reasons to believe that both today 's decisions and our forward guidance have been effective.

I believe that in your articles, editorials and judgement, you also have a wide range of views.

We believe that we have contributed to shortening this protracted period of time with today 's decision.

We firmly believe this.

Our decisions today, we believe, are appropriate and commensurate with the situation that we are observing.

We do not believe this by any means.

That being said, we strongly believe that a very important factor in making productivity progress materialise is the flexibility of the economy.

So all that I can tell you is that in that domain, we believe that permanent alertness is absolutely essential.

So the ECB has a view whereby the UK should remain in the European Union, because the European Union would benefit from its permanence, and we believe that the UK too would benefit from staying in the European Union.

We undertook a very thorough analysis of the situation and we believe that the interest rates are in line with what is required by our overall economic and monetary analysis.

Because, if economic agents think that the delivery of price stability will be 1.9%, it is because they believe that we will be vigilant.

I think there is a date when this is going to be done, and I believe it is at the end of the year, but I can not let you know for sure

And I do not believe that it will have, as far as it has gone now, any impact on the real economy developments, on output and export capabilities.

I still believe that we will reach the potential growth rate of the euro area -- which we estimate to be between 2 and 2.5% -- towards the end of this year and that next year we will even surpass it.

I believe I can say this on behalf of the press as well.

In that respect, everything is not equal for all countries, but we continue to insist that political endeavour to achieve that situation should remain intact and we believe that that is not the case in all the countries we are observing.

What we have done today gives you an idea of what we believe the appropriate balance should be in the present circumstances with all their complexity.

We believe that the ECB has some value to add to it in its field of competence, namely the financial sector.

On the contrary, we believe that the interest rate move of today creates the conditions for a sustained period of non-inflationary but high growth.

For the purpose of giving some clarity to all market players, it is our intention, when we announce the tender, to signal what we believe the liquidity needs to be.

We believe that, with this move, combined with the moves we have made since November last year, we will avoid that danger.

And the reversal which started about two weeks ago still leaves, I believe, some potential for further appreciation.

And the European Parliament did n't believe so.

That 's what we are accountable for and that 's what we believe we will succeed in.

We do believe that this rate cut, otherwise we would not have done it, will not pose any additional threat of inflationary pressures arising either in small or in large counties.

I believe the Commission has come out with a similar figure of 0.25% to 0.5%.

As I explained today, we strongly believe that the strong M3 growth over the last few months has everything to do with factors which are really temporary.

Our assessment of the economic developments, especially after the events of 11 September, has led us to believe that confidence has been hit harder than we thought only a few weeks ago.

We believe that it is in the interests of Poland taking into account the Treaty and the fact that the euro area is open to Poland, as well as to all other friends, provided they meet the Maastricht criteria, provided they have converged sufficiently, and taking into account the fact that they have no opt-out clause, which we are happy about.

First question: Yes, we believe that the 2% level that has been maintained for a substantial period of time has been the right response by the ECB to the various situations in which we found ourselves.

To your first question, it 's absolutely clear that we believe that we handled these difficult circumstances very well.

As regards your second question, today 's move fully reflects our assessment, over the medium term, of the inflationary tendencies, and it can be seen, as we believe, that we have with this move reached a level of interest rates which is appropriate as a monetary policy stance in the light of that assessment.

I still believe, and Mr. Eichel has confirmed this in public and in the Eurogroup meetings, that the governments are firmly committed, and remain committed, to reaching their goals as stated in the Stability and Growth Pact and in the stability programmes which they have presented, taking into account and to the extent that, for cyclical reasons, and because of the weak economic performance of the various economies in the Union, the actual nominal figures which are intended to be met are not being met.

So I believe that we were instrumental in moving a bit the state of the art in this respect.

I have to mention that because I believe that it is something that is important.

I beg you to believe me that I have no idea how long I will be here.

I think that we are credible enough for people to believe that we will deliver what we promise to deliver.

That question I have already answered, I believe.

And we believe that current market developments are okay, but we think that there are two scenarios that would cause us to act: one is an unwarranted tightening of the short-term money markets, and the other one is a worsening of our medium-term outlook for inflation.

Let me put it this way: we share the optimism on economic growth, as it has been expressed by the Commission, in that we also believe that growth in 2000 and 2001 will be well in excess of 3%.

The second factor that led us to reflect is that when we look at monetary and credit developments by year end, which look subdued -- although they are stabilising, especially the credit flows -- we believe that, and we think we have evidence that, these figures are affected by banks ' behaviour in view of the asset quality review -LRB- AQR -RRB- performed by the ECB in the course of 2014, because the data upon which the AQR is going to be performed are data for year-end 2013.

We believe that we are very transparent.

We also -- including myself -- were referring to what Minister Omi and Governor Fukui had said ; I said that I had noted myself that they said" that they believed that the Japanese economy is on a sustainable recovery path and that the exchange rates should reflect these economic fundamentals ''.

We are totally open, we are totally transparent, and we firmly believe that something has to be done and that the present situation is not -- as Gertrude said -- optimal, neither from the competition standpoint nor from the financial integration standpoint, which is very important for us as well as for the Council and the Commission.

So that if we want to see unemployment continue to fall - even fall faster - in Europe, we believe we are contributing to this end by our decision today, which supports long-term strong growth which avoids the danger of inflationary developments - although this is not a substitute for the carrying-out or pursuit of structural reforms.

And all governors of the accession countries - with the exception of one, I believe - will come to that seminar and we will discuss a wide range of issues which have to do with legal aspects, statistical aspects, monetary policy aspects of entry to or becoming a member of the EU.

In some countries, I believe four, current inflation rates are over 2%.

Well, it 's an important change after many years that oil prices had gone down to, I believe, an unprecedented extent ; now they 're rising again, and the explanations are, in a sense, symmetric to what were the explanations for their downfall.

We have had enough studies, I believe.

Well, as I have learned -- as have you, I believe -- on foreign exchange interventions I will keep my mouth shut, so I will say nothing about it.

We will publish our second forecast, I believe, in the June Monthly Bulletin.

This makes us believes that, although before we thought we were approaching the reference value, now we know that, in fact, we have already been under the reference value of 4 1/2% for quite some time and increasingly so.

Well, I hope to have made it crystal clear in my introductory statement, and I repeat now for the second time: we do believe that with our move today we have reached a level of interest rates which is appropriate for the given situation.

And as far as the Governing Council is concerned, I believe it is true to say that they were not yet aware of that.

On the LTRO, we believe that funding conditions right now are satisfactory.

We speak a lot about contagion when things go poorly, but I believe that there is also contagion, positive contagion, when things go well.

And, finally, we believe that ensuring price stability actually gives you the long-term foundation for growth and job creation.

We believe that what is likely to happen this year looks encouraging, of the order of magnitude of what has been observed last year.

All in all, we believe that the situation in the euro area is different and that there are other reasons that explain our low level of inflation.

First of all, we believe it is very important to have an exit strategy, and you heard what I said on behalf of the Governing Council just a moment ago: the Governing Council will ensure that the measures taken are quickly unwound and that the ample liquidity provided is absorbed.

We are viewed by observers as being one of the central banks which undoubtedly has all the means to implement an effective exit strategy when we believe it to be necessary and appropriate.

The draft proposal by the Commission contains the three elements which we have always believed to be important, namely a single mechanism, a single authority and a single fund financed by the industry − by the banking industry.

We also believe that 114 -LRB- of the Treaty of the Functioning of the European Union -RRB- provides a sufficient basis for the creation of the single resolution mechanism -LRB- SRM -RRB-.

The ECB believes that it should only be an observer, just to make sure that two phases are completely separate.

I believe they are aware, and this awareness often needs to be translated into actual action.

There was a discussion and, as last time, some governors observed that improvements in the economy would not justify this discussion but other governors believed that the discussion was warranted.

I believe that yesterday and today you have had occasion to read what the Minister of Economy and Finance said in the Italian parliament.

And that is something which we believe is absolutely essential.

We believe so.

We believe that if it 's not monetary financing, it 's in our mandate.

We also believe that exchange rates are not a one-way affair, whereby you simply click something and you change the exchange rate.

We do believe that the exchange rate is important for price stability and for growth.

On the first point, we believe that the outlook for inflation in the medium term is such that it justifies this new way of communicating, this forward guidance.

We believe it is too early to assess what the basic reasons are that the euro has been, let me call it, recovering so strongly in the last few days.

I have said explicitly that we believe that this purchase of covered bonds is very much in line with what we are doing with our own refinancing operations, because we have in front of us the signature, backing or guarantee of the counterparties -- the commercial banks themselves -- plus the collateral in the one case, or the assets covering the bonds in the other.

With regard to the exchange rate: as I have said, the exchange rate has not moved very much since our last meeting, but it has stayed around the level already reached two or four or even six weeks ago, which is a level that the Governing Council firmly believes does not adequately reflects the potential for growth and the current situation of robust economic growth with unemployment slowly falling in the euro area.

We believe that only 55 - 56% of the recapitalisation capital has been utilised.

If they did not believe in this capacity, they would elevate the level of their inflationary expectations and we would immediately have medium - and long-term market interest rates that would be higher, or much higher, or much, much higher.

And we believe that the strong expression of vigilance has played a role in calming down something that was rising slightly.

And that was really something which I praised because I believe that it was something important.

I believe that when things are said that are, in my opinion, important and excellent, why not mention them?

That was, yes, I believe that was two weeks ago, and I must confess that I have heard him louder through the media than in direct contact.

And we believe that it is commensurate with the challenges that we have.

I believe we are well on the way.

We say what we believe we have to say and everybody will take responsibility for his own actions.

We say what we believe we have to say, and you are right in saying that we will not change our own vision.

Second, this market can actually -- we do -- I mean, Bank of England and ourselves believe that this market can restart, but the economics of this market must work.

Now, it would have been, I believe, the 50th ECOFIN meeting I had attended.

I believe I have already made those comments in my introductory statement and I have nothing to add to it.

We believe that this was an appropriate decision at the appropriate moment and, of course, the effects of monetary policy decisions will become evident only with a very long time lag.

I believe I can not be clearer than that.

We believe that the euro is firmly based on internal price stability and, therefore, has the excellent potential to achieve a stronger, external value.

I really believe that as regards the functioning of the money market it 's very important that the central banks remain in close contact, as they are.

But since the very beginning we did n't believe that it would be an episode that would not last -- we said it 's an" ongoing process ''.

I never said that because we did not believe that.

And we firmly believe that we have inflation under control and that our definition of price stability is being reached.

That 's the organisation of Europe, and I believe that it is a good organisation.

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.

And we try to be confidence-inspiring, as I say, we believe this to be very important.

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.

Based on this, we believe that medium-term inflation is broadly balanced and in line with our definition of price stability.

We believe that today 's decision is the right decision to ensure that we deliver inflation in the medium term in line with our definition of price stability, which is not simply 2%, but" below, but close to 2% '', meaning that" close to 2% '' is part of our definition of price stability.

And I also said after some comments made by Minister Omi and Governor Fukui that we believe that the Japanese economy is on a sustainable recovery and that the exchange rate should reflect these economic fundamentals.

We have already an instrument that we believe to be a very good one.

As regards Germany, we have noted -- not only for Germany but, more broadly, at the level of the euro area -- that a number of indicators confirm what we believed to be the case, namely that we were in a process where growth continued to be there at the beginning of this year.

At this stage we do not believe that we can conclude with sufficient certainty that there has been a change in total factor productivity or in labour productivity that would permit us to say that the growth potential is higher than before.

We also believe that there is no room for complacency because the convergence process is certainly a very important one and very ambitious one, taking into account the starting point.

As I said on behalf of the Governing Council, and I also said that last time, we believe that the current monetary policy stance will contribute to achieving our objective.

I have said what I had to say: it is clear that we believe that the present monetary policy stance will contribute to achieving our objective.

And of course, and this is another issue on which my views are well known, in this country at any rate, I believe that public finance in this country should have sufficient room for manoeuvre in order to better cope with expected substantial increases in age-related expenditure, because Greece is faced with one of the worst problems of an ageing population, which will have serious consequences for both healthcare and pension system expenditure.

But taking the euro area as a whole, we really believe that what is in the financing laws for 2006, does not correspond to the optimum in a period of cyclical recovery, even if we had some good news as regards the 2005 final results.

I would only say that we continue to do what we believe is necessary in the circumstances.

And thus far I have no reason to believe that it is not being implemented rigorously.

On the United States of America: I have always said that we very much rely upon the analysis of the Federal Reserve System and that we believe that their analysis is a pertinent one.

And we believe and have come to the assessment that, given the renewed tensions that we are observing in some financial markets, it was the right and appropriate response.

We believe that, on the basis of all that we are observing, it is justified to say that we are still on the accommodative side.

In our opinion, and because you all know that and the market knows that, the market believes we are credible and capable of delivering price stability.

We believe that all countries must always be ahead of the curve.

I believe confidence is always regained progressively, so it is up to the responsible authorities, and I am sure that they will act to redress the situation progressively.

I think what I said last time -- and I can confirm that even though we have n't discussed, I believe the Governing Council would be pretty unanimous on that -- is that the capital key will remain the guiding principle.

We believe it will be in that range.

We are very clear on what is our mandate, the fact that we believe that the present monetary policy stance will permit us to achieve our objective and, that being said, we are constantly alert, as everybody will understand.

We do believe that exchange rates in general should, over the medium or long term, reflect the economic fundamentals of the regions concerned.

Growth is growing and momentum is also growing and labour market and everything is doing -- well, I think it 's, I ca n't remember how many quarters of consecutive growth, 17 I believe.

Regarding your first question, as I just indicated, we believe that the decisions we have taken are appropriate.

First of all, let me remind all of us: when we told observers, investors, savers, economists, market participants that we believed that we had to move rates upwards -- you certainly remember that -- we did that some time before we increased rates in December.

I believe that the central banks have played a decisive role in avoiding the catastrophe.

What I do believe are the most recent statements to this effect by Eurostat and the revisions they made to the Italian public accounts.

It can be designed, I believe, it can be designed to have a consensus.

I believe it is enough what I have said, that, after an extensive discussion, the view prevailed that we would be well advised to leave interest rates unchanged today.

And so, I believe your question should be raised in other circles.

You all see this point, I believe.

We will see exactly how the London meeting goes at the level of ministers and governors -- I believe that previous decisions taken by and the strategy previously defined at the level of the G20 ministers and governors and at the level of Heads of State and Government, has been effective.

We believe that what we did today and what we did before is precisely there to enable us to deliver price stability in the medium term.

Against the present background and on the basis of our present assessment, we believe that the monetary policy stance after today 's decision will contribute to achieving our objective of price stability.

As soon as Greece repays the SMP bonds that are due, they 're coming due I believe in July or August, and if the waiver had been reinstated of course, then we would be able to buy Greek bonds via this new asset purchase programme.

We believe that this move upward is the kind of move that was necessary to permit us to continue to tell our fellow citizens" You can have confidence that we will deliver price stability in the medium term despite the very difficult circumstances in which we are, particularly because of the very strong increase in the price of a number of commodities. ''

We also believe that improving confidence, particularly in the consumer constituency and in the household constituency in general, would be a very important means to foster growth and job creation.

An environment which we believe is optimal under the present circumstances.

We believe in what we do and we are observed not just by all of you, but by the entire world.

We believe that by being very clear in the eyes of public opinion, households and market participants that we were vigilant, we have permitted precisely those inflationary expectations to remain firmly anchored.

Nobody would have believed.

We believe that we can prove that success in the economic and arithmetic studies that we carry out.

In response to your particular question, we believe that the Introductory Statement gives you the pertinent information, namely the basis of the decision of the Governing Council.

This is the reason why we are calling for structural reforms, because we firmly believe that it is the lack of structural reforms particularly in a period of very rapid changes in science, technology, and globalisation, that explains why we have a disappointing level of increase of labour productivity.

We believe that the governments have all necessary capacity to leverage the EFSF themselves.

This is the reason why we believe that the decisions that have been taken will progressively help to move things in the right direction.

And, as regards the corrective arm of the Pact, we have said clearly both that we would call for the Treaty and the Regulations not to be changed and that we believe it to be extremely important to retain the nominal anchor of 3%.

I do not believe that hard figures are the only reliable figures or that survey figures are the only reliable figures.

I already responded on the way we look at this if our main scenario develops, as we believe it will.

As regards the IMF meetings in Singapore, the Eurosystem and the ECB believe that we must have an appropriate presence which corresponds to our responsibility.

We had new forecasts, we have them four times a year, and actually I had them the evening before I attended the G7 meeting -- at which you were present, I believe, and heard me make my statement.

And again, we believe that the current monetary policy stance will contribute to achieving our objective of medium-term price stability and solidly anchoring inflation expectations.

You can deduce from that what you believe would be the right understanding from your standpoint.

Answering your second question the sentence speaks for itself as regards the fact that we believe that the current monetary policy stance will contribute to achieving our objective.

On your last point, I said already that we believe that the current monetary policy stance will contribute to the achievement of our objective.

I do believe that the exchange rate development brings the mutual relationship more in line with the fundamentals as they develop and have developed over time between these two great economic areas.

And I believe the markets did not expect us to wait.

We believe that the current monetary pol icy stance will contribute to the achievement of this objective.

But then let me say that the utterances and the discussions about the Stability and Growth Pact are very much a thing, I believe, of the past --, of the very recent past.

As regards the present monetary policy stance we believe that it will contribute to achieving this objective.

I believe it is important for the industrialised countries to have this kind of opportunity for meditation, also taking into account their responsibility, including as regards the recent crisis.

And I believe that it is in the interests of the United States, as well as in the interests of the rest of the world, including Europe.

We have a mandate, we are faithful to our mandate and we believe that it is the best way to help growth to be sustainable and job creation which, very fortunately, is now visible, sustainable in the medium and long run.

I appreciate enormously the fact that they believe that we have delivered price stability in a way that is historically impressive.

That said we believe that the present monetary stance is precisely in line with this objective.

We believed that our monetary policy stance at the time was in line with the delivery of price stability.

So, we believe that the market has understood that well and that the problem has been overcome by the banking sector.

And I believe that this set of sound and reasonable policies is one of the necessary conditions for markets and exchange rates to be stable.

On the second question, we would believe that the measures taken today will be effective, will raise inflation, medium-term inflation expectations, and basically will address the economic situation in the euro area.

As regards the LIBOR, I believe there is an enquiry taking place at this very moment.

We believe and are convinced and have good arguments to think that the monetary policy measures that we have decided today will contribute to lift inflation expectations.

We have taken note of the forecasts that are being prepared by the staff of the Eurosystem, i.e. the NCBs and the ECB, and those forecasts will be made public in our forthcoming Monthly Bulletin -- I believe, on 14 December -- so that I can not comment now on precisely what the forecast would entail for next year.

And in the end we do believe that it is of the greatest importance to enhance confidence among both consumers and investors if governments stick to their medium-term strategy, whatever happens.

But do not believe that the previous" appropriate '' would mean no change in the future, in the many months to come, for a very long period of time.

As regards the position that we have expressed, we believed that it was necessary to explain even more explicitly what our policy diagnosis was, and I quote -- as it has been analysed very carefully --" on the basis of our regular economic and monetary analysis, we have not changed our assessment that the current stance of monetary policy remains in line with the maintenance of price stability over the medium term ''.

We the ECB, we the Governing Council of the ECB, the Treaty itself and all the people of Europe who have ratified the Treaty, we all believe that price stability is a necessary condition for growth and job creation.

Now, we believe that the fact that investors have temporarily shifted their portfolio investment into more liquid assets, which are part of M3, is a temporary phenomenon -- while your question implies that it will be a long-term phenomenon -- and that people would rather spend on consumer goods, I suppose, than start investing in portfolio assets anew.

We believe that this is the most likely event and, therefore, we do not consider this course of the growth rate of M3 as a source of future inflationary pressures.

We stressed that we believe our present stance of policy is exactly in line with that goal, and we note that it is obviously helping, because we have the lowest interest rates in 50 years.

We believe that creating an environment of stable prices through a stability-oriented monetary policy in a forward-looking manner is the best contribution we can make not only to the growth of output and employment but also to the restoration of confidence within the public at large.

We believe that through price stability we can help to considerably improve the situation, the economic situation of Europe.

I also noted -- this was not a decision which went beyond what had already been decided -- that 80% of the Portuguese parliament approved the adjustment programme, which is something I believe to be very important.

We said exactly what we believe on the basis, again, of our present analysis.

And we believe that all we can do to communicate this element of confidence to the households is very important.

We believe that it is extremely important not to engage in permanent battles on figures.

And I believe that it is important for you to know that.

I mentioned that they were in some respects mixed but, overall, we believe that they do not lead us to change our overall assessment of the gradual recovery.

We believe that the secondary legislation, namely the Stability and Growth Pact itself, the wording of the Pact, should not be changed.

We believe that we still have a lot to do at the global level.

From a regulatory perspective, it should n't change, unless I 'm mistaken, but by and large, we believe that these worries are, to say the least, premature, certainly not supported by the current evidence.

The OMT would not apply to countries that are under a full adjustment programme until -- and that is what I believe I said last time -- until full market access, complete market access has been obtained.

We believe that with the adoption of the stabilisation measures that I mentioned before, spreads will go down and I understand -- no I do not only understand, you can verify yourself -- that spreads have gone down.

With the adoption of further measures I believe that spreads will go down as they have done in other euro area countries.

I am very satisfied with the development of the euro, but I continue to believe that, in the future too, the euro has, given the performance of the European economy and of the US economy, strong potential to appreciate.

That is why I believe that the very fact of having an objective, a goal, an end point and a clear path would, by itself, contribute to a stabilisation of the financial situation in Europe.

-- in June, I believe, and of course we update these continuously.

And your imagination, I believe, is going too far.

I believe it can be achieved.

We believe - or rather can observe - that this phenomenon has disappeared, and in the first two tenders where market expectations were not moving in any particular direction, the effective rates and the marginal rates have stayed very close to the minimum bid rate.

We believe that our decision of 8 June 2000 to raise interest rates was and still is appropriate in the light of the circumstances and the economic developments as we see them and as we evaluate them.

Well, I believe that, regarding our last move of 4 November last year, we deliberately, let me say, massaged the markets in that direction between 15 July and 4 November.

I believe we have prepared markets well enough in their, as it so happens, justified expectation that something would happen.

We did and we do believe that the euro has a strong upward potential, for the reasons which I have given to you so often.

The main factor is still, I believe, the different cyclical situations in the euro area compared with the United States, which make it quite normal for the exchange rate to move as it has.

On 27 April 2011, the Chairman of the Board of Governors of the Federal Reserve System said that the Federal Reserve System believes that a strong and stable dollar is both, in the American interest and in the interest of the global economy.

This to explain why we believe that this strong vigilance is appropriate in the present circumstances and is helping to preserve this favourable environment and therefore growth.

At the same time, we believe that all the actions we have taken will in the end find their way through to the economy, so much so that we foresee a recovery, a gradual recovery, in the second part of this year.

Because, again, we believe that this is our mandate, and because this would then immediately disanchor inflationary expectations.

As a general rule, the ECB does not like one-off operations because we believe that then there is a problem: you have it good for one year and it 's not good for the following year.

We are, in principle, against one-off operations because we believe that they do not help at all.

Of course, because of these levels -- the nominal levels, as I have already said -- we believe that there is an absolute need to be strongly vigilant as regards precisely these second-round effects, which can be much more lasting and are our worst enemies.

But it is very important that we stick to this methodology, and the staff believe that we should stick to this methodology.

Reflecting not on a short-term basis but on a slightly longer-term basis, we believe that growth will be more dynamic.

In a number of economies and countries the sentiment of the people is even that there are more price increases than we believe, more than is calculated at the national or European levels.

That is my opinion and I believe it is the opinion of all central banks I know.

As regards your second question, I really believe that what we are doing is accompanying the markets ' return to normal functioning.

I believe I can reassure you about credit itself because corporate lending is actually decreasing and consumer credit is increasing but only a little.

But I believe that this will form part of the effort which we have to make at a global level to ensure that the financial system is much more stable.

It is also, I believe, in the interests of the partners of the United States.

And if I can add a word in response to your question, I believe that if a fiscal consolidation programme is both credible and durable, it is going to help support economic growth over the medium term and also strengthen employment.

We do believe - if we get that message across and we will continue to do so - that that in itself will underline, as I have already said, our feeling that the euro has a strong potential to appreciate.

Let me add that I do not believe that it would be appropriate to introduce the IMF as a supplier of help through standby arrangements or through any such kind of help.

On the other hand, the recent further appreciation of the euro, as I believe Mr. Welteke has also said yesterday or today, has no negative impact on the competitive position of Europe vis-à-vis the rest of the world.

I have no reason not to believe them, and again I trust their statement that it is in the interest of the United States to have a strong dollar, strong vis-à-vis the other major floating currencies, including the euro.

So this measure is addressed to a broad set of banks, and we believe it is going to be more effective today than it would have been a few months ago.

We believe that this measure is going to be fully effective for at least two reasons.

Before answering your question I believe that at the last press conference you asked me a question on the pension reforms and I would just like to confirm what I said last time, namely that we approve the pension reform in France.

Again, we have a job to do today, and I believe that if we all live up to our responsibilities and have a solid sense of direction, we will succeed -- as we have succeeded remarkably in our monetary union since the setting-up of the euro.

But the fact that we cross-check with the monetary analysis on a longer-term perspective, we believe, ensures a better anchoring of long-term expectations for inflation.

We do what we believe we have to do and, of course, the circumstances are changing, the environment is changing, new data are coming in, such as the good surprise as regards growth last year.

In our monetary policy concept, we believe that this cross-checking is very important.

This decision of 19 June has been reaffirmed by the Chinese Government, and we believe this will be positive for growth in China and for balanced growth at a global level.

And we do believe that the best contribution to maintaining the current climate of robust, even strong growth throughout 2000 and 2001 and even beyond that is to preserve the climate of price stability.

We do believe that the monetary policy stance we have adopted today is appropriate to current circumstances, including our assessments of inflation-area developments for the medium-term future.

We do what we believe we have to do.

Still, we do believe that the monetary policy stance that we chose to adopt on 5 October is the appropriate one in the present circumstances.

So, I believe we are being listened to, and governments and social partners can be certain that we will not be silent for a long time.

We have - I believe, in one of our last Monthly Bulletin - given an account of structural measures that have been taken here and there and everywhere.

At this point in time, we believe there was enough to communicate for just one meeting and we will cope with this later on.

We do believe this to be a temporary shock to confidence, the significance of which should not be overstated.

I can only say that we strongly believe - and in our discussions this morning it was repeated and repeated, and in my introductory statement and also I repeated it - that the euro is undervalued, that there is a misalignment in the currency markets and that there will come a moment at which that will be corrected.

I believe that profoundly and it was also the case for Wim Duisenberg and our first team in the Executive Board, it is now and will be the case with Mario Draghi and the team.

{'cautious (120)', 'believe (492)'}

We believe that when you look at the immediate, real-time estimate of the output gap, and then you look at the same analysis of the output gap one year afterwards, or two years afterwards, you see such huge differences that you have to be cautious.

We believe that we still have to be cautious and to be prudent.

{'cautious (120)', 'may (1031)'}

All that being said, on growth you may also remember that we were more prudent and more cautious than many observers, commentators and economists.

The staff of the Eurosystem is forecasting that overall growth this year will or may be -LRB- because we have to be very cautious -RRB- 0.3% higher than in the last assessment in the projections of the ECB staff.

{'cautious (120)', 'volatility (407)'}

Again, I do n't draw a lot of consequences from what we are observing from one month to the other ; we have volatility and we have to remain cautious and prudent.

{'cautious (120)'}

It 's quite a cautious sentence.

I would say at this stage that what we have observed in the banking sector until now -- and I am prudent and cautious -- does not signal that we have a banking sector which is, at this moment in time, hampered by its level of capitalisation.

For this reason, we think it is important to have that in mind, even if I was very cautious and prudent, as you can see in terms of the assessment of the quantity of the figures.

As regards your second question, we are very cautious and prudent in this respect.

Even though we have to be cautious about how to measure this.

I have to say at this stage that we remain prudent and cautious because, again, these are facts and figures and we have to look at it and to be permanently alert.

At the moment, we consider inflation expectations to be firmly anchored, but of course we have to be cautious and prudent.

But again, the European Parliament said that they understood why we were cautious as regards the publication of minutes.

I remain very prudent and cautious and I will not respond to the question on the average of next year.

I remain cautious because on that point with regard to consumer credit for households, the figures for February, March, April and May are 6.7%, 7.1%, 6.9% and 5.9%.

Let me repeat that we are cautious.

But again, I am prudent and cautious, and we have to be sure that we draw all the appropriate conclusions with the benefit of hindsight.

So we have to be prudent and cautious.

I remain very prudent, very cautious in this respect.

We have been saying for years and with a lot of strength that they have to improve their own balance sheets, they have to take every opportunity to put aside their earnings in order to reinforce their capital, and they have to be very cautious as regards remuneration.

On your first question, I must confess that I did not see what President van Rompuy said, so I am very cautious.

Nevertheless, again, the Governing Council must remain cautious and prudent: we do not declare victory.

Instead we said: now we are in black figures ; it is better, but let us remain cautious and prudent.

At the same time, we have not observed in the banking sector a substantial, significant increase in leverage, and I am deliberately very cautious in saying this, limiting our observations to what we are actually observing, namely the regulated institutions subject to our supervision.

I fully understand that a number of observers and economists would look at it, but we are very cautious in this respect.

Also, we have to be cautious about putting forward our own personal views on what we would like to see, for two reasons: first of all because it is a highly complex discussion in our specific institutional set-up ; and second, because it is one of those decisions on which there truly has to be a consensus.

One of the reasons why we say that we have to be very prudent and cautious and why we say that we have a bumpy road ahead of us, even if we are out of this dramatic period of freefall, is unemployment.

So again, let 's remain prudent and cautious, but we have very recently had some news that was better than expected.

So I would be sort of cautious about imagining that we coordinate our actions, that we place strategic games in between us.

So we have to be extremely cautious.

I still remain cautious and prudent.

In terms of our own position, we would certainly be cautious in this respect.

Of course, we are cautious, we are pragmatic, we will see what the new data, the new facts, the new figures are.

I would be very cautious about saying that, very cautious indeed.

As I have said many times, we have to be extremely cautious with this recovery, because it is still fragile, it is still uneven and it is really starting from low levels of activity.

As you can observe, when we look at the nature or the composition of the beginning of a recovery, I am very, very cautious about the recovery.

But as far as we are concerned, we are very prudent and cautious.

So we have to remain very prudent and very cautious.

Having said that, we have to be cautious, because there was a previous depreciation of the euro.

As regards unemployment, which was your second question, I can only say that you are right in mentioning the fact that it is one of the major points which calls for us to be prudent and cautious.

Now, the fact is that the market participants have been more cautious and asked for less.

We are very prudent, cautious and modest.

Again, the main message is: we remain cautious and prudent.

So we have good news, but let us remain prudent and cautious, and let us do all that we can to preserve confidence, to be the anchor of confidence that is so important in the present environment.

We remain cautious.

In a sense -- but one should be very cautious here about not being too self-complimentary -- but certainly the gyrations that we are observing in financial and commodity markets, on other occasions, in other times, would have severely tested the resilience of the banking and the financial sectors at that time, and so far we 've seen actually that they stand pretty resilient.

That being said, I remain cautious and prudent.

On your second question we remain cautious and prudent.

But again I am prudent and cautious.

The more prudent and cautious banks are in this respect, the more they can put aside and reinforce their balance sheets.

But I remain prudent and cautious.

That being said I am very cautious because, as I said, since mid-September we have had a very significant intensification of tensions associated, in particular but not exclusively, with the collapse of Lehman Brothers.

But we will see what happens, and again, we have to be cautious.

The information that we have today when I look at everything would confirm that sentiment, but I remain of course cautious because we are expecting the full report of Eurostat to definitely clarify the situation.

But we remain cautious.

But again I remain cautious and prudent.

I remain very cautious.

Again it is an ongoing phenomenon and I remain prudent and cautious.

Again, I remain prudent and cautious.

That said, as we intended from the outset, we are very cautious and take pains to have the best collateral fully in line with our initial, unchanged concept.

Let 's also be cautious about that distinction between soft and hard.

Again, I remain very cautious.

According to available figures, and we have to remain cautious and prudent, we have seen growth in capital investment which is not negligible for three quarters: 0.5% in the second quarter of 2004, 0.6% in the third and 0.6% in the fourth.

I take for likely, I do not recall exactly, that it was a comment on the last observations of the last quarter of last year and there, again, we have to remain a little bit cautious on how to interpret what has been observed, in particular in Germany.

I remain very cautious.

So we have to be again cautious, look at the various data, know that it is normal to have and to observe differences.

Again, we always have to be very cautious, prudent and to look at everything.

We have to remain very prudent and cautious.

But, we again have to be very cautious.

One of the most frequent observations which is made about the Stability and Growth Pact is that we have problems in difficult times because the system is not, in its implementation of the preventive arm framework, sufficiently cautious when things are going well.

As regards the inflationary expectations, we have to remain very prudent and cautious, but until now the surveys have been confirming their correct anchoring.

All that we have seen up to now confirms that we were wise to be prudent and cautious.

I myself spoke of a bumpy road, and I remain very cautious and prudent.

But you will remember that, when we made the choice of the monetary policy strategy last year, and we made the choice of the reference value, one of the explanations for calling that a reference value was that we were cautious for many reasons.

In response to the rest of your question, it is good to be cautious and prudent regarding sensitive matters and I would not comment in particular on Ireland.

We consider that we have to remain very cautious and very prudent.

We were prudent and cautious.

Let me only say that, in assessing the situation, we have to be very careful to always remain cautious and prudent.

{'cautiously (8)', 'possible (785)', 'risk (3278)'}

It goes without saying that we apply risk management as attentively and cautiously as possible.

{'cautiously (8)'}

Second, speaking very cautiously, I think that the consolidated deficit for the euro area as a whole is between 6.5% and 7%.

We are following the interaction with the banks in the three countries that have programmes very cautiously and very attentively because they are all part of the overall programme that had been negotiated.

{'clarification (45)', 'roughly (19)'}

And second, this" close to 2% '' is not a change, it is a clarification of what we have done so far, what we have achieved -- namely inflation expectations remaining in a narrow range of between roughly 1.7% and 1.9% -- and what we intend to do in our forward-looking monetary policy.

{'clarification (45)'}

With our clarification now, that we aim to keep inflation at close to 2%, I think it is clear enough that we are not blind in the eye which identifies deflationary problems.

But as the President has already said, even if we had had the same clarification back in 1998, our policy would not have been any different.

So I do not expect -- and there is no reason to expect -- a different monetary policy on the basis of the clarification of the strategy, which was decided on today.

Today 's clarification helps to this end.

On your first question, which is a good question, and I think permits me to provide clarification: For reasons that are manifold, the Eurosystem has a relationship with the commercial banks which is such that the level of refinancing operations is very large in comparison with a number of other central banks, and in particular, I have to say, in comparison with the US Fed.

So, there were four or five points of clarification, of fine tuning of the framework, with the main change being the definition of the objective, which before did not have this idea of below, but close to, 2%.

As you noted in my presentation of the evaluation and clarification of the monetary policy strategy last month, and as you noted in my statement of today, we reversed the order in which we discussed the two pillars.

Since, as you know, the strategy has not changed but merely been clarified, this decision would also have been taken had we not made this clarification public.

So the very fact of saying it is itself a very powerful clarification of our reaction function.

We said that in the clarification.

And we had a clarification in 2003.

The Governing Council has decided, again unanimously, to ask for clarification by the Court of Justice of the European Union whether individual security measures imposed on the Governor of Latvijas Banka by the Latvian Anti-Corruption Authority on 19 February 2018, have had the effect of relieving him from office and they comply with Union law, in particular with Article 14.2 of the Statute.

We are asking the ECJ for a clarification on the present situation.

And this communication opens the way for a clarification by supervisors of the implementation of the measures that determine the so-called MDA, the maximum distributable amount.

It 's an additional clarification I make.

So as far as any clarification is concerned about the future, we have time until I would say December or even earlier.

Let me first make a clarification, because there has been a lot of press on this point in the last week.

The first clarification is purely factual: the nominal amount of collateral being posted was not EUR 80 billion, but EUR 10 billion.

The second clarification is that all this had no impact at all on our lending.

It was reiterated at the time of the clarification we made in 2003.

In the next European Council we all expect a clarification of this vision.

{'conditional (51)'}

We are always conditional and we are always free to do what we judge to be appropriate.

So, again, it 's true for the staff projections of the ECB as well as for all projections: they are highly conditional.

There was a general reiteration of the point that convergence of the inflation to our objectives remains conditional upon the very substantial monetary accommodation that is now in place.

Stimulus upon which all the path of inflation is projected, is conditional.

We are always" conditional '' but that does not mean that we do not extract the trend from the data.

At the same time it clearly is a sign of the readiness of the Governing Council to adapt the parameters of the programme to the situation, so as to ensure the full implementation of the programme, because we should n't ever forget that the inflation path that is projected to reach 1.7%, if I 'm not mistaken, now after the revision, in 2017, and the growth projections, are both predicated, conditional upon the full implementation of that programme.

So, we have given forward guidance that said that, based on our medium-term outlook for inflation, conditional on economic activity and money and credit, interest rates are expected to stay where they are or go lower.

You know that all our decisions are conditional on facts and on figures and I have said this sufficiently frequently for you to be fully aware of this.

But such convergence remains conditional on an ample degree of monetary accommodation.

That this recovery is conditional upon the full implementation of our monetary policy stance, so let 's never forget that.

So at the same time, the projections are conditional on the full implementation of the monetary policy measures that I have just read out.

The projections of recovery both in output and inflation are based, are conditional on the full implementation of the QE programme as announced in January and the full implementation of all the credit-easing measures that have been announced in the course of 2014.

So again, I can repeat, the existing projections are predicated, remain conditional, on exceptionally supportive financing conditions, which to a large extent do reflect our monetary policy, and therefore the Governing Council tasked the committees.

`` Importantly, '' -- importantly --" the projected path of inflation remains conditional on exceptionally supportive financing conditions which to a large extent reflect our accommodative monetary policy. ''

We are always conditional.

For two reasons, given the present economic situation, but also we always have to remember that the continuing convergence is conditional on interest rates remaining ; on reinvestment for an extended period of time ; on all the other decisions we have taken.

In fact, the reaching of the objectives in terms of inflation and growth is predicated, is conditional, on the full implementation of the monetary policy stance as it has been designed, as it has been announced, as it has been implemented.

{'conditionally (2)'}

Conditionally with an ESM and an IMF presence means that countries have to act ; it means that OMTs do not start without programmes.

{'confuse (24)'}

We should not confuse the rate of growth of the monetary aggregate and the overhang, the stock.

It 's easier to have it if you have every six weeks, because it gives space for producing the account in a way that does n't disturb the expectations for further action and does n't in a sense confuse the reception by the markets of the previous action that 's been taken.

Again, let us not confuse the appropriate functioning of the money market and the monetary policy stance.

On the first question, it is very important not to confuse the words and concepts themselves.

Some of them would say that they are in a situation which is difficult and would ask for help, while others would say that they are in a situation which is solid and strong and resilient and they should not all be confused.

I will also say again that you should never confuse the role of the supervisory authority with the involvement, when unfortunately necessary, of the Treasury.

And all this is something that we should not confuse with deflation, because -- on the contrary -- it is a factor that is expansionary, because we are distributing purchasing power to our fellow citizens through lower prices of oil and commodities.

That 's a good question, because it allows me to clarify what is a significantly confused perception.

So, we do n't confuse the two, not at all.

We should not confuse this readjustment of prices, which is actually welcome, with deflation.

On your question about the present situation, let me first say that we should not confuse the euro as a currency with the issue of the difficulty of preserving financial stability in the euro area as a whole.

We will announce the exact technical details later on, but this is not to be confused with the SMP.

I draw again your attention to the following: we consider that the non-standard measures and the standard measures must not be confused.

First of all, one should n't get obsessed about weekly figures of flows because one is bound to get confused, the first remark.

{'confusion (26)', 'might (766)'}

So you have to have an interval of time that is such that the published account does n't actually create confusion with respect to the decisions that have been taken and does n't create confusion in the expectations about the decisions that will or might be taken in the future.

{'confusion (26)', 'perhaps (538)'}

A yearly review in this context has perhaps led to some confusion.

{'confusion (26)', 'seem (653)'}

We did notice that we were widely reported - as reflected in the last but one question - as seeming to create diverging views and confusion in markets.

{'confusion (26)'}

It 's just one good opportunity to clarify some confusion.

So it is completely and materially irrelevant, and unfortunately, there was major confusion in communications.

So that is simple, but it 's very important to make it clear, because there has been confusion.

On the first point, I 'm afraid there is a certain amount of confusion.

I do n't think Mr Asmussen has ever said that, and there has been confusion.

There is no confusion on this point.

So I do n't think the markets are actually disagreeing with the assessment made by the SSM, but there has been a significant amount of confusion, and I hope that this exchange will help.

Oh, on this point, let me just make a point, which was a source of some confusion.

So, one should avoid this confusion between the euro as a currency and the issue of financial stability in the euro area.

{'contingency (34)', 'anticipate (153)'}

It 's a new instrument of monetary policy that will be used for contingencies that we do n't see now, and that 's what we anticipate.

{'contingency (34)', 'could (2094)'}

But others, later on, there was a comment as far as I 'm concerned this programme could actually stop immediately and markets reacted as if that were a serious contingency.

{'contingency (34)', 'depend (251)'}

What instruments we decide to activate will depend on the contingencies we have to face.

{'contingency (34)', 'likelihood (25)'}

It is thoroughly imprudent to create contingency plans where we see no likelihood of such events happening.

{'contingency (34)', 'may (1031)'}

You may remember one of these contingencies was an unwanted tightening of monetary policy on the short-term end of the market.

Well, there may be two contingencies which may push us to do more, and that 's what the paragraph that I 've just read implies.

And this may be due to either - or to both, either/or, either/and - the certainty by the markets that, if we were to see such transmissions, we would certainly act, being one of the contingencies that I mentioned for action, and/or the certainty that these factors are temporary and they will wash away, as it has happened on several other occasions.

{'contingency (34)', 'might (766)', 'sudden (31)'}

That 's the most important thing that we can do today, to preserve the solvency and the robustness of the Greek banking system, and also to this extent, the ECB has asked the Eurogroup members to make sure that the recapitalisation fund of something around $ 10 billion be readily available to face any sudden negative contingency that might materialise.

{'contingency (34)', 'suggest (391)'}

Also if you read the words, these are really unlikely contingencies now, the ones that would suggest that we would activate this easing bias.

{'contingency (34)'}

Your second question -- which instrument would we deploy against which contingency -- is actually a very hard question to answer, and we have n't really reflected on that.

The discussion was unanimous in looking back at the monetary policy decisions taken in December and stating that they were the right policy answer to the contingencies as viewed, as estimated in December.

The ECB is ready for all contingencies.

And the two contingencies that I mentioned are really an unwanted tightening of the monetary policy that comes from the short-term markets and gets propagated to the long term and/or a worsening of the medium-term outlook for inflation.

And we asked ourselves whether the contingencies I hinted at last time that would actually elicit monetary policy decisions, had taken place.

The two contingencies are: -LSB- 1 -RSB- are the measures to be taken going to produce the effects?

There are two contingencies we look at.

The first contingency is that our current measures are not enough.

The second contingency is if our medium-term outlook for inflation expectations were to worsen.

And the discussion was basically aiming at what sort of contingencies would require action immediately or later on.

This was when I was discussing trade measures, but it applies to all kinds of contingencies.

It 's part of a reaction function and it does say that if things were to turn less favourable -- and here, just stop a moment: if things were to turn less favourable, it 's a set of contingencies which is more benign than the tail-risk contingency embodied in the expectation on rates, and as such it 's still there.

And frankly, I think that, right now, the ESM and the EFSF with the new modalities are big enough to cope with the contingencies that we can envisage now.

But the more general issue is really, I think, we should focus now at this contingency in finding a strong agreement.

{'contingent (4)', 'might (766)'}

The other countries have taken note of this declaration that made the achievement of this goal more or less contingent on the attainment of a growth rate of 3% in 2003 and 2004 of 3%, which might be considered to be -- to say it prudently -- on the upside of the potential growth rate of the country.

{'contingent (4)'}

One of which is that it 's both state contingent ; in other words, we have to look at the general situation of the convergence process and its state.

{'could (2094)', 'almost (134)'}

You can almost literally quote the Treaty in this respect, since today 's move could be taken" without prejudice to price stability '', and it thereby supported the other goals of Economic and Monetary Union, such as economic growth.

{'could (2094)', 'anticipate (153)'}

We have also the administered prices and indirect taxes which could go over and above what has been anticipated and priced in present projections: our projections, as well as the projections of the market, of the observers and economists.

And the main one is that the higher than expected import prices as a result of higher than expected oil prices, other raw material prices, and the prolonged, depressed state of the exchange rate will work their way through more than could be anticipated two or four months ago.

There is also the point which you have mentioned, which we consider ourselves to be very important and which has to be examined very carefully, namely what we call a stronger than currently anticipated pass-through of past oil prices and I could add of past commodity prices.

{'could (2094)', 'anticipation (10)'}

I think we have reason to be satisfied, that we have demonstrated that this new body, the Governing Council of the European Central Bank, could take decisions in time, in an effective way and in anticipation of future developments.

As regards the bank lending survey, we have no anticipation of what we could see in the future.

{'could (2094)', 'appear (202)'}

We took it seriously from the very first day, as you know, and our judgement appeared to be right in this respect, i.e. that it was a very serious and very significant market correction that could last.

And this is largely due to the fact that the first quarter appears to be resilient, which, whatever the slowing down of growth in the second semester is, could permit us to have an average rate of growth for 2008 which again is very much, in the view of observers, public and private, in line with what we had said previously.

{'could (2094)', 'assumption (263)', 'appear (202)', 'perhaps (538)'}

I said that if it appears, ex post -- which has yet to be proved -- that we have been able to pass through this difficult period without the real economy being very significantly, negatively influenced, which was the working assumption of a large number of observers, then perhaps part of the credit could come to the central bank.

{'could (2094)', 'assumption (263)'}

We are not making the working assumption that it could be a hard landing.

As regards this assumption that there could be a catastrophe, if I understand it well, and that losses could be registered and so forth, the position of the Governing Council is based on very serious reasons and general principles.

{'could (2094)', 'believe (492)'}

And we said that we believed that we could improve the implementation of the Stability and Growth Pact without changing the wording.

I know that there are a number of schools of thought that believe that the US will continue to be going steadily, others are thinking that we are at the beginning of something which could be more ample.

We are solemnly telling all economic agents, corporate businesses, price-setters in the economy and social partners that the worst decision they could take would be precisely to believe that what we are observing today, namely this protracted period of high inflation, will last in the medium term.

This is a prouesse -LSB- amazing achievement -RSB- on the part of the euro, because, as I have already said, the markets and global observers did not believe in 1997 and 1998 that we could deliver a new currency that would be as credible as the best legacy currencies.

And we strongly encourage them not to embark on tax policies that would counter commodity price increases because we believe it could be counterproductive.

I believe when I stated in my introductory remarks that the outcome of ongoing wage negations in some regions of the euro area could become a matter of concern, I think those who can hear can also listen.

I believe I should not make any comment that could be interpreted in any way as influencing decisions.

And if we could go in this direction I believe that we would all be better off: of course, first of all the countries concerned and certainly the Eurosystem and the European Union as a whole -- the remark was, if my memory is correct, about the European Union as a whole -- and I can tell you that it is also a recommendation which is made by this institution to all countries.

And then there is this 33% issuer limit, which means that, if all the other conditions are in place, we could buy bonds in, I believe, July, because by then there will be some large redemptions of SMP bonds and therefore we would be within the limit.

What we could do and what we have done with respect to this is broaden the eligibility rules of collateral so as to attract the greatest number of banks, including those banks of a small/medium size which we believe are closest to the SMEs.

And if we moved interest rates, either down or up, we believe that it could increase medium - and long-term market rates, not decrease them.

{'could (2094)', 'cautious (120)'}

So to summarise -LSB- in English of the above answer given in French -RSB-, we are far from having a credit bubble now, but we have to remain cautious and alert in order to avoid having for too long a time the non-conventional measures that could be inappropriate in this respect.

You could have seen, as we have, some surveys that are encouraging, but we have to remain cautious.

{'could (2094)', 'cautiously (8)'}

Of course, I do not exclude any further decision that we could take when the time comes: we will follow the situation cautiously, but at this stage, there are absolutely no such intentions.

{'could (2094)', 'depend (251)', 'probably (249)', 'perhaps (538)'}

As regards the money market evolution it is true, and we are very satisfied with this on both sides of the Atlantic, that the tensions, as far as we measured them, have undoubtedly diminished and, depending on the measure, you could say that they progressively came down from a very high level and now we are -- as regards the spread between the three-month rate and the overnight rate in three months ' time, which is a good measure, perhaps, of the tension -- we are probably around 40 basis points now.

{'could (2094)', 'fluctuation (18)'}

And let me say that we are convinced that sharp fluctuations between major currencies could have implications for economic and financial stability.

{'could (2094)', 'may (1031)'}

And they will decide what to do, because it is up to them, as they are using, or may be using, public money, or they may be considering that the further bail-in could be feasible.

There may be other phenomena, on which we are also looking at, including market phenomena, which could also explain what we are seeing at the moment.

We have had some disappointments, may I say, but one factor that could help to attain this goal, of course, once it works its way through, is the effect of the recent strengthening of the euro, provided that it continues.

The second point is that precisely that episode may have injected an early repricing of assets, which could actually further protect the euro area from unwanted consequences.

You remember when we experienced this dramatic fall in oil prices there were many worries that there may not be all that pass-through into higher spending but actually the opposite could take place having negative second round effects on lower inflation.

But I have already mentioned that we have a number of cartels that could explain why these evolutions may not be as symmetrical.

But it may well be that, if the supply increases, the upward movement in oil prices could be reversed.

Our position is that we try to do exactly what is needed at any moment in time, without being hampered by pre-commitments that could actually prevent us from doing whatever may be necessary.

This may certainly be partly the consequence of an increase in productivity, which, as the economists you mentioned correctly say, could be cyclical.

The sellers may well not be banks only by the way ; they could be also institutional investors.

{'could (2094)', 'maybe (396)'}

Maybe I could just say that the team that we make up, namely the monetary team of seventeen that met under the chairmanship of Wim this morning, is profoundly and unanimously united behind its President.

Question -LRB- Translation -RRB-: Mr. President, maybe you could explain something.

Maybe Market News International could repeat its question.

{'could (2094)', 'might (766)'}

But it could have some temporary upward effect on inflation rates, which you might interpret as an external shock, as was the increase in oil prices last year.

I could go back to our analysis in December and at the beginning of this year, because you might remember that we had not that good data in some respects.

So people should be aware that if this might be seen as a threat to our independence, it could cause long-term damage to our credibility.

{'could (2094)', 'perhaps (538)'}

Perhaps in some cases it is too early to see the benefits, but I also think that the full benefits could be achieved if we were to clarify what the euro is going to be in five or ten years ' time -- this is where I think the efforts of the leaders are oriented.

So, if you need some other information perhaps you could communicate to me what your assessment is of what the market is doing.

Some perhaps could have imagined that we would have gone higher, and others perhaps would have thought before the discussion that we could wait a little longer.

I said that we could perhaps then reflect on tomorrow, and that tomorrow would call for changes to the Treaty, that tomorrow would allow the centre to replace, in terms of decision-making in a number of domains, national governments that were in a difficult situation.

What we do in the changed format of the introductory statement, and perhaps you could again see this as I think it reads much better now, is that we start with more short-term developments in the economic analysis part and then move finally to monetary analysis with a focus on medium to long-term elements, before organising the cross-checking.

Perhaps you could say a word on that, Lucas.

On the ECB 's collateral framework, perhaps I could reserve your question until later because we have a decision to announce today, which I will do at the end of the press conference.

I could perhaps call that a set of principles and I am very attached personally to the voluntary principles or benchmarks for appropriate behaviour and conduct that would be devised by the industry itself.

Well I thought that I could not be clearer than that, but perhaps I should repeat what I said two days ago.

At the time when we had had the feeling that consumption, household consumption in particular, was very weak, abnormally weak, and that part of this weakness was due to, perhaps, the sentiment that inflation would hamper purchasing power in the household constituency in future, we had said to households that they could be confident, that we were there, that we were the guardian of the currency and that we would take care of this threat that some households perhaps felt looming.

As you could perhaps see in March this year, market expectations were that we would not increase rates at any point during the year.

Perhaps, on the basis of some forecasts, it could even go over that average figure.

And I would also say that when you run sound policies and improve competitiveness you not only have growth and jobs, but you also have resilience, which is demonstrated by the fact that the German success has taken place during the worst crisis since the Second World War, perhaps could have been the worst since the First World War.

Overall, having taken into account all the elements of the situation -- and they are very numerous, as I have said -- and all pertinent analyses, our conclusion was, as I have said, that we had sticky inflation, we had inertia in inflation, which could perhaps persist for some months, and that we would then see inflation clearly coming down in line with our definition of price stability.

Perhaps, I could respond to the first question and ship the second to Lucas, if he wants it.

Perhaps you could put the question directly to the central bank in question and to the supervisory authority in question, because both the central bank and the supervisory authority were at the meeting in Basel.

Perhaps we could look at the past.

As for the third question, perhaps I could give the floor to you, Jens.

Perhaps you could interpret what has been observed here and there as precisely part of the difficulty of this pedagogic challenge, this communication challenge which is a challenge for governments, parliaments, opinion leaders in general and also for this institution.

On your first remark I must confess that central banks are used to hearing that from time to time and, if I measured the level of decibels on behind the curve and ahead of the curve and so forth, I would say that, perhaps on this side of the Atlantic, we had slightly fewer decibels than what I could observe on the other side.

And you also have the adverse feedback loop between the real sector and the financial sector, taking into account the magnitude of the recession, which could perhaps have been underestimated in the projections.

As for the rest, I would say that this is one of the ideas proposed that could perhaps be studied further by the working group that President van Rompuy is going to set up, in line with the decision of the Heads of State and Government.

And perhaps you could give us credit for having defended the Stability and Growth Pact in all circumstances with extreme determination, including when the previous Chancellor of Germany was against it.

{'could (2094)', 'possibility (303)'}

At this stage, I would only say that we do not exclude the possibility that we could have a profile next year which would be slightly different.

We consider that the possibility is not excluded that, after having carefully examined the situation, we could decide to move our rates by a small amount in our next meeting in order to secure the solid anchoring of inflation expectations, taking into account the situation.

We do not exclude the possibility that such an impact could come, so we have again, in this domain as well as in others, to remain ready to incorporate any new information.

So, I do not rule out the possibility that we could have positive quarter-on-quarter growth and then a much less flattering evolution in the next quarter.

So I do not rule out the possibility that we could reduce the width of the corridor.

There are four possibilities: we could withdraw the non-standard measures while decreasing or increasing the interest rates.

I do n't of course rule out the possibility that we could decide at that time, but there is certainly no rule and it has to be very clear.

You mentioned the possibility that our own assessment of future inflation could be lower.

I do not exclude anything, including, the possibility that the Commission could take legal action.

{'could (2094)', 'probability (40)'}

Of course it is a balance, and you have a certain probability that things could also improve a little bit.

If we wanted to communicate more simply, I could say at the next meeting that the probability that we increase rates is x%, the probability that we leave rates unchanged is y% and so forth, but that is not the way we operate.

{'could (2094)', 'probably (249)', 'sudden (31)'}

On your first question: actually I never thought that we could profit out of sudden moves coming from unauthorised and probably uninformed sources.

{'could (2094)', 'probably (249)'}

Comparisons by country are actually appropriate up to a point, I am not talking about the 430 small German banks -- incidentally I would love to review the places, the towns and villages where these banks are, but I can not do it because often they would probably be the only bank in town and so they could be recognised.

As I said, the dis-anchoring of inflation expectations would probably be the worst thing that we could do in the present circumstances.

In relation to the Irish property market, you probably will recall that last year, house prices in Ireland were rising at about 15% and at that time, I indicated clearly that I thought that that level of increase was too high and I thought that it could not be sustained.

I take it that what has been done has been responsible and I think we could certainly prove that we -- each of us, in our own environment -- probably did what was required by the situation.

{'could (2094)', 'risk (3278)', 'believe (492)'}

As regards your second question I can not elaborate too much on that because it would take a long time, but we believe that our own monetary policy concept, which is based on two pillars -LRB- i.e. economic analysis and monetary analysis -RRB-, allows us -- thanks to the monetary analysis and the fact that we have a medium-term definition of price stability -- to incorporate elements that are associated with rapid increases in outstanding credit, including the impact on asset inflation, which could itself create inflation through the wealth channel and, if boom is followed by bust, destabilise prices through the deflationary risks that could materialise.

In all circumstances, also when we face major difficulties, I believe it to have been extremely important that the anchoring of inflation expectations could work against inflation, but also -- in the period we experienced after the collapse of Lehman Brothers -- against the materialisation of inflationary risks.

{'could (2094)', 'risk (3278)', 'may (1031)'}

There could also be another reason: that simply risk premium may have gone up.

And then there was one other principle to which we also paid due respect, that is: if you have a Governing Council which comprises countries of very different size and you limit the voting frequency of individual members over time, then you would run the risk that decisions could be taken by a number of Governing Council members that would be, may I call it, unrepresentative for the euro area as a whole if you measure it by GDP or by population or however.

{'could (2094)', 'risk (3278)', 'possibility (303)'}

The lower -- the possibility that the DFR, deposit facility rate, could go lower -- was predicated on the strengthening or the materialisation of this tail risk.

{'could (2094)', 'risk (3278)'}

OMT is a well-specified programme that could be activated if certain conditions are verified and it addresses risks to price stability that could originate from redenomination risks.

However, let me also add that this would be a limited way to look at the situation, because the geopolitical risks in the area could quickly become substantial and generate developments that are unforeseeable and, potentially, of great consequence.

We constantly look at the various indicators that we have at hand and that could substantiate the deflationary risk, but we do not see materialisation of such a risk at the moment.

We asked ourselves questions more about what sort of risk could undermine our baseline scenario.

So, all I could say, is that at a global level there is very large consensus and we are part of this consensus which considers that the risks that are at stake are the oil price, which is a very important risk.

As I have said many times, it is also fragile, meaning that there are several risks -- from financial and economic risks, through geopolitical risks, to political risks -- that could easily undermine this recovery.

As regards the EFSF, it has been decided by the Heads of State and Government that it could intervene in the secondary markets on the basis of our ECB analysis, recognising the existence of exceptional financial market circumstances and risks to financial stability.

As regards your consideration on financial stability at a global level, I have already mentioned that we considered that there were a number of elements at the level of global finance that could progressively be corrected and, in particular, the under-pricing of certain risks I have mentioned.

When I referred to the fact that we had ample liquidity which could materialise in some kind of risks to price stability, I was referring not to the present increase of the outstanding monetary aggregates, but the hangover that had been accumulated before the crisis.

But there are risks that could materialise, and we have to be vigilant.

As regards inflation, it is absolutely clear that we have to take into account the administered prices and administrative decisions that could influence the inflation risk on the upside.

I told you that we will continue to monitor closely all developments that could modify our assessment of the risks to price stability.

In answer to your question, when I said that we see some upside risks for inflation developments, I mean that the oil price could end up being higher than expected and this is linked to these risks.

We have signalled several times that this poses risks, but at the same time, we have also expressed that, in addition to the increasing debt, there has been an increase in the wealth of households, which is a positive development, and that the central scenario is still that this over-valuation could be corrected smoothly and not necessarily through an abrupt correction.

We see risks that this could happen, but it is not our central scenario.

But certainly criticisms of a certain type could be viewed or perceived as endangering the independence of the ECB, and therefore causing the sort of behaviour that you hinted at, namely delaying investment, delaying taking risks.

What we could simply say is that precise execution of the Stability and Growth Pact is an important element in the global assessment by the ECB of the balance of risks.

So, it could remove tail risks but ultimately, the initiative is in the hands of governments.

This is a risk because it could lead to a de-anchoring of inflation expectations.

To go back to your remark when I speak of downside risks to growth, I am referring to the general downside risks that I have listed, namely the pressures of protectionism, the risk of further increases in the prices of oil and commodities -- let us not forget that there are also all other commodities -- and also other global threats that could hamper growth in the euro area, but I would not refer particularly to the Italian decision.

In OMT full risk-sharing is fundamental for the effectiveness of that monetary policy measure and you understand why ; because it 's selective, it addresses specific countries, the countries are under stress, the debt sustainability is an issue and there are tail risks that could make things precipitate for certain individual countries.

A risk would be that further increases could be made.

I could add that we are permanently reflecting on the disorderly unwinding of what I would call in global finance the certain degree of under-pricing of risks, which is also something that we have to consider as a risk.

But there is another reason: I do not think that our fellow citizens will twice accept risking 27% of GDP of taxpayers ' money to support the financial system in order to avoid what could have been a great depression.

We had said already in January and February that the balance of risk emerging from the economic analysis could move on the upside.

As regards risks to the upside the global economy -- and therefore foreign trade -- could be more dynamic than is presently foreseen or projected.

There are dangers that its effects could wane in 2020, so the risk there is of an increase in interest rates accompanied by a weakening of economic activity.

We are drawing all the lessons we can from the crisis at the global level, in the United States, in Europe, in other advanced economies and certainly also in the rest of the world, in the emerging world, with the idea that we could minimise the risk of unfolding of such a crisis through the appropriate strengthening of macro-prudential policies, through the appropriate improvement of rules, regulations, standards and codes in global finance, through the emergence of institutions designed specifically to look at systemic risk and macro-prudential policies - this is now the case, as you know, on both sides of the Atlantic - and through the appropriate coordination of economic and financial macro-level policies with a view to having macro-policies that will avoid imbalances and abnormally loose, unsound behaviour.

Then there would be, on top of the arithmetic augmentation of inflation expectations, additional risk premia: market participants would think that if one changes the definition of price stability once, one could change it again, so there would be no protection against future changes.

And all these flows are, in a sense, trying other jurisdictions to see whether there could be a better combination of risk and maturity.

Are we ignoring the financial risk that could be produced because of the abundant liquidity, the very low risk spreads, risk premiums, the very low spreads, the very narrow spreads?

{'could (2094)', 'seem (653)'}

We could see that the explanation we had on the portfolio shifts and then the unwinding of portfolio shifts, which was a convincing element in understanding what was happening, does not seem now in our own analysis to be convincing in explaining the present dynamism of M3.

But it seems to me that one element of confidence they could have, would be to see precisely the rapidity and the boldness of the reaction that has taken place until now.

I do n't see exactly the opposition but it could be here and there, but prima facie the two things seem to go together.

{'could (2094)', 'somewhat (273)', 'anticipate (153)', 'risk (3278)'}

We publicly said that this step in December was somewhat larger than one could have otherwise anticipated, because of the downside risks we saw emerging then.

{'could (2094)', 'sudden (31)'}

Could this modest recovery weaken all of a sudden?

But in terms of consequences, I can say that what the facts show is that there were limited spillovers in June, July -- May -- when, all of a sudden, it looked as if this tapering could be happening sooner rather than later.

{'could (2094)', 'volatility (407)'}

That being said, we also looked at the fact that it came after a long period of very low volatility, something which could be regarded, according to some analysis, as a normal correctional phenomenon.

That is also a good thing, because we, unlike other central banks, can gradually downsize our balance sheet without having to take any decisions that would, or could, create volatility.

It is a problem we see in a large array of segments of the money market, and a provisional conclusion I would draw from that situation is that once again -- but it is an observation I could make each time we had an episode of very excessive volatility in the market -- transparency is of the essence.

{'could (2094)'}

As you know, the English language comes partly from the Anglo-Normand and you could say that it is the Anglo-Normand style.

It is absolutely clear that it could go up or down.

However, this does n't exclude some little technical adjustments and which could lead to some lower interest rates in one or the other or both parts of the corridor.

I 'm not saying that in the meantime the real economy could n't actually recover more.

What Lucas could not necessarily say but what I will say is that, when I look at the report of the Bank of Greece for the time in question, I see that the Bank of Greece had reported both the deficit figures based on" delivery '' -LRB- national accounting -RRB- -- we are entering into technicalities here -- and the figures based on" cash payments ''.

And, as I have said, we are looking at the monetary gap that we are experiencing and we are trying to gain a better understanding of a phenomenon which I mentioned earlier, namely the fact that the portfolio shifts observed previously have not reversed, in our opinion, in the way that they normally could do or should do at this point in the cycle.

The issue of whether the IMF could be used as a channel is legally very complex.

A compact could be viewed as a three-pillar-concept: The first pillar is national economic policies geared to stability, growth and job creation -- fiscal stability, growth and competitiveness, and therefore job creation.

One of my collaborators said that compact could also be read as" community pact '', but that was not meant to be my initial suggestion.

The Nice Treaty included a so-called enabling clause saying that if the number of countries belonging to the European Union were to exceed a certain number, there could be an abbreviated procedure to change the decision-making process also at the ECB.

And we are already considering how that decision-making process could function if the decision-making bodies reach a rather unwieldy magnitude.

I already indicated earlier that I regard it as not unlikely that now, in May, we have reached the peak from which inflation could come down.

No, we could not, Mr. Barber, because the German Government has now finalised its draft law on the Deutsche Bundesbank, on the structure of the Bundesbank itself, but has postponed for a few months bringing the draft law on banking supervision or" Allfinanz '' supervision to the Cabinet - and subsequently to the Parliament, after having received advice on that from the ECB.

The fact that in the Netherlands, and fortunately to a lesser extent in Ireland, inflation has reached the figures they have, is in itself a cause for concern, particularly for the Dutch and the Irish authorities ; and, to the extent that they could have spillover effects on other countries, it could also be a concern for us and the Governing Council.

Therefore, the change that we introduced is not as big as suspected by some, and consequently, I would not underline any significant change in the projections that could be attributed to that change.

I would draw your attention to the following: the level of inflation, which is closely correlated with the unit labour cost and the costs in general in the economy, functions in such a way that what one particular firm would theoretically gain out of a theoretical abstract computation of real interest rates is much more than offset by a loss in terms of cost competitiveness: what is lost when inflation is above the average is much greater than what you could theoretically gain with a lower level of real rates.

Of course, you can refer to this as a tightening of monetary policy, but I like to use the expression" withdrawing monetary accommodation '' to refer to what we will do or could do according to the confirmation of our baseline scenario.

But we should not neglect the fact that there are also all the elements that could characterise a cartel.

In a sense what I said before could be used in several ways: I 'm not going to comment on politicians ' statements.

And being imperfect, is fragile, is vulnerable, and does n't deliver all the benefits that it could if it were to be completed.

Now, it was quite understandable if you had that situation, and the amounts and the modalities of ELA were to be made public, this -- it was thought, at least -- could worsen the situation of that bank at that time.

The other actor, very important actor, is the IMF, which is the only institution that can actually put in place a facility that could help emerging market economies to cope with transient but very significant spill-overs.

And this is one of the reasons why I said that we do n't see as yet a significant correction of these dynamics that could be interpreted as associated with the financial turmoil.

This rise in interest rates could be explained in a variety of ways, and I think we went through this last time: higher expectations of inflation, higher expected growth, or simply higher term premium.

So this sentence basically says what I 've said all throughout, that if we were to see an unwarranted tightening of monetary policy, which could lead to a change in the medium-term outlook for price stability, then we would seriously think, and we have instruments to address this.

The Governing Council could nevertheless decide even before that if there was credible implementation.

But we expect that there could again be ups and downs over the coming months.

Any proposals that could emerge from the EU Council will certainly be examined very carefully by us, with the idea that we can improve things.

Had we not had the Stability and Growth Pact, it could have been said that we were putting the cart before the horse, because we were very bold in introducing a single currency without having a federal budget.

We also insist -- although it was n't mentioned in the question -- on the fact that the monetary analysis calls for vigilance, as I said, because we see dynamism of M3 and dynamism, by definition, of the counterparts of M3 which means that we -- from that standpoint -- can see that we could have an overhang of liquidity.

Ex post, one could say that the policies pursued over the last four years have shown that this was indeed the strategy pursued.

That is why the asset quality review is so important, because it could actually shorten this period of time.

As for the second question, the two LTROs were conceived and designed to make sure that also small banks, which are also the closest to the SMEs, could have access to that so that we could take this money closer to the SMEs.

If we look at this from another angle, namely what all this does to the reference rate, I would say again that it is a matter for the Commission to elaborate a reference rate that could stand against all these negative developments and come out stronger with respect to these things.

I could certainly comment on that.

On the global growth rate, we could see the immediate impact on the global PMI for instance.

We never considered that there was a" quick fix '' that could allow us to resolve that situation, and everything that has happened since then has proved that our analysis was right.

At this stage, I do not want to comment on or qualify what we could do or not do.

And I could say the same for what we are extracting from markets, even if, of course, the break-even on the basis of a very short number of years is influenced by what is expected in the present year.

I do not exclude that we could decrease rates in our next meeting.

This is something which I could describe as a non-standard set of decisions that have augmented considerably, to say the least, our own risk-taking, because of the increase in the size of the balance sheet.

I would not say that we have constraints that explain why we could not introduce other non-standard measures.

You could say that.

As you know, we are supplying one-week, one-month and three-month liquidity on a full allotment basis and we could see some technical factors recently explaining why the overnight interest rates were going quite high.

I will not say anything on the decision we could take in the weeks to come, and in particular next time.

And, of course, it means implicitly that we could continue to engage in non-standard operations without having decided to set a zero rate.

I would only say and confirm that there is a consensus in the G7 communiqué to signal that some currencies -- not the particular currency that we are talking about here, i.e. the Chinese currency, but a number of currencies in Asia -- could certainly be allowed to appreciate, to some extent, by market forces, in a progressive, orderly and smooth fashion, which is not the case today.

As you know, the reason why there is a consensus in Europe on structural reforms -- and we are very keen to communicate this element of the European consensus -- is precisely because we trust that those structural reforms will permit an increase in the growth potential of Europe, which is below what could be observed if we had the structural reforms.

As regards VAT, you could see yourself what has happened with the VAT decision in Germany.

I have already noted here that we could simultaneously see the slowing down of the pace of price increases and the slowing down of the growth of outstanding credit in a number of economies that had observed a great level of buoyancy in the real estate market.

We can now see a pick-up in Germany and a slowing down in a number of countries: I remember I could say that in Ireland when we had the outside Governing Council meeting in Dublin and we could say that also for Spain, so we see something like a progressive" rapprochement ''.

One of the reasons why securitisation actually got, rightly so, a bad name was that some of these products were so complicated that they could not be priced correctly, and so that 's why transparency is going to be a key feature of this new concept.

In this case, there would be also the interest in promoting securitisation that could actually help, as I said before, lending to the real economy and to the SMEs.

This could help banks from two perspectives.

Regarding your second point, I do not see how President Sarkozy 's attendance at the meeting could change the dialogue between the ECB and the finance ministers.

I could of course also embark on national data in various countries.

We could expect some reversal in the future, at least a partial reversal, of the portfolio shifts observed in the past from assets outside M3 into assets that are included in M3.

And if done appropriately and financed appropriately, it could help to boost economic growth.

I think you could infer this from what I said.

First of all, two weeks ago, the situation in the markets was such that we thought it advisable to explicitly co-ordinate our thoughts and statements about the monetary policy situation and monetary policy decisions so that we had an agreed statement which all of us, and I mean all the members of the Governing Council, could use so that we would indeed speak with one voice.

For the time being, we have come to the conclusion that it is neither advisable with regard to the operational part of our work, nor for the monetary policy implications it could have, to change the schedule of our meetings at this time.

Could you take that one Christian?

We have always emphasised that if actual growth was developing at a higher rate than what we call the" trend potential '' growth, then we could of course accept the development of M3 being higher than the reference value.

Could I exclude any technical adjustment in interest rates?

So it could become a self-fulfilling expectation with consequences on the markets.

Let me say also that we are enormously grateful to the national supervisors, without the work of which this effort could not be undertaken.

Well they could come back again, and they could even increase and then we would react.

So, all in all, one could try to summarise the exchange of views we had saying that it was around the concepts that we 've expanded on on other occasions, like the concept of confidence that is basically generated by the growth momentum ; but also the fact that we need to be persistent and patient, because we are n't there yet.

It 's been very important in anchoring inflation expectations at the time especially when there was a danger they could become de-anchored.

The fact that we are invited to take part in the discussion will certainly not lead us to leak anything of what any assessment could have been.

By the way, the whole reasoning could be done the other way around, if we had inflation 4% and we wanted to bring it down, and we decided that 4% is the new objective.

It had the result that certain payments, large amounts of certain banks, could either not be paid or not be received, so that those institutions were compelled to take recourse to the lending or the deposit facility.

I can not think of any factor that could undermine this strong currency.

And, in that context, the ECB will not be in favour of any particular regime on exchange rates which could force it to put aside the primary objective which the ECB is pursuing, namely internal price stability.

I could myself find first pages of financial papers in which I had expressed that opinion, and it was very much the opinion of the central bank constituency.

On the second question -- the first question I have already answered -- certainly, there could be such an incentive.

As far as the money market is concerned, you could see what we have done and decided since 9 August and even today.

The world over, nobody thinks that we could be influenced.

That would be something which would be normal for us ; it could be more, it could be less, but it is an order of magnitude.

You could have said the same in reverse: that they were much too tough, or that we were too accommodating, but you know very well that it would have been a wrong analysis: we were doing what we had to do, taking into account the circumstances

All that being said, you could see what are our projections, the Eurosystem staff projections, and you could see that, as regards inflation, we see inflation for next year as an average between 1.1% and 1.7%, from 3.2% to 3.4% this year, so the disinflationary process I was referring to is very clear and will extend into 2010, as I said a moment ago.

I will not comment in any respect on what we could do next time.

We could have this scenario you are mentioning as well as others.

Well, if you go back three, four years ago and you ask yourself which policies were in place that could actually create jobs and expand economic activity, then you see that the recovery gradually firmed up driven by consumption and investment thanks to the extraordinary financing conditions that the monetary policy of the ECB has created.

So, if there were to be a change, we could change.

I am thinking about what would or could come in all countries in Europe on top of what has already been decided and taken into account today.

Everybody could see what we did in the past and make a judgement.

I could repeat it if you wish:" after today 's increase, our monetary policy continues to be accommodative with the key ECB interest rates remaining at low levels ''.

I mentioned some of them before but, in principle, we could even cut the interest rate, the MRO rate, further.

But we have in the first place to compare that with the alternative of doing nothing and what could happen to the fiscal situation of those countries that would lead in a few years ' time to programmes that would have to be much harsher, much stricter, with all the consequences that that would have.

Other members of the Governing Council said that the incoming data in the next month could also provide further information and so they reserved their views for next month.

Also, nobody could deny that liquidity is abundant in the euro area.

I was hinting at the 1980s as a time from which we could learn some lessons, but the 1970s were years of very high deficits and we basically all found ourselves, more or less to the same extent, in a situation of high inflation and recession.

There are lots of measures that could stimulate job creation in the private sector, and there are a certain number of measures at European level that could address the infrastructure spending issue.

These are jobs that could be sustained.

Its functioning fell short of both expectations and needs because it was created in a way that it could hardly be made to work.

So, when the position was taken that the new ESM could not be used to fill holes created by legacy assets which had gone sour, I think one has to define exactly what these legacy assets are.

This is much more than anything you could achieve by reducing the short-term policy rate.

And, I have always said that the only way to mitigate the impact of this budgetary consolidation, which is contractionary in the short term, is to undertake structural reforms that could increase competitiveness and exports, as well as create jobs and growth.

If you consider that before the summer we did not even have an idea of what this could look like.

Then, after a long period of maturation, in 1995-96 we saw the end of the paradox, because we could see a significant change in labour productivity increases.

I know that there are more optimistic schools that are thinking that we can see now the results of previous structural reforms and I do not dispute that it could be argued.

To the first question, no, we think our measures make a lot of difference, and have made a lot of difference in the sense of being very effective, even with the present pace of structural reforms which could be faster.

We could say that price stability and the present environment, which we are helping to create on the financial side, are elements of confidence for the households.

But recently for example we had the Five Presidents ' report, which was designing a path towards greater integration, and we 've seen several episodes where you could see, you could be actually quite optimistic, that the process is moving forward.

But I could go on and on and give praise to all governments in Europe !

I said it 's still premature to conclude whether these developments could have a lasting impact on output and inflation.

And so we 've just one word about the terms about our ELA communication as far as the future is concerned: the Governing Council agreed in principle that in future a national central bank could, together with a request for non-objection regarding ELA, seek approval from the Governing Council to communicate related elements, including the outcome of ELA, if it sees a benefit in doing so from a financial stability perspective.

Christine was saying that actually, even in this case, the ELA number was gathered by you thanks to your investigative capacities because it came out before we could announce it.

Your second question: as I think I said in the introductory statement, a review after six months was scheduled, and we found out that the ECB could actually buy more than the 25% limit in some cases where there would be no blocking minority by the ECB.

You can draw any conclusion from past observations, of course, but I have always said that we could act whenever needed.

Only the timing could not be foreseen but came at a very unfortunate moment.

I am sorry to be so long, I wish I could tell you more, but to translate all this into a perfect legal text which stands, we need some time.

Well, we hate using fixed formulas for certain situations, and despite the remarkable interpretation efforts by your colleague, Mr. Burckhardt, of every word and sentence that we say, well, as I said, we hate using fixed formulas, but we could have used the word" appropriate ''.

The point is that if we repeat it every month, you could infer from this that actually it is not forward guidance for an extended period of time but only for a month.

Could I just add something?

As I have said, we have a President and he could not be better.

In both cases we could see what I would call the ` second derivative ' changing its sign.

I can say that I could also sign that myself !

Of course, today one could consider that we have been vindicated in this defence.

We had a number of other points that were in the communiqué, so you could say that we had to make some room for the new points.

That is the reason why we consider that, we could recommend -- and it was a very important decision for us to take -- to the governments that they could step in and invest in the form of bilateral loans in the recovery of Greece.

I would say, at this stage, that we expect to engage in a programme that could be around $ 60 billion.

I gave you already the order of magnitude of what we could do in this domain.

We have not decided that the new level of our policy rates was the lowest level that we could never cross whatever the future circumstances could be.

As regards today 's decision taking into account all elements we considered that we could and we should go beyond what had been until now our main channel for enhanced credit support mainly by the refinancing of commercial banks which has, by the way, produced important results.

As regards your first question, you could put the same question to all central banks in the world, could n't you?

We are not in the position that we would have to defend ourselves against the fact that we could not get out of the non-conventional measures taken.

So it 's an evolution that we see from survey data could continue.

One of which, speaking of leverage, is given by the fragility in the banking sector and the NPL stocks in many countries that could have a much higher credit growth had it not been for the NPLs.

And that 's where the structural reforms come very useful, to create this environment where this transfer could happen, and therefore productivity could increase, with corresponding increase in wages.

As regards your second question on the issue of members of the euro area that could be in extreme difficulty, first of all the euro area is an area where you have considerable automatic help through the very existence of the single currency itself.

And one could also say that you have candidate countries and non-candidate countries.

As regards the present level of the main refinancing operations, we did not decide ex-ante that this was the lowest point that we could attain.

At this stage there has been no discussion with executive branches as regards any help or any guarantees or any support that could be given.

Again, if I could give you some data, that would be good.

It is the market forces that bring them down, it is not a target in the sense that you could say the Federal Reserve has a target.

And, if we could give you a ratio, a mathematical ratio between the weight of the first and that of the second pillar, then we would also be in a position mathematically to reduce the two pillars to one.

So it is just that the signalling effect - even if, theoretically, it could be provided by both systems - works well only with a minimum rate system.

To answer the last question first: I said the exchange rate, in my opinion, has - in the past, in recent months - clearly overshot a level which could be regarded as being more in line with the fundamentals.

In other words, the legislative changes should be such that the legacy NPLs could be adequately addressed.

But we proved in Madrid that we could increase rates also outside of Frankfurt.

But we know all the different views and so, finally, I could conclude as follows: the Governing Council decides that the main refinancing rate will be lowered from 3% to 2.5%.

There was also a good case for the ECB to be part of this, so that the ECB could actually have information about the solvency and about the financial stability of the states where the monetary policy counterparties would reside.

And the exchange rate as such could only have an impact on that mandate if, over time, the exchange rate itself were to be one of the factors undermining our efforts to maintain price stability.

So this angst so far has no evidence that could justify it.

We mentioned the modification of the current draft to allow for collegiality, which would be desirable, and without prejudice to the outcome of the current proceedings in Italy, as a result of its informal dialogue the Governing Council has come to the conclusion that the procedures followed in the context of the recent cross-border take-over bids concerning Italian banks were based on a national legal framework that allows for a degree of discretion that could be used in a manner that is not necessarily in line with the above-mentioned principles and objectives of the Community to which the Governing Council is attached.

And we could observe during the last months a certain tendency to go up.

And my last point is the following: Without prejudice to the outcome of the current proceedings in Italy, as a result of its informal dialogue, the Governing Council has come to the conclusion that the procedures followed in the context of the recent cross-border takeover bids concerning Italian banks were based on a national legal framework that allows for a degree of discretion that could be used in a manner which is not necessarily in line with the above-mentioned principles and objectives of the Community.

We, the Governing Council, have a position: we say clearly that - as you mention yourself - under the national legal framework there is a degree of discretion that could be used in a manner that is not necessarily in line with the above-mentioned principles and objectives.

Again, as regards the national law in question, we consider that it allows for a degree of discretion that could be used in a manner which is not in line with the principles to which we are attached.

No, it could be a signal that markets have to listen more to me than to others.

If there were only one or two I could specify those two countries.

It would be even much better if you could do it in a very effective and active way.

You could well imagine that you would separate the function of the central bank and that of the supervisory authority in a very appropriate fashion.

The countries that need to consolidate their public finances would have to do it anyway, and one could even argue that some forms of fiscal consolidation, some forms of structural reforms, would even be more difficult and more costly outside, but this has been a counterfactual.

In particular, we expressed our concerns that the envisaged reduction in the capital and restrictions on how profits are distributed and how provisions are made could have implications for the financial independence of the central bank, and also, more generally, on its institutional independence.

Lucas, could you elaborate on that?

So we are introducing all the elements that could play a role on the other side.

As regards recent messages, I would not quote any particular currency, if you permit me, but as you know, it was made very, very clear by both Wim Duisenberg here, and by colleagues in the United States that the communiqué which was sent from Dubai was clear, without mentioning any particular currency, that we thought that some Asian currencies could progressively, smoothly and orderly appreciate over time.

And that in itself subtracts, one could say, one impulse for the exchange rate movement we have witnessed in the last couple of months.

So, these could all, in a sense, undermine the success of this very modest recovery.

And then we asked ourselves: what is an unwanted tightening on the short money markets, which could then translate itself into a threat to the recovery?

I could not agree more.

If I could, I would not tell you.

Work is going on, and as I have said it is important, it could - if it 's well done - it could actually give more light and transparency on the nature of our discussions.

But the real answer is that it has not been found, but it could not have been used, because it was not final.

As for the second question, how could governments react to that, well, I would say:" Thank you very much and we will do our utmost ''.

That is the sort of advice one could give.

We expect, of course, in the medium and long run that, if we continue to be steady on structural reforms, we will observe -- progressively -- something of that sort, but so far, we do not consider it to be documented or substantiated and that we could retain it.

Gertrude, could you be more precise?

In the context of this favourable environment, orderly phenomena of the type I have mentioned could be observed in the period to come.

The conclusion that we could draw from the yield curve as it stands is much disputed.

It objected to extending ELA to non-viable banks and thus did not replace what could have been fiscal action.

A draft directive is now under discussion in the European Council and the European Parliament that specifies a pecking order of the categories of asset holders that could be bailed-in.

Let me answer to the first question, which really addresses both standard and non-standard measures that the ECB could take.

First of all, the Single Supervisory Mechanism -LRB- SSM -RRB- would not actually call for a mutualisation of losses, so it could actually speedily proceed.

So this could also go ahead speedily.

I would also add that the euro area national central banks could play a role.

We have tried to explain in advance to the public that it would not be our desire to put a stop to growth at the very moment it was beginning to pick up, but to make sure that this growth could remain non-inflationary and hence would have the best chance of lasting a long time.

As a matter of fact, the relevant committees will look in January and in the coming months when this could become a necessity.

What I said is that we have come to the conclusion that there is ample liquidity, I could add, very ample liquidity available in the euro area economy.

If we were able to quickly enforce the so badly needed structural changes, as I said, in labour markets, in goods markets, in all kinds of activity in the economic sphere, then we could come to a higher potential growth rate than we are actually seeing now.

So while we do n't have any indication that higher prices for some specific types of collateral are hampering the transmission of our monetary policy, we have nevertheless discussed what the ECB could do, and I just announced one of the things that will be detailed in the 3:30 p.m. announcement.

I could repeat the answer I gave to the previous question that, psychologically, the most difficult thing is not to resist pressure, but to take action when action is needed on the basis of your own assessment of the situation and developments, despite any pressure in whatever direction.

Now, you could do that.

In that case, there was a legitimate fear on behalf of especially the larger countries, that they could easily -- also on monetary policy -- be outvoted by a majority representing -- in aggregate terms -- less than 3-4% of the enlarged euro area GDP.

The two LTROs have avoided a disorderly deleveraging, which could have had even worse consequences for credit flows and caused further disruption in economic activity.

But, as you know, recapitalisation can be done in two ways: it could be done with public money, but it could also be with private money through the issuance of new stocks and shares, as is being observed at a global level.

And we would be more than happy if recapitalisation could be undertaken more actively in the euro area and in Europe in general.

As regards your first question there are several issues with and several angles from which you could look at unemployment, but just keep in mind that our mandate is not full employment, unlike the dual mandate of the Federal Reserve.

Legally speaking, if he wanted to he could continue of course.

I would not say anything here that would change expectations in the market that we could do something at the end of the first quarter.

We never said that everybody could expect an increase of rates every meeting, every two meetings or every three meetings.

If we look at a year and a half, it could be very serious.

The ECB view is that the mutualisation process should be sped up and the governance of this new institution should be effective so that the new institution, the resolution authority, could actually take the swift decisions that are in its very nature because, as we all know, to resolve a bank is a decision that is often taken in hours.

So the governance of this new institution should be such that it could decide in a matter of hours.

And on the backstop, we have always been very open: It could be a credit line from the ESM or it could be borrowing from the markets with joint government guarantees.

For example, the impact on the energy market, what could this be for Europe?

No, we have not discussed scenarios of different impacts that the crisis could have.

On the second point: well, you know it is always a matter of how you see the glass -- you asked me if I was disappointed by the credit developments: this is like the glass that could be seen as half empty or half full.

And third, international financial institutions like the IMF should, and could, create safety nets that could help some of these countries to cope with these spillovers.

And a third could be QE.

Several times when our rates were at 2%, we were repeatedly asked" Could you guarantee that there will not be any increases in your interest rates over a considerable period of time? ''

They could de-anchor themselves both upwards and downwards, but by and large, they have helped us to deliver, since the establishment of the ECB, our objective of an inflation rate that is below, but close to, 2%.

Obviously, we have facts and figures before us, and we have to understand better how to attribute what we are observing to the demand side and what we could attribute to the supply side.

And I can only tell you that we have judged that it was appropriate, taking all factors into account, to decrease the rate on the main refinancing operations by 25 basis points while, at the same time, we have not decided that this is the lowest point that could be attained.

I do not exclude that we could -- in a very measured way -- go down from the present level.

And as I have said, we are examining carefully all elements that would allow us to be convinced at the level of the Governing Council that we are optimising what could be done, and should be done, in our view, to enhance credit support and be sure that we have an optimised set of non-standard measures.

Generally speaking, we would hope that any wage settlement going in excess of the rate of productivity increase could be avoided.

As I have said, an LTRO is just one of them and when the time comes, we will decide what will be the best shape that it could have.

As regards the recapitalisation and elements that could permit the banks to reinforce their balance sheets, we are very clear on that.

It does not say anything about the current discussion of levels of exchange rates, which could, by definition, not be achieved per se in a regime of floating currencies.

This is a comment I could make in general, and the President has made it many times for the euro area in general.

But -LSB- 2 -RSB- the outlook could worsen.

Markets would be totally upside down if they could not rely on solid, steady central banks.

I could have mentioned other countries myself.

For instance, I could have mentioned Ireland, which is in the euro zone and is certainly a success story in terms of growth, in terms of GDP per capita and in terms of job creation, and again it is in the euro zone.

Outside Europe, I could have mentioned Australia, which is a country that has introduced a lot of structural reforms on the basis very largely of a political consensus, and also of a social consensus, and these reforms are paying off also very well.

I will not comment on that, I do not see how there could be a counterweight to the ECB.

If a jurisdiction, if a country, if a monetary area embarks on an asset quality review or stress test, or any examination of the state of health of a banking system, the result of which could be to identify capital shortfalls, it is absolutely essential that both markets and supervisors and governments know what is going to be done about these shortfalls.

And, incidentally, I think the outcome of this exercise has been quite satisfactory and could actually form a good example.

There is no way to define or discover, at least I could not do that, a split in thinking or differences of views which are of any significance.

What is absolutely clear is that, because we had this additional element coming from agro-food products, processed food and oil, we have a figure, which at the level of the euro area as a whole, could be from 0.2% to 0.3% over and above the previous hump.

But now the question is, and the question that we have to look into is whether there are other factors besides energy and food that could keep inflation low.

So it 's a very complex geopolitical picture which could evolve, and in a sense we 're only sure about one thing, that if it does evolve, the euro zone, the euro area and the European Union are going to be impacted more than other parts of the world.

It has been a crisis which has been the worst since the Second World War and could have been the worst since the First World War had we not ourselves and the other central banks -- we were on the front line - not decided to act in a very short span of time, and had governments not also decided to adopt very important measures.

We 'll have to see, basically, how the growth outlook and therefore how the change in the growth outlook could alter what is the convergence of our inflation rate to our objective.

Could I say the same?

I can only give general impressions of how we view the whole phenomenon, which, as I said, is an important structural, socio-political change, but also it could become an opportunity.

And we look -- and that 's also very important for us -- we look at second-round effects, namely whether low oil prices and low commodity prices do feed into other prices, and then that could generate exactly what we want to avoid, namely a spiralling downward phenomenon.

It 's quite clear that we see major movements in the marketplace, and what could be the source of these movements, the causes of these movements?

I could mention at least three G7 communiqués on that.

But what we are investigating is that there could be another related matter.

And that by itself could have, let 's say, financed the weakening of the euro or the strength of the dollar.

So, undermining the credibility of existing rules is never a good policy that could generate growth, or could actually be sort of a good justification for postponing structural reforms.

Some national central banks have working groups also, watching closely what could be the consequences, especially the central banks of the countries that are the main trading partners with Russia and Ukraine.

I could see that for myself only a few days ago: one of the member countries of the Eurosystem issued securities on a thirty-two-year basis -- more than thirty years -- at an extraordinarily low level of interest rates.

And if you want to know what it could be like, you only have to look at what existed before the euro was set up.

If the movement were to continue, there could be cause for concern.

We keep explaining that the nature of that problem is predominantly of a structural nature, the lacking flexibility of markets, both labour and product markets, and that if governments can do anything they could tackle and, to our mind, they should tackle that cause of the unemployment in the first place.

The weakening of the German economy which has been evident over the last quarter of 1998 could, of course, have an impact on its surrounding partners, including - as you asked so specifically - Eastern Europe.

We are looking very carefully at all the elements which could permit us to be enlightened on the supply and demand aspects of the credit provision and, taking into account the global decline of activity -- particularly in a number of cases the very sharp decline of global trade -- we trust that it is not surprising that demand is playing a very important role in the slowing down of credit that we are now seeing.

The results of those efforts to measure the degree of confidence are becoming ever more positive not only in the euro area, but even in some of the" out '' countries and I could think of no means with which we could publish more than we are already doing and with which we could give more speeches than we are already delivering.

The differences in prices that could arise from the transfers would have to be filled by the banking sector, not by the government.

Both they and the European -LSB- Commission 's -RSB- competition arm worked very well together and basically addressed a situation which could be potentially complex.

The market reaction both in Portugal and out of Portugal basically confirmed this view, this view that authorities have been swift and effective, and what could have been a systemic incident is actually now considered an incident, an episode which is restricted to this bank and to the owners of this bank.

And we certainly would not and could not recreate that sort of market, because it was considered -- some of these imperfections were actually considered one of the major roots or the major causes of the financial crisis.

And I felt that I could not breach that commitment, of which I informed the Presidency immediately after I became aware of the forthcoming ECOFIN meeting.

Well, if there is the perception in Denmark that there is an image problem for the euro and that this could have an impact on Danish opinion and on the ultimate outcome of the referendum, I would be happy to try to convince the Danish people that the outlook for the euro area is a very positive one.

That it is in the sense the" green light '': a" green light '' to undertake the necessary structural reforms that could enhance competitiveness, job creation and growth.

You could interpret that, not as a bias, but as a bias gradually creeping into our considerations.

It could also be that they are embarking less on issuing instruments like bonds and commercial papers and have less access to stock issuance, and prefer to draw from banking loans.

By the way, it would be highly welcome if this fiscal compact could be signed by the end of this month rather than waiting until March.

As for the second question, I do not really comment on Mr Bini Smaghi 's views and I really do not know what a tailor-made quantitative easing for the euro area could be.

After the end of last year, we could see that the hump had disappeared.

This change could then be enacted by a decision of the EU Council in the composition of the Heads of State or Government on a recommendation of the Governing Council of the ECB, which would, in that case, have to be made unanimously and after having consulted the European Commission and the European Parliament or on the recommendation of the European Commission after having consulted the European Central Bank and the European Parliament.

As regards the second question, could you, Christian, say something on this...?

On that basis, I am filled with a feeling of satisfaction in many areas, namely the smooth introduction of the euro, the rapid development of a single money market in the euro area, the rapid developments - which are still going on - in the capital markets in the euro area, and I could go on and on with phenomena like that.

Could you expand a little on your second question?

We proved that we were pragmatic -- nobody could have expected that our balance sheet would double since July 2007 -- and I exclude nothing ex ante.

We look at what we could do or should do, taking everything into account.

I am not saying that 2% was considered ex-ante by the Governing Council as a low level which could not be displaced.

There is an article in the Treaty -- Article 105.6 -- that says explicitly that, following agreement by the various executive branches, we could be given further responsibility.

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.

I did not inform you about interventions, although I could easily mention a figure, the figure is zero, but then we do not have an exchange rate policy, we have a policy aimed at achieving price stability and we do not have an explicit exchange rate policy or exchange rate aim vis-à-vis other major currencies.

So, I do not have any particular comment on what the United States could do, or could not do.

We never pre-commit in advance and I will not comment on what could happen in the months to come.

It could be improved more, and better harmonised.

It could also be improved at a global level, because we have still significant differences on a transatlantic basis and at a global level.

If I take the example of one particular country -- I could take many of them -- the case of France: since the euro was created, around two million jobs have been created in France during those eight years.

Who would have thought that I could stand here in front of you and tell you that over the past five years we have had the same level of medium and long-term market rates -- not to speak of the short-term rates -LRB- we are lower as regards the short-term rates -RRB- -- as the best and most credible currencies.

Now, focusing excessively on any particular purchase period, for example on 2017 only, could result and yield wrong interpretations.

And the market people -- the specialists observing what we were doing, looking at our website -- could see that there was no change.

By the way, incidentally the Ombudsman also acknowledges that there is no evidence that these meetings could have directly influenced or have had an adverse impact on the ECB 's supervisory tasks.

Excuse me, could you explain me what you meant?

But the first question is that based on data, on today 's data and today 's projection, I think I see very few chances at all that interest rates could be raised this year.

At this stage all I would say for the present year is that the average growth which is projected by the international institutions -- and I could take a number of them, including the OECD -- and by the private sector -- would be reasonably close to what our own staff published in the last projections.

If my memory serves me correctly, we could have a net tightening of 49% in the first quarter of this year instead of 41% in the last quarter of last year.

I could even say there are a number of indications which are really on the upside.

You could have asked a question on rumours about markets, exchange rates, etc. -- we never comment on rumours.

Because of our remarkable own credibility we could deliver this extraordinary low level of rates, which had been the privilege of only a part of Europe and not the privilege of 311 million people.

On our side of the Atlantic, it 's clear that structural reforms are absolutely of the essence and could contribute not only to being better off in Europe but also to a better situation at a global level.

You could go back to only one month ago when some of your colleagues would have questioned increasing rates at the moment where you see that euro area growth in the last quarter of 2005 was only 0.3%, which is much lower than the growth potential or trend rates.

Inside the euro area, or the de facto euro area, you have very good examples that could be benchmarked: you have Ireland, which has no mass unemployment.

It is one of these concepts on which, of course, you could see a lot of different analysis and a lot of different opinions.

The second question is, if I can rephrase," How can an expansionary monetary policy measure, or a set of measures like we 've decided today, how could that change a situation where debt, both public and private, is excessive? ''

We are in a situation where a number of facts, figures and data do not confirm that we could have stagnation or a double-dip recession.

I could mention other figures, but I do not want to overburden you.

It is something that we consider important and we do not want to enter into a debate on whether or not, given the increase that has been observed in the term money market rates or what has been observed on the exchange market, one could describe the monetary policy stance differently.

And I have already qualified what I could say on the dollar, on the yen and on the yuan, and I stick to what I have said.

You could also say there was a very strong message to all price-setters and social partners.

I accept fully that the interpretation could have been then that for Greek bonds in particular it would have a consequence.

Could you be more precise?

Within the Stability and Growth Pact, one could do things that are growth-friendly and also would contribute to budget consolidation, and I gave an example of a balanced budget tax cut.

Reducing taxes that are especially distortionary, where the short-term multipliers could be higher, and cutting expenditure in the most unproductive parts, so mostly, actually not mostly, entirely, current government expenditure.

And so we decided to go ahead, but certainly, some of these changes will be needed to rebuild a market which could be, especially in Europe, an important channel of credit intermediation.

I 'm saying especially in Europe, because of course we are completely focused on the bank lending channel, and this would on the one hand be sidelining the traditional credit channel, but on the other, it could go back to what it was before the crisis.

On the scale of the dissent, I could say that there was a comfortable majority in favour of doing the programme, and now on the content of the discussion, I 've given some hints before.

I could go on with the tendering procedure if you are interested.

In this sense, the ABS outright purchases could be viewed as a measure that strengthens the TLTRO.

Well, it 's a convention, a standard monetary policy decision, and one expects effects according to the usual line of thinking, but in this case it clearly signals to the banks that are going to participate in the TLTRO that they should not expect any further lowering in interest rate, so they should not hesitate to participate in the TLTRO because of this reason, because they could wait for a lower interest rate in the future.

That being said, I would say that we had a very important discussion, weighing up very carefully the pros and cons of the various positions that we could take, and ultimately came to the decision, -- by consensus -- that I have just explained.

As you say, there is a swap market that is functioning and there are a number of other observations that could lead us to decide that it is not necessarily worth continuing.

But, in this particular case, taking into account the fact that some tensions remain, as well as the fact that the opening up of the market in New York could be a little bit under strain owing to demands and requests coming from European banks, we think it is a right way to cooperate in the month of January.

The creation of the ECB and the euro gave a framework where all these countries could actually share sovereignty in crafting the monetary policy of the euro area.

I think one can construct many examples of why this sharing of sovereignty could improve the prospects.

We are unanimous in the intent, but when the time comes to decide exactly what measures we should undertake there could be differences of view.

I could mention house purchases, the financing of house purchases, in the same way: in April 8.6%, in February 9.4%.

And you could also see such sentiment expressed in a number of other central banks.

But, again, I do n't exclude that we could modify our assessment -- at this stage it would be premature.

As you noticed, everybody has been talking about what the ECB could or could not do, what would be nice for the ECB to do and so on, but the ECB did not say anything.

You deduce yourself what we will or could do.

With regard to your question on bond purchases, I do not know where that rumour could have arisen from.

The decision we took was to earmark these profits for distribution to the national central banks with a view to further redistributing them to their national governments, which could use them for Greece.

By the way, I said this to the Members of the European Parliament in Brussels two days ago, and I could see the extent to which, as representatives of the European people, they appreciate the fact that we delivered our primary mandate over the first twelve years.

And I could cite other big advanced economies that are in this category.

We had envisaged that we could return to tenders.

We appreciate enormously the cooperation which has been established very rapidly in the case of Greece and also of course in other areas with the Commissioner and I think it was very good that we could cooperate confidently on this very important issue.

I say that, but for me your question is interesting because I also have to say, as you could see today, that since the start of the recovery, which began in the third quarter of last year, we have been constantly surprised on the upside by what we have been observing.

And then we have medium - or long-term horizons where new changes in the economic and monetary union could be introduced, but they do require a more extensive change in our treaties, in our treaty foundations.

The only separation we had was between banks that could only do short term and banks that could only do long term.

The biggest advance that we made in the early 1990s was basically to tell banks that they could do both, so the issue was not even considered at that time.

And I could go on with other signs of monetary fragmentation as far as bank funding is concerned, as far as sovereign bond markets are concerned, and so on and so forth.

We can make a clear distinction between those economies which recognised that prices had changed -- and that had to be recognised and accepted -- and those who thought that they could protect their economies from the real transfer: the second had very poor results in comparison with the first.

But the same could be said about non-financial corporations.

On the second question, well, this answer could be very long.

In other jurisdictions we could sort of fear a backtracking to a world where there is less regulation.

Well, I could say even more about where the euro rate is today.

Once we had provided the first three-year LTRO, we also asked ourselves how we could make sure that this facility would reach not only the large banks, which usually have plenty of collateral and packaged in a way that corresponds to our eligibility criteria, but also the small and medium-sized banks that are most important for financing small and medium-sized enterprises -LRB- SMEs -RRB-.

The idea that the ECB could actually give money to the programme would violate the prohibition of monetary financing.

But admittedly, it is a very short time to judge someone, it could get much worse.

The banks will have to comply or explain and they can explain that they have done the utmost to comply and could not do it for understandable reasons.

You remember that, for all those operations, we had said that we could have either fixed rates or another way of dealing with it.

I do not exclude, taking into account all the new information that we have had, that we could have, on a quarter -- on-quarter basis, a return to positive growth before mid-2010.

If I could, I would.

So there is enough evidence to say that it could be effective.

That could actually be of great help for the implementation of the investment plan.

That is very important to keep in mind because it could alter the profile of inflation rates over the coming months, especially in the next few months.

Incidentally, there has been a rumour that the conditions of the second TLTRO could change.

As I said before, it could fall further because of oil prices.

All these decisions do have an effect, could have a credit-easing effect, or could have a signalling effect, or could have a portfolio rebalancing effect.

On the particular aspect of taking monetary policy decisions by a -- let me call it -- simple majority, which, in the future, could give rise to a situation where the monetary policy decision is taken by a group in the Governing Council, which, by the way, includes the Executive Board, which could be regarded as not representing the major part or the most important part of the European Union or the euro area.

Evidently we are convinced that a QE programme which could include sovereign bonds falls within our mandate, or better, is an eligible instrument that we could use in the pursuit of our mandate.

I think that those who were speaking of decoupling had in mind that you could have simultaneously in the world for instance a business cycle which would be very much on the downside in the United States and a business cycle which would continue to be on the upside in the emerging world, particularly in emerging Asia., But that in my opinion does n't mean decoupling because it 's clear that, all things being equal, if the US had not gone down quite strongly, then of course the emerging Asia would have gone up even more.

And we will see what happens and what we have today is that China, India and the Asian countries continue to have very significant dynamism, and the offsetting of the US slowdown could be partially or more than partially be done by Asia.

We could have new developments in this ongoing turbulent episode.

We could have bad or good surprises coming from the rest of the world.

And we are in a universe where it would be very naive to claim that you knew in advance everything that could happen.

So, again, you could see that the Governing Council is very firm on that and it calls for all countries to strictly implement the Stability and Growth Pact.

This could be a sign of either of the two factors.

On the first question, you are asking me: could there be an OMT without conditionality?

Monetary financing is when the central bank of a country prints money to buy the government bonds in the primary market of that country, and it could be either direct or indirect, when banks bring collateral to the ECB in order to be financed in order to buy the sovereign debt of that country, and we are prohibited from doing that.

But if we have a supplier-driven artificial scarcity, then it is very grave and it has an impact which could be very grave at the level of the global economy.

You could see the difference between those economies which considered that they could not do anything and those which considered that they could preserve price stability in the medium term.

No, I do n't think that this could be the case.

And the fact that I am able to say, on behalf of the Governing Council, that we could have the headline inflation in line with our definition of price stability next year is something which is very important, for the confidence of our fellow citizens.

I do not exclude that we could decrease rates again.

You could also have quoted Mr Johnson and the chief economist of the OECD.

There could not be any waiver or exception to that.

You remember, when we discussed the effects of lower oil prices a few months ago, we said they were a good thing, but also there was a potential negative side to that if these effects produced second round effects which could have a deflationary impact.

What I could say, however, is that the monetary policy measures that we decided in January, but also for the previous ones, to be fully effective, need first and foremost strong structural reforms.

First of all, once a country has a contract, then disbursements could take place, could be restored by the member states.

Then market access could be restored.

So, we could certainly improve in this respect in comparison with the United States, but it would be unfair to say that we have only defects on this side of the Atlantic and that there are only assets and qualities on the other side.

And then it could have an impact which would be negative in comparison with the present monetary and financial environment, which again, as far the financial environment is concerned, is exceptionally favourable to growth and to job creation.

At the end of the year inflation could very well be substantially over and above 2%, even without changing the present price of oil.

I already mentioned" one man, one vote '', I mentioned the degree of representativeness, I could also mention the fact that the proposal has to be transparent, to be easily understood.

To give you precise figures: for example in March we could see that outstanding loans to the financial corporate were still very dynamic, at 12.4%.

I could mention many colleagues, including the Governor of Bank of England, who have mentioned very explicitly that it was certainly an area where a lot of pertinent information could be obtained for central banks and for their decision-making processes.

And I could go through all countries and the comparisons would all be flattering for us.

Looking ahead, we feel that inflation rates could temporarily increase further and go over and above the 2% level before falling back to what we consider to be price stability towards the end of the year.

We knew at the time that it could n't continue on like that and now it has reduced.

We were n't happy when we were talking about an increase of 15% and, as I said, we knew that could not be sustained.

I could add a number of other elements that are very telling in terms of the performance that we have had and we trust profoundly were achieved thanks to our credibility in the delivery of price stability.

But I do not want to elaborate on the economic reasoning behind this, namely that if you have less debt then you are at an advantage because you have less service of the debt and more room for manoeuvre than other countries ; and why encourage a country to go on piling up debt until it reaches 60% when that particular country could be much better off with less debt?

If it were not the case, we could not work.

We said -- and I have said this repeatedly on behalf of the members of the Governing Council -- that we faced the worst crisis since World War II, and that it could have been the worst since World War I.

With regard to the first question ; as always we had a long discussion on the pros and cons of all the decisions that we could take.

On your first question: as you could see, we have two categories of monetary policy instruments at our disposal.

From the very beginning, we could see that it was going to be a major global crisis with a lot of structural changes.

I could have taken unemployment also, and you would be surprised to see that the unemployment level differences in the states in the United States are not that different from what we are also observing in Europe.

I could refer again to what I said in my first hearing in Parliament eight years ago, which was to warn against any weakening of the Stability and Growth Pact and to warn against any loose policies on the fiscal side.

We have to make the best out of this wealth of information, but it is clear that there are areas where we could have good surprises.

So we take all parameters into account, including, of course, what could come from commodities in general.

As you know, I read it and it will be available of course as part of our overall introductory remarks, but I could nevertheless read it again:" It is of vital importance to the credibility of the budgetary surveillance that the reliable compilation and timely reporting of government finance statistics is ensured.

The Bank of Greece provided all the figures which could be estimated on the basis of the information available.

We are also of the sentiment that further comprehensive labour market reforms could help considerably to improve job creation.

As far as we understand, it is the consequence of the decision of the banks themselves at the moment of the renewal of their previous financing to ask for less than they could have done.

And there are signals, at least in the demands, that the contracts could be excessive.

And there was strong urging from all sides in the Governing Council that we should see to it that - if we could not speak with one mouth, preferably with one mouth, we should at least let only one voice be heard.

So that could not be held against Sweden in any way.

And again I could quote a very large number of cases where I reiterated our fierce independence.

But I could give many other examples.

We decide on the basis of our own judgement, and I was extremely happy that Kanzlerin Merkel could confirm that she fully backed our independence and appreciated what we were doing.

You could do that.

We increased rates in December 2005, when 10 governments out of 12 were calling on us not to increase rates, and I could quote a number of similar circumstances.

We could also be -- I do not exclude that at all -- surprised by the dynamism of the domestic economy of the euro area.

If need be, we could certainly continue with such cooperation, but at the moment I have nothing else to say on that.

I could also say, ceterum censeo, carthaginem delendam esse.

And if we could benefit from the same gross labour productivity progress as is observed in the United States we would have a growth potential again more than 1% higher than the present one.

It would have been the biggest mistake we could have made.

It is a very professional exercise and I do not want to prejudge in any respect what could be produced.

This is one of the elements that could argue in favour of a change in the overall behaviour of some of the consumers.

I could also confirm to you that the Eurosystem has regular meetings with our Latin American friends --.

I always call for ideas, which could be interesting, that are submitted to the international community by different countries to be examined and studied very professionally, actively and rapidly, because the international community requires us to be reasonably expeditious.

And we could maintain or increase the non-standard measures while increasing or decreasing the interest rates.

I think that it is too early to draw definitive conclusions from this observation, which could also be made in respect of a very large area of markets, certainly treasuries, as you just said, but also, private paper, across the board.

On other countries and on Greece, you could see in the introductory remarks what the Governing Council had said.

But there was no way we could technically resolve the problem in its entirety, in other words avoid an increase in the interest rate, unless we had been active on a daily basis in the market by way of fine tuning operations.

You could also have mentioned, of course, a lot of information which were much more encouraging, including a number of surveys from all over Europe, not only this country in particular.

What you could look at is basically the past behaviour as an inference for the future behaviour of our purchases.

I have some jokes that I could make at this point in time, but I 'll just re-read the statement if you want, because that 's really what we can say today, and I 'd just rather avoid jokes on this.

This is much earlier than anybody could have expected until two or three months ago.

Actually, it is so important that an event like this could be one of the factors that are making the financial environment nowadays a little less tense than it was a month ago.

I here quoted Germany, but I could quote the Netherlands as offering an opposite example, over the last few years, where you had a period of great success as regards cost competitiveness, then buoyancy in the economy and then increasing unit labour costs that were eroding this very remarkable" over-competitiveness ''.

But there is a fourth reason, and that is that when we were discussing it a month ago, we could not say that we had the same picture for the whole of the euro area as we do today.

Deflation is a protracted and generalised drop in the price level, so protracted and so strong and so generalised that it could disanchor inflationary expectations.

On the first question, generally speaking, the idea that the ECB could channel funds via the bank lending channel to a specific category of firms or households is as wrong as the idea that the ECB should make sure banks do n't buy government bonds as otherwise it is monetary financing.

On the first question, one could ask this question every time we change interest rates: what is the situation?

And that has a lot to do with the weakening of the general economy, but also with the behaviour of oil prices, as we have to bear in mind, of course, that they could go either way.

At today 's meeting, we had an ample discussion on the various non-standard measures that could be utilised to repair the monetary policy transmission channels.

And the sentence and the wording here could be, actually says many things.

The consensus means the following, means that everybody could either agree or not object.

Could you repeat your last question?

Could you remind me of the first one?

The default or selective default could be a consequence of some of the actions and then we would say:" No, it is not what we would consider appropriate in the circumstances ''.

And taking into account the fact that there are big advantages in having a large set of private authorities, private institutions and private participants in global finance that could challenge their views and not exert an overwhelming influence, but all that being said, I would say, it 's work in progress and it would be a little bit naïve to think that we have a clear cut solution and the solution is easy to apply.

Next time, could we agree that we all concentrate on the first part, on our monetary policy which is much more, I would say, important than some of you suspect.

So in what regards the waiver, the main condition is that the Governing Council will be satisfied that the country under a programme is complying with the programme, and that could even happen before the conclusion of the review, if we would be close enough to that end of the review and we would be convinced that the review would become successful.

What we 've done since then is to create very favourable financial and credit market conditions so that firms and households, even though burdened by these external factors, could find credit easier to access and more abundant.

I have no comment on what could be done in the case you mention since it is the responsibility of the executive branches to reflect on this particular question.

And as I said, we could go up or we could go down.

And then you could all see market expectations sharply changing, as this is normal on the basis of the information given by the Governing Council of the ECB.

There are reasons to think that this is the sign that private consumption could in the future be more robust than we observed in the second and third quarters of last year.

We must have a referee which will be totally reliable and which could say" These are the figures ''.

And you have a number of other improvements that could certainly be made and that would be welcome.

When I hear that the level of interest rates could be an incentive or a disincentive for countries governments to change their labour markets, I ask myself, should n't the unemployment level be an incentive to change the labour market, especially since these levels are not the output, or not only the output of the financial crisis.

From one perspective, the answer is yes, because the ESM could recapitalise banks without the debt of the country increasing.

Let me now address the first part of the question about whether we can see an impact coming from higher nominal wage growth that could compensate trade.

But, we were not in an identical situation in terms of the technological drive and the associated productivity progress that could be observed.

As regards the staff projections the figures are the figures, and we have in front of us the figures that are the projections of our Eurosystem staff -- not only the ECB staff but the whole of the Eurosystem staff -- and they are, as I said, quite in line with the most recent other projections that I could see.

It was very brief, because it 's very, very early to say what the impact could be on the eurozone 's economy.

We look at other projections and we could observe that the most recent surveys of other institutions, including the OECD, are very close to what our staff are saying.

It could actually be closer than we all expected until, I would say months ago.

I think one response is that some things concerning this financial market union could actually be achieved in a relatively rapid way.

On the first question, I could say that today we are ready with our OMTs.

Having said that, very much in the spirit of our forward guidance, it 's there and it 's potentially an instrument that could be used if the economic situation will warrant that.

You could see credit flows going down well before the end of the year.

But in a different way the euro, I was saying before, has been the cornerstone, the pillar upon which the single market could survive and could prosper and could increase prosperity of the member countries.

That was of course because of the direct benefits that such membership could bring, but also because of a sense of solidarity that such a membership would entail.

So my understanding of this is that whatever arrangement could be found, it is not clear yet which specific area would be addressed by this arrangement.

But whatever arrangement could be found is going to be an open arrangement ; namely ready to welcome any other country that would like to join.

We asked ourselves, what could be the reasons, the causes for these interest rate movements?

However, if I already knew the forecasts now, I could just as well publish them now.

If there is anything we could do to continue to reinforce our cooperation, we will certainly do it and we are in permanent contact with Masaaki Shirakawa.

You asked: what could a rate cut do in the current circumstances?

Of course, that is an influence with which we have to cope, but - as I indicated in my introduction - we have the feeling that we are rapidly getting into step with the US economy and that could, and it even should, lead to a - let me call it - more balanced development of the exchange rate as well.

We are monitoring the situation very closely and we are developing tools that could be used in due course, if necessary.

If you listen carefully to or read the statement I made last Monday, the statements the Vice-President and some of my colleagues made in the weeks before that, even the statement we delivered together a month ago, then there were many signs that you could expect something.

We have studied a number of tools that could permit us to rule out any excessive developments in the same direction.

But, of course, as I indicated in my introductory remarks, in our decision today, we carefully looked at the recent developments in the exchange rate as one of the main indicators which could have a lasting effect on future price developments and which we wanted to counteract.

In the contribution from the Europeans you have to take into account the fact that we have two bodies, the EFSF and the EFSM, which, as has been the case before, could each contribute one third, so the two thirds would be shared between the EFSF and the EFSM.

You refer to modest and moderate growth in the second half of the year, but could you give us a figure?

It could make both their and our lives more difficult in the future.

Could you repeat that question, please?

So there is nothing new or special that I could mention in this respect.

To this extent, the Governing Council has tasked the relevant committees to work on different monetary policy instruments that could potentially be used, to examine the pros and cons of different instruments.

And that could be said in different words.

Well, let me state quite clearly that the credibility of a central bank is measured by its ability to comply with its mandate and to this extent any instrument could be potentially used.

We have a number of sectors in which we could have abnormal price setting -- and particularly those sectors where you do not have the level of competition that would permit the avoidance of such behaviour.

So the conclusion of this reasoning is that we are monitoring these developments very closely, and we stand ready to act if we were to detect the signals that there could be second-round effects at play here.

It is really pointless to think that sovereign bond rates could be stably brought down for a protracted period of time by external interventions.

That could bring us back to an earlier question.

Regarding the level of reserves, we have recommended to the EU Council, for the time being, to double the amount of reserves, but leaving the question open whether in the future so-called" further - further - calls '' of reserves could be made.

But the way to react to this is not to count on external help that could alleviate the temporary market pressures, instead the real answer is actually to count on the countries ' capacity to reform themselves with the right economic policies -- and I listed them before, in response to a previous question.

And we also think, again, provisionally, that taking into account the cycle and the structural aspects of the situation could be, in the preventive arm, an important improvement as regards the implementation of the Stability and Growth Pact.

Banks would and could be resolved in a uniform way in the euro area -- or potentially and preferably in the European Union.

We take it that improvements in the implementation of the Stability and Growth Pact could be made.

And on a number of points we feel that some improvements could really be effective: in particular, as regards the" preventive arm '' of the Pact, where we think that we could strengthen the incentives for compliance" in good times ''.

We also think that the timetable for the monitoring process, again in the" preventive arm '', could be improved so that stability and convergence programmes and their assessment would better guide domestic budgetary processes.

One could say that what happened in 1999 was also a number of investments from the euro area to outside the euro area.

When we thought about creating the euro, nobody could have imagined that 311 million people in the euro area would have had access to such low 10-year market rates.

The pros and cons of a rate cut could have been envisaged by some, yes.

On the first question, I have already responded several times, so again: everybody knows that we could move rates at any time.

The reason we have such low rates is in particular because we are credible, as far as price stability is concerned, over the next ten years ; and I could say also over the next 30 years, or even the next 50 years !

As regards Mr Fazio, I will only mention that we have taken a decision regarding the draft legislation and I could comment on that if I have a question on the draft legislation.

And I would say that in some cases yes, it could be good to have nominal wages and salaries moving more slowly than the labour productivity increases.

The implication of that definition is that we have to explain why there could be external shocks which temporarily bring the actual rate of inflation to above this figure, which can at times happen and which we have always foreseen could happen.

One can always say" well, you could use another methodology ''.

But that could be qualified as a structural factor in as far as the crisis would have lasting effects.

So observers, market participants and economists could see that because of these successive shocks, we could have inflation over and above 2%, but nevertheless they had and they have full confidence in our capacity to deliver, in the medium run, price stability.

On the first point I would say that we do not think at this stage that these events could have any significant impact.

Things could be different tomorrow.

In the precise wording of the Finance Ministers ' decision, if you refer to Italy, it contains the explicit warning that reaching the objective of 1% of GDP in 2001 could require additional corrective measures on a larger scale than envisaged.

-LRB- Laughing -RRB- I could have helped you slightly on the first question.

Fourth, in a period when we have to remain as credible, well-anchored and as regards the financial environment, as favourable to growth and to job creation as required, it is clear that creating an inflationary shock could trigger an accelerated inflation phenomenon, which would be very dangerous.

You must bear in mind that there are two differences between the situation, let us say, in the United States - I am just taking this as an example, and could be any other large economy - and in Europe.

So, they could increase their liquidity value on any given day by a very high factor.

I could also say that there was unanimity for the monetary policy stance.

On potential growth, if I remember what I said and was reported correctly, I did not say that the potential growth was higher, but that it could be higher and could become higher than the trend rate of growth which we observe, which we put at the figure of 2% to 2 1/2% for the euro area as a whole.

If indeed the structural reforms in the labour market, in the good markets, were finally to be implemented throughout the euro area, then we could have a potential growth rate, or a growth rate, that is significantly higher than that currently perceived.

With regard to the appropriateness of the monetary policy stance, we were not so sure in December whether we could use the word.

Well, again, I will not enter into that debate, knowing that the debate is raging throughout the United Kingdom and the best thing I could do to prevent Britain from joining is to speak out about it.

So yes, we are constantly reflecting on what could be done, but I have no decision to announce to you right now.

The reason this argument is raised is the fear that the exchange rate could actually be affected by these monetary policies.

So it is not correct to say that the collateral rules could not be looser.

When we address the global economy, we do, of course, incorporate the biggest economy in the world, and I do not think there is any message that we wanted to convey to qualify differently what could happen in the United States of America.

I could repeat it, but I can not say different things.

On the lending side, progress is more muted, but here I would point out something that could be a source of comfort.

When you consider all this, you look at what assets could be purchased and then you look at what sort of financial infrastructure the Europeans have.

However, now that there is more time, there could be a shift towards reducing current government expenditure and lowering taxes.

You could see precisely this progressive phasing-out taking place over the last few days.

We do n't know where the next crisis will come from, but at least we ought to be reasonably confident that we 've done everything we could to make our financial services industry more robust, stronger and more resilient.

We see selected local situations where one could actually think that price movements are wide.

Why has n't the euro area, or more generally, Europe, been able to come up with a situation which could be considered as, I would say as normal, in this situation, as an ordinary situation?

Things that are unsustainable in a certain situation, because the policies that are being undertaken are wrong, could become sustainable.

We could easily converge on a set of decisions that, as I said, had unanimity.

And economies that are not viable under a certain set of policies could become viable under a different set.

{'depend (251)', 'anticipate (153)'}

First question -- we will see what will be in our next projections, and I do not want to anticipate in any respect the next projections -- they depend on a number of parameters and on the work that will be done by our staff.

As regards what will be said at the next meeting of the Eurogroup, I do not want to anticipate ; it is a meeting of the Eurogroup and it will depend very much on what will be said by the various delegations -- not by only one, but by the various delegations that will present their own situations and intentions.

{'depend (251)', 'believe (492)'}

As regards labour productivity, we believe that the labour productivity increases that we are aiming for depend on the dynamism of the private sector and on a number of phenomena that are very complex.

{'depend (251)', 'cautious (120)'}

What we have observed, if I take private consumption growth in the euro area, and -- again -- depending on a very cautious checking of the figures, is that we had quite robust growth of private consumption at the very beginning of last year.

{'depend (251)', 'conditional (51)'}

And I fully confirm we are conditional, we are depending on data, deep analysis and judgement.

{'depend (251)', 'confusion (26)'}

The market behaviour with respect to banks depends on the confusion that was originated by the account of what this questionnaire was and what 's going to happen, and of course all the discussions about the bad bank, and different valuations -- you know about that as well, of course.

{'depend (251)', 'could (2094)', 'risk (3278)'}

There could be good securitisation, depending on what people trade, how much risk they retain and so on, and that 's what we and the Bank of England are aiming at, rebuilding this market, but for doing that, we need not only the presence of the central banks, but also the regulatory changes that would be justified.

{'depend (251)', 'could (2094)'}

We could raise or lower rates, depending on this very comprehensive analysis.

So in normal times the order of magnitude of our outstanding refinancing operations, and of course, it is only an order of magnitude, because it depends very much on the analysis of the liquidity need, it could be something like $ 400 billion.

So the transmission channels could be several, depending also on the sort of QE we design, and keeping in mind that we have already decided important measures, like the ABS programme and the covered bonds programme, that are and will be especially producing effects over an extended period of time.

Therefore, as regards the duration of these covered bonds, I will stick to what I said earlier, it will depend very much on a case-by-case basis what is the appropriate duration of these covered bonds, but it could go from three years to ten years.

{'depend (251)', 'likelihood (25)'}

Because that depends not only on the likelihood that it will be under 2% but also to what extent it will be under 2%.

{'depend (251)', 'may (1031)'}

Third, I would not make too much of the recent increase in the EONIA because it may be due to a variety of factors, some of which are structural, depending on which banks have repaid the LTRO.

{'depend (251)', 'might (766)'}

One of the reasons which might depend more on us is that consumers in Europe feel that their purchasing power is hampered, because they have a perceived inflation higher than real inflation.

Depending on the period under consideration, the proportion might be the following: in more than 75% of cases there was no such interruption of the normal relationship and only in less than 25% of cases there was.

And when you compute the full addition for the euro area as a whole, you get figures that might be very different, depending on whether you do or do not take into account the cases where the credible securities have seen their value increase.

When you compute the potential losses or potential profits that might be registered by the various banks, depending on the various securities they have, you arrive at figures that might be very different.

{'depend (251)', 'perhaps (538)', 'cautious (120)'}

I must be very cautious because these decisions have to be taken by the appropriate bodies, including the IMF, but, as far as I understand, what is perhaps envisaged, depending on the decision of each particular institution, would be a contribution from the IMF of one third and a contribution from the Europeans of two thirds.

{'depend (251)', 'probability (40)'}

As regards the profile, we are in the domain of probability, because it depends on a number of parameters that we, of course, do n't have control of, namely the price of oil and of other commodities.

{'depend (251)', 'risk (3278)'}

If the balance of risks changes, we can change -- depending on the decision of the Governing Council -- our own monetary policy stance.

Because global prosperity depends very much on the absence of protectionism and the least that I can say is that we are looking here and there and we see some emergence of this risk, which is extremely unfortunate.

Then you have all the spreads corresponding to the risk assessment depending on the quality of the various signatures.

This, of course, depends on our judgement of the balance of risks to price stability, as well as the evolution of the situation that influences the balance of risks to price stability.

So our projection of an expected recovery depends on both external and domestic factors, but at the same time, as I acknowledged earlier, there are downside risks and some of the downside risks are related to the strength and the pace of the global recovery.

The third is risk aversion, and to the extent that the risk aversion depends on the perception that the counterparty does n't have funding, we have taken care of that.

As regards the yield curve, of course, market interest rates depend on the global appreciation of risks and also on the global supply and demand of capital, which influences real interest rates.

On the capital relief, it very much will depend on the regulatory treatment and also on the risk retention, because we certainly want the intermediaries to retain some risk, because we learned painfully, I would say, from the crisis, how, all in all inadvisable it is not to have any risk retention by the intermediaries.

So in this sense the risks that we want to react to now do depend on factors that are not exogenous to the euro area economy.

{'depend (251)', 'unusually (19)'}

The first point is that it 's now clearer than it was before that the moderation in growth -- and here I am addressing your first question -- depends essentially on the pullback from the unusually strong growth rates that we 've seen in the first -- the last three-quarters last year, which were caused by -- predominantly by an unusually strong export performance.

{'depend (251)', 'variable (72)'}

It does depend on many other variables, one of which is the state of the economy, and of course for us what matters is price stability, because we have this in our mandate.

{'depend (251)', 'volatility (407)'}

Second, we now have confirmation that the HICP is edging down, to well below 2%, although with some volatility and certainly depending on energy prices and exchange rate developments.

{'depend (251)'}

We are also very much depending on the global evolution.

However, we know that in the present situation this confidence-enhancing effect depends on at least two factors: first it requires that national economic policies be geared towards fiscal stability ; and, second, it is linked to the progress made on designing the new European fiscal rules, fiscal set-up or fiscal compact.

Our decision certainly does not depend mechanistically on any particular input, including the input from the projections, which are an important piece of information for us.

We do not depend on any single piece of information or any single model of the economy.

It 's point-in-time, it 's dynamic, it depends on the underlying issuer of this collateral ; what is the credit-worthiness of the underlying issuer.

As you know, headline inflation depends arithmetically very much on shocks, in particular to the evolution of oil prices.

It depends on developments in financial markets, etc..

And, as you know, when we extract the inflationary expectations from index bonds, we see -- depending on our analysis -- that we are at levels which call for vigilance even if they allow very low long-term rates.

So it depends.

It takes time for the full effects to materialise and the amount of time it takes depends on many factors, in particular two.

But this depends on us and depends on the fact that everybody recognises that we will do what is necessary to deliver price stability.

As I said, interest rates are low, and when people borrow, it depends on the country: some are borrowing on a short-term basis, others on a medium-term basis or a long-term basis.

It is extremely important because we are all intimately intertwined and because the long and medium-term interest rate markets crucially depend on the level of inflation expectations.

And that is the reason why we call on both the sovereign and the banks to take all appropriate measures to consolidate, preserve and, where necessary, improve significantly their own credibility, because everything depends on the confidence that market investors and savers have in the sovereign and in the banks themselves.

In our case, all these effects go through the banks, so the final effect on the real economy depends, of course, on the demand for loans, but also on the state of health of the banking system.

This is something I have discussed several times when we say that low inflation rates do depend on global factors: they do depend on supply factors and relative price adjustments, but they also depend on a weakness of demand, where the existence of a wide output gap certainly plays a role.

Part of the confidence that we have to recreate depends on the sentiment that, in the medium to long term we will come back to a sustainable pace of policies.

The question was namely: does the regime, as set up by the European Regulation of 1999, apply to the ECB, or does that regime apply only to the European institutions and bodies that depend on the budget of the Community?

As you know, the ECB does not depend on the budget of the Community.

As a matter of fact, debt -- debt to GDP or debt to value added or debt to assets depending on the measure - actually continues to decrease with different intensity depending on the measure.

So they do depend ultimately on the economic policies.

It depends so much on the oil price itself and what is likely or unlikely to happen and I do n't want to make any projections.

The length of this period of time depends on our medium-term outlook for inflation.

Now, using our internal analysis, our internal models, we have asked the question whether this new measure, depending on its take-up, will have an impact on the inflation rate and the growth rate of the euro area.

Of course, depending on the take-up, it will be very helpful in taking the inflation rate back to below but close to 2% over the horizon that we have discussed on other occasions.

So to some extent, the size of the market is endogenous, and it depends very much on certain conditions, one of which is regulation.

And third, and more directly related to your question, is that the extent to which an expansionary fiscal policy can influence, can have positive effects on growth, depends a lot on the overall fiscal position of a country, as well as on the extent to which it can strengthen consumer and investor confidence.

On your first question regarding the effects of the interest rates on money demand: the situation, really, has not changed in any fundamental way because the demand for broad money depends on the whole spectrum of interest rates.

However, the final assessment depends very much on how it is financed and on this I do not have, at present, detailed information in order to be able to give you a precise judgement.

So the short answer is: it depends.

I said, more precisely, that the outcome will depend on the modalities of the financing and whether it will impinge on public finances in countries that are at present facing fiscal problems.

I have already told you that, at the end of the year, depending, of course, on ultimate adjustments, we will post average inflation over the first 12 years of the euro at a level which will be below, but close to, 2 per cent, i.e. exactly in line with the definition of price stability we gave twelve years ago.

As always, we decide depending on the analysis that we are making on the basis of facts, data, all information available and the judgement, experience and collegial wisdom of the Governing Council.

To start with your second question I think it depends also very much on you as well and how you communicate our message.

What happens in between, in a sense, depends on the main actors involved in this process.

But also, whether it will have economic consequences will depend on the shape of the outcome and the length of time it will take.

That depends on our strategy and on our mandate, on what monetary policy can do.

The length of the medium term depends on the nature of the shock and on the size of the shock.

And again, we will what will be necessary in the future depending on the data, facts and figures.

As I said, we are very pragmatic, we depend on the information that we receive and we will examine all new information as it comes in each month or each quarter.

In other words, it depends very much on which rates you compare the current ones with.

And this outlook depends on economic activity and on money and credit developments.

Second, loan demand depends on many factors other than monetary policy, and we 'll have to see what is the current economic situation concerning these two countries.

We base our estimates on a variety of indicators, so in this sense we avoid the trap of being linked to a precise number which depends on a variety of factors, and we use a fairly wide range of indicators to inspire and inform our policy-making.

For example, banks ' needs for government guarantees depend on the time profile of the maturity of their debt and they also reflect the relatively subdued demand for bank loans of the private sector.

Further decisions will depend on facts, figures and judgement of the Governing Council.

That depends on the global amount we want to provide.

They are very much deciding after reading your excellent articles, because they depend very much on the information they have and the overall environment including, of course, your own communication.

On top of that, there are other conditions for growth and job creation and that do not depend on us.

On the second point, short-term money market rates depend on a variety of factors.

On the first point: we have several instruments that we can use and our choice will depend on what actually happens.

We, of course, remain pragmatic -- we depend on facts and figures that we examine very carefully, as always.

Our credibility depends on everyone knowing that we do not hesitate to act when necessary, and we have demonstrated that recently.

A bank lending survey, amongst other things, assesses how credit standards change in time depending on different sorts of factors.

Now, we have got to be aware that excess liquidity depends on two factors.

It depends on the context ; it depends on the degree of fragmentation that we have.

The ECB 's Monthly Bulletin speaks of a figure between $ 200 billion and $ 100 billion, but in general the threshold depends on the state of fragmentation.

It really depends on who is repaying the LTRO, what is the state of their funding conditions, what is the state of their profitability, what is their general situation.

As far as the size is concerned, it really depends on whether the countries have fiscal space or not, and we always stress the fact that fiscal policy should respect the Stability and Growth Pact.

As you know, the amounts of purchases and the maturities of purchases do depend on the current constellation of rates, and as this changes so it changes the necessity to buy certain maturities rather than others.

Well, the word has several meanings depending on who is using it, but the natural way to look at a word like that is to have a policy whereby purchases would gradually go to zero.

But it depends on so many things.

It depends on alternative sources of energy, it depends on how this crisis will evolve, and frankly, as I have said, we poor central bankers do not have enough information to give a reliable assessment of the economic impact at such an early stage in the crisis.

Whether the bad bank is the right instrument or not really depends on the specific circumstances.

Now, the lag of two years is actually questionable, because unfortunately the lag depends on how well the transmission channels of our monetary policy work.

It is more and more clear that the situation of the emerging countries depends, to a great extent, on the economic policies that have not been undertaken, or that have been undertaken in a wrong way, in the most vulnerable of these emerging market economies.

That, of course, depends on the price of oil, but I hope that the price of oil will not go up again.

The excess liquidity depends on several factors, one of which is the state of fragmentation.

The stakes are enormous and inflation at a global level -- not only at the level of the euro area -- as well as the stability and prosperity of the global economy depend very much on these prices being appropriate.

Our decision will - as always - be taken by the Governing Council and will depend on any new information and data we receive.

We should be aware that the effects of QE are different depending on the initial conditions.

Because depending on its composition, each injection of liquidity will have a different effect, as we 've seen in other experiments, and it does matter.

But what one can tell, is that it depends very much what is going to be the impact of the price of energy, the price of gas especially, and its implications on gas supplies to Europe for the coming year.

I said that the ABS final action will depend on the action of many other actors.

You 're right in saying that the weak GDP figure depends also on technical factors, like the lower number of working days in the period that 's being observed.

And this depends on factors that were, in a sense, in the baseline, like a slowing net trade surplus, but also depends on factors like there has been a decline in short-term capital inflows.

It depends very much on what we define by QE.

The decision on when to do so depended very much on market conditions and on technical and tactical considerations.

We remain permanently alert because all depends on our own credibility and on the solid anchoring of inflationary expectations, because the price-setters today take into account what they expect to be inflation in the medium run after this hump has progressively disappeared.

I said that the next important meeting would, in my opinion, be in March, even if we are not pre-committed -- I insist on that because it is our own fundamental framework -- but we will see what we have to do: it will depend entirely on the needle in our compass: delivering price stability in the medium term, in line with our definition:" below 2%, but close to 2% ''.

In fact, flows at the present time matter a lot also because of the sequence that we have in our monetary policy decision that it 's cast in stone whereby the interest rate path depends on the dates of the net asset purchases programme.

Of course, headline inflation depends enormously on oil and commodity prices.

You know that they always depend on facts and figures.

And then the extent to which there would be a specific impact in a given country depends on a variety of other factors that influence economic activity in that country as well.

This will depend very much on the conditions of the labour market.

Also it depends on what sort of bargaining strategies the social partners have.

But of late, the forecast errors still depend on food and energy errors, but also depend on other factors.

And everything depends very much on what we call the second-round effects.

It depends, if you make a loss on the sales that is monetary financing.

It all depends on the governments being ahead of the curve, full stop.

There are various figures depending on certain methodologies.

As you know, being credible depends on our own action to preserve inflation in line with our definition of price stability.

Second, much of the food that is consumed in the euro area is produced by the euro area and therefore food prices depend very much on agricultural prices.

So we ca n't say much about the future of Euribor because that depends very much on the administrator of Euribor and on the regulators ; namely ESMA and FSMA.

There are big differences from month to month because it depends on the dates of when the bonds reach maturity.

When we define a medium-term concept it 's not a fixed time frame ; it really depends on how we are approaching to the achievement of our objective of price stability.

However, the responsibility for the implementation of these recommendations will rest either with national authorities -- supervisory or economic -- or, depending on the recommendation, with the European Commission or the European Supervisory Authorities.

As regards your second question on the projections, we will publish our staff projections and discuss the projections in general at our next decision-making meeting in Brussels, and all what I would confirm is that the main difference that can be seen in all the various projections at the moment -- I am talking about all the projections ; we do not stick exclusively to our staff projections ourselves -- both in the private and public sector - is that the projections, as far as real economic growth is concerned, are more and more going down, depending on the vintage.

There we had to see how to organise -- or not -- the rescheduling of their debt, because they had defaulted depending on the qualification of the conditionality that they were embarking on with the help of the IMF.

It depends very much on how our assessment will go.

That depends on the circumstances in the future, but it is true that you have never heard me say that before.

We judge the success of a programme, and especially this programme, depending on the contribution that it 's giving to overcoming the impairment of some credit markets.

It is clear that all elements that we have in mind are confirming that the downside evolution of the real economy in the US is likely even if we have to be totally pragmatic and depending on facts and figurs.

On the first question: we look at price stability and we will decide on our strategy and the timing of our exit depending on how we see price stability over the medium term.

Again, it depends on your perspective, because if you compare the current speed of reform with the speed of reform in those countries in the previous five years, then you are bound to say that it is very fast.

On top of that, I draw your attention to the cost of refinancing, which depends on the credibility of the strategy.

So if the refinancing of the treasury depends on much higher interest rates then you are hampering most of the private signatures and private entities in the same country.

We are concentrating on what depends on us.

The second-round effects depend on us.

Why this should depend on OMTs is a mystery to me.

I would say that it depends on our capacity to improve the confidence of households and of enterprises, at the euro area level, but also at the European Union level and at the global level.

It 's an order of magnitude, I say that with great caution, which means that there is an impact, but that impact is not necessarily too large, depending on what happens in the United States.

Future decisions will depend on our own judgment based on facts, figures and data.

At least, if it depends on us, we will do everything necessary to ensure price stability.

Now you asked the question to what extent our decisions depend on what happens in the Eurogroup.

What we are very proud of is that -- that depends on us - solidly anchor had been at our level and therefore authorises a lower level of market interest rates.

Naturally, it depends enormously, on the prices of energy and commodities.

It depends on what we do.

Everything depends on the capacity of all countries concerned to be" ahead of the curve ''.

I would only add that the future growth depends on us.

The future course of the economy depends on the rapidity of the implementation of decisions already taken.

And again, I reiterate the fact that the final result depends on us.

They depend on our capacity to increase confidence.

I do not want to elaborate too much on that again, because we still have the same position and because I have reiterated on behalf of the Governing Council that very same position, namely that we are on board for improvement and implementation as regards, in particular, the preventive arm of the Pact, depending, of course, on careful examination of the very precise orientations that would be retained by the Council of Ministers of Finance, which is the responsible body.

Now, we will do what is necessary, depending on facts and figures and new events.

I have always myself said that we depend on the confirmation of our baseline scenario, on facts and figures.

We will do all what we judge appropriate, depending again on the wealth of information that we have, coming from our own analysis and the very impressive wealth of information and analysis from public and private institutions.

As I said, we depend permanently on new information.

And unfortunately the answer is that this very much depends on demand for credit.

It depends on the wisdom of those who have important decisions to take.

Regarding the participation in QE, it 's more complex and it does not depend only on the successful completion of the review.

More generally, though, we have always considered it, important that once a decision is taken -- and it can be a very solemn decision, taken by either a government or by a parliament, depending on the various institutional frameworks in place in each of our democracies -- then, there are a number of decisions to be executed, some of them very rapidly and on the basis of some kind of executive procedure, and in an effective and efficient manner.

I said already that it will depend very much on the observations of the first quarter of this year.

We have full respect for the difficulty involved in taking the decisions, whether these decisions are taken by governments or by parliaments, as well as full respect for the challenges posed by these times and for the fact that our fellow citizens are the masters -- at the end of the day, as a fiercely independent institution, we depend on the sentiment of 332 million fellow citizens, as does any independent entity in democracies.

We view the current developments, the current and recent developments of the exchange rate, as the outcome of different monetary policy cycles in different jurisdictions, and the monetary policy cycles in turn depend on the different business cycles in the different jurisdictions.

It 's entirely depending on the conditions that will be in place, that are in place, and clearly, the answer to all these questions about ELA and further prosecution of ELA is entirely in the hands of the Greek government and the negotiations that are taking place between the Greek government and euro area members.

Most of the movement in TARGET2 liabilities depends on our own asset purchase programme and depends on how and where -- especially where -- the balances of the purchases of bonds are settled.

In this sense you see that the accounting and settlement of the balances do depend on where the settlement is made.

That depends on how long it lasts.

The number of staff will depend on the actual structure and therefore can not be defined properly yet.

I will not, because it depends on a number of parameters, give you any figures now, but it will go higher -- that is absolutely clear -- in the months to come.

Second, there is an institution that is entitled to decide on such matters, and the relevant institution in this matter is Eurostat, which depends on the European Commission.

Second -- again it is a question which has to be checked, examined in detail and decided upon by Eurostat, which depends on the Commission itself.

It is a kind of equilibrium which depends on what the banks themselves are asking for, and you can see that it goes up and down from time to time, very much depending on the demand from the banks themselves.

It depends on the people.

We have this in mind because 80% of euro area employment depends on the SMEs.

Again, all depends on the situation we see on our own market and whether or not we judge that it is appropriate to continue to help restore the more appropriate functioning of our monetary policy transmission channel.

Year after year, depending on the various countries involved, we are gaining several -- more or fewer -- months of life expectancy.

The lessons that one draws from the crisis depend on what one views as the main factors, the main reasons for a crisis.

What we would consider before the end of the year would depend on the new data that will become available before the end of the year.

Well, on the first question, the rates will be changed depending on what is the state of the convergence process.

And, it also depends on the overall environment and this is a consideration which is also of extreme importance.

First of all, I would say that it depends very much on the country itself.

{'dependence (6)'}

Some banks have made steady progress in reducing their dependence on wholesale funding under the Eurosystem.

But they do not - given the much smaller energy dependence of the euro area economy compared with 20 or 30 years ago - have the impact that would make us change the assessment that we are experiencing, and we are looking forward to experiencing, a period of robust economic growth.

{'dependency (5)'}

And, in the case of Greece, the oil dependency or energy dependency of the economy is significantly higher than in other areas or in the rest of the euro area.

First of all, on forward guidance: the decision was unanimous about its date and state dependency.

{'dependent (40)', 'could (2094)'}

So when people say that the LTRO could make the banking system more dependent on the ECB, they forget that there were no interbank markets before, because they were completely clogged up.

{'dependent (40)'}

The Council itself -- and we fully approve of this -- said that" we should not be dependent on electoral cycles or political influence ''.

Changes in the trend velocity of money and in potential growth are dependent on factors which are not, so to speak, connected to the calendar year.

And it is important that we are all united in purpose, because we are all dependent on global features, on the global economy and global inflation, in particular.

I said myself it is data -- dependent.

But it is also explicable: part of the core inflation that remains stubbornly high is, in particular, the persistent rise in prices of services and that, in turn, is in part dependent on the fact that in Europe we have an internal market.

But even looking at growth, how this recovery remains dependent on our monetary policy... Basically, if you look at the drivers of the economy, you see that consumption is doing well.

Inflation expectations and the delivery of price stability over time are totally dependent on the absence of these second-round effects in a period in which we have a hump in headline inflation.

For example, the bidding behaviour in the access to the LTRO is also dependent on the amount of bonds coming due for that specific institution in the first quarter of this year.

To this extent, we are data dependent and basically, that 's what the data tell us.

So, again, I would not express anything on any particular country but I would say -- as it was mentioned by ECOFIN -- that we must have stable figures which are not dependent on electoral or political cycles.

This is important, and it is dependent on our monetary policy stance and the transmission of this monetary policy stance.

And this level of credibility is entirely dependent, in the eyes of all observers and, I trust, of yourselves and the market participants, on our vigilance.

So, because we did not change our rates -LRB- neither the MRO nor the deposit rate was changed -RRB-, what we have observed in the market is that the positioning of EONIA, the very short-term rates, is dependent on the decisions of the banks themselves.

Now, again, we are dependent on our people -- the people of Europe.

So we have this forward guidance on interest rates which is both state and date dependent.

{'deviate (13)', 'differ (47)'}

These flows can differ as the design of the programme is flexible and the distribution of actual purchases often deviates from the ECB capital key.

{'deviate (13)'}

We still think that it is the valid picture, as published in the June Monthly Bulletin, and we have no reason to deviate from it.

If there was a development that would strongly deviate from the line in which governments have engaged themselves, our global assessment would have to take that into account, but we can not say more today.

So from today 's standpoint there is no reason to deviate from the indications we have been consistently providing in the introductory statement to this press conference.

The current wording of our forward guidance reflects exactly this assessment of side effects, and from today 's standpoint I do n't see cause to deviate from the indications we 've been consistently providing in the introductory statement.

But - to mention just one example - one of the criteria was that the inflation rate should not deviate more than 1 1/2 percentage points from the average rate of inflation of the three best-performing countries.

As for the future, let me do my work and we will have periodic checks as to whether I am in sync with this tradition or deviating from it.

So, I would point out that the European Commission also forecasts average inflation in 2000 and 2001 to be 1.5%, and we see no reason to deviate from that forecast.

{'deviation (40)'}

You have to distinguish between the structural deficit and the structural measures underlying the budget position and the cyclically caused deviations from the desired path.

On your first question, as I said before, there are temporary deviations from the capital key.

There have always been temporary deviations from the capital key for the simple reason that some countries do not participate in the QE programme ; Greece and Cyprus.

So these deviations from the capital key do n't indicate anything else from what I said.

But they are signalling - let me call it - no further deviation from the reference value, but rather some movement in the direction of the reference value.

We operate in very much the same way as the Federal Reserve System, with our large set of countries, and each time that we have looked at various indicators such as growth, inflation, unit labour cost evolution, in Europe and compared these with the United States, we have found more or less the same order of magnitude of standard deviation.

The other thing that points to a slight decrease in fragmentation is that the dispersion in the rate of growth of deposits -- the cross-country dispersion or standard deviation -- is going down and is actually half of what it was before OMTs.

As you know, the standard deviation of growth between the states of the United States is of the same order of magnitude as the standard deviation of growth of the countries in the euro area.

Of course the largest deviation from the ECB 's capital key is Greece due to their ineligibility.

It 's not so, it does n't affect the neutrality of the purchases -- and I 'll tell you the reasons why you observe these deviations.

The downward trend that we are witnessing this year is viewed as a temporary deviation from a baseline which will see inflation expectations going back toward 2%, but not at 2%, in 2016.

Reinvestments will take place in the same jurisdiction as principal redemptions with the aim to minimise deviations from the capital key.

I 'm still confident, but we have to remember that we have a mandate, and as I said before, we do n't tolerate deviations from our mandate that would cause ultimately a tightening, an unwanted tightening of our monetary policy.

Now, let me make absolutely clear that we wo n't tolerate prolonged deviations from price stability, and the main reason is that if these deviations feed into inflation expectations, they 'll cause a drop on medium to long-term inflation expectations, which by the way still are within a range consistent with medium-term price stability.

Again, I have to say very firmly that when we look at the dispersion of growth, for instance, or the dispersion of inflation in this vast continental economy which is called the euro area, with 306 million people, and we compare that with a vast continental economy which is called the United States of America, with a little less than 306 million inhabitants, there are figures which can be computed in terms of standard deviation for growth and for inflation.

If I take the year-on-year standard deviation in Europe on the basis of the first quarter of 2005, I have a figure of 1.2%, which is the lowest level since 1999.

As regards the evolution over time, we do not observe change in this standard deviation figure.

If you compute the standard deviation as regards inflation you have 0.9% on both sides of the Atlantic.

That being said, over the medium to long term, the deviation of money growth from the reference value should not be and has never been interpreted mechanically.

So, if you look at the evolution of this" standard deviation '', it has diminished in 2010 and we expect a further decline of this dispersion in 2011 and 2012.

On your first question, all vast continental economies such as the euro area and the United States have a degree of deviation in the growth rates of the different states or countries, deviation in their unit labour costs, deviation in their inflation rates and so forth -- even deviation as regards unemployment.

{'differ (47)', 'cautious (120)'}

This is one of the reasons why the Governing Council of the ECB has always been extremely cautious vis-à-vis rules of monetary policy based on estimates of growth potential, because you know in advance that the estimate of potential growth will differ, in some cases very significantly, from the estimates produced in real time.

{'differ (47)', 'may (1031)'}

But, then, one has to remember that the structural reforms necessary in the labour markets, in the product markets, in the goods and services markets, in government finance, in social security systems, may - and do - differ from country to country, and from region to region.

And this may take a period - well it differs from country to country - of, say, up to 30 years.

For that, another number of years will be required in order to fulfil the Maastricht criteria in full and it remains to be seen how quickly, and that may differ from country to country, every individual country is in a position to comply with the criteria.

Where we may differ from the Commission 's proposal is that we view the two phases, namely that of assessing the non-viability of a certain bank in question and that of deciding which action should be undertaken as clearly separate tasks.

{'differ (47)'}

That does not mean that there were no differing views.

And the voting rights assigned to each group would differ.

We have different fiscal policies, with differing levels of credibility for those fiscal policies, and we can see the difference in the spreads, which are very important in terms of facilitating the recovery -- or not.

There are several reasons for this and they differ in terms of their importance across countries.

Now, the sense of the discussion we had is that there were differing views about what is the intensity, how much is exogenous, how much is endogenous?

When we differ in our views and in our policies -LRB- it 's another obsession of some of you -RRB- there is no drawing line between north and south.

And there are practices differing from bank to bank.

Well they have differed in various Member States.

And the causes, well, they differ.

Yes, it does differ.

I would not say markedly, but it does differ in the sense that we are less pessimistic than the IMF.

Let me say that this concept, the guidance that we have given to the committees of the ECB differs from the previous programme, because that is basically what your first question is about.

Our capacity to anchor expectations differs and we face different levels of threat.

The forecasts we have available now do not, basically, differ from those which were published by the IMF.

Third, there was a good discussion on the need, I would say a majority on the need to trigger it now, but of course there were differing views about the need to act now.

The second question, well, I would say the readings of reality differ.

You are all aware of these differing views, but we are relatively confident that this can be overcome in time.

You can have disagreements about certain measures but differing perceptions about the other measures I mentioned, namely ABSs, very long-term refinancing operations, enhancement of additional credit claims, collateral and so on and so forth.

That differs per country.

The actual indications are that we see no reasons to differ substantially from the European Commission 's forecast.

I should also add that the various initiatives do not differ amongst themselves in such a radical way as to rule out this eventual convergence.

And the measures on the labour market that are being contemplated in various countries differ very much from country to country, but I do think it is very much of interest to restructure the functioning of the labour markets, in particular in the countries you have mentioned.

We have 17 countries and the business cycles of these 17 countries are not exactly the same ; they are not synchronous and they differ very much across the area.

{'doubt (119)', 'assumption (263)', 'might (766)'}

You might remember that some of you expressed doubts about this some months ago: I had to answer a lot of questions about whether we were right in making that working assumption of a gradual recovery.

{'doubt (119)', 'believe (492)'}

On the other hand, all the indications we have given - and I will repeat them again today - are such that I believe that there can not be any doubt in anybody 's mind as to the direction in which the next move will go.

I believe that, although it is true - as you say - that Ireland is without doubt the most, or at least one of the most successful economies in the euro area, the budgetary plans of the Irish Government were clearly out of line with the broad guidelines they had agreed to earlier.

{'doubt (119)', 'depend (251)'}

For the other countries, the countries that now are having deflation, the key question -- there 's no doubt that this sort of negative growth in prices depends on the lack of demand, but also on relative price adjustment.

{'doubt (119)', 'may (1031)'}

The unemployment rate is at the lowest since May 2009, though it 's still at 9.5%, and this may tell something about the need to do structural reforms, because there 's no doubt that some of this unemployment is structural and not cyclical.

{'doubt (119)', 'might (766)', 'believe (492)'}

And I have reason to believe, I might say from the highest sources, that there can be no doubt that France, as a full member of the euro area and the European Union, will live up to its commitments which it took upon itself when establishing the Stability and Growth Pact at the Summit in Dublin.

{'doubt (119)', 'prediction (7)'}

But, looking at the whole of the euro area, I doubt whether your prediction will come true.

{'doubt (119)', 'revise (215)', 'might (766)'}

The other is that the weakness in economic activity and the revised price stability projections for the medium term are also now affecting not only non-core economies, where one might have had doubts about the monetary policy transmission mechanisms, but also core economies, where these issues never existed.

{'doubt (119)', 'risk (3278)'}

Well, there is no doubt that if you look at the world today, you see the geopolitical risks have increased all over the world.

On the first question: there is no doubt that by expanding the collateral eligibility rules, as we have done to increase access to the 3-year LTRO to a much larger variety of banks, we are also expanding the potential risk that we are taking onto our balance sheet.

{'doubt (119)', 'seem (653)'}

There is no doubt about that, it seems to me, in the perception of observers and market participants.

We pay very close attention to those expectations and, as I have said, it seems to us that these inflation expectations, on the basis of the indicators that we have at the moment, seem to be correctly anchored In my view it is because nobody doubts our determination, given the fact that we have proven that we intend to be inflexible in fulfilling our mandate.

As to whether it is the full explanation, as you seem to be implying, there I have my doubts.

{'doubt (119)', 'speculation (54)'}

I doubt whether we would also see less speculation and guesswork in your circles.

{'doubt (119)'}

There is no doubt: we issue the currency and I sign the banknotes.

Yes, I never doubt your investigative capacities.

And so that 's what I said: it will be really in the Greek Government 's capacity to respond with policy decisions, with actions, that will dispel these doubts.

But let me ask you, would you think it is legitimate for the ECB to take its decisions based on doubts about a government 's capacity to implement the measures?

As I just said in the introductory statement, there is no doubt that low growth is the outcome of economies that need to have structural reforms, both in the product and the labour markets, but also in many other sectors, such as education and the judiciary.

There is absolutely no doubt that it is much easier to adjust if you have inflation of 2% than if you have an inflation of 0% because of the rigidity of prices and wages, the downward rigidity of nominal prices and wages.

As Ireland strives to regain market confidence -- and frankly I have very few doubts that it will succeed -- it is of the utmost importance that the commitments of the Irish State are met in line with standing contracts and agreements.

There is no doubt that some profound changes are taking place in the world energy markets and you know which ones I am thinking about.

So, to conclude, I would ask the IMF to do its very important job, and I am in no doubt that it will continue to do the job very well.

But it is not the case, precisely because everybody knows that we are fiercely independent and that there is not the slightest doubt that we decide in this totally independent way.

But as I said, we have absolutely no doubt that the action will be taken and will be as speedy and transparent as the other European countries and as the markets themselves require it to be.

But some German figures are clearly a good sign, there is no doubt.

It is a stimulative monetary policy -- there is no doubt about that.

I have no doubt about that.

But when we look at the consequences, the impact that our monetary policy measures had on financial markets, I think there is no doubt that they 've been highly effective.

No, we have n't discussed really the scarcity issue because so far we 've given plenty of evidence that whenever there were... by the way these problems, these doubts were present at the very beginning of our programme.

Why are you raising rates when doubts are being expressed in market literature?

There is no doubt in the mind of any market participant, observer, investor and saver that we will act and do what is necessary when it is necessary.

There is no doubt that these measures, like the TLTROs and the ABS and the covered bond programme, will unfold over a certain horizon, and we have done a lot of things since June.

But there is no doubt that conditions in the financial markets have been gradually easing since July 2012.

Whether the high figures that the Commission quotes will materialise gives us some reason for hesitation or doubt.

And I doubt whether anybody else would take an initiative to that effect.

So nobody can doubt that any longer.

In any case, it is already being very predictable that you have little doubt on what we will do next month.

On the backstops, another thing that quite astonishes me is the doubts that have been expressed about whether national backstops will be in place by the time we start the SSM.

It is certainly our collective duty to explain better, but there is no doubt that we all agree on the direction to be taken.

There is no doubt about that.

As regards the alertness of the ECB, I think that nobody has any doubts about our alertness.

So there 's no doubt that there are, sort of, quite sizeable flows now that are the main reason for this buoyant market.

Thinking more about the future, as was implicit in your question, I have doubts that on the other hand, one can go back to the simple life of monetary policy as it used to be, with very small central bank balance sheets and just policy targeting the overnight money market rate.

So there should n't be any doubt about that, and we have plenty of instruments, as you know.

I do not think that there is any doubt in the minds of observers, market participants, investors and households that we would be fully capable of doing that.

So one should n't have any doubt that the Governing Council in its collective wisdom not only has the power, the willingness and the determination, but also the cohesion that 's necessary to take the actions that are needed.

But having said that, there is no doubt that inflation is low and will remain low.

We doubt the conditions that I mentioned before.

However, I would say that there is no doubt that some of the stressed countries are actually making very significant progress in terms of fiscal consolidation.

An additional remark we made was that there is now little doubt that a large part of what we are observing in the oil prices and in the commodity prices is a demand-driven process, that is, coming largely, but not exclusively, from emerging Asia and is also producing a lot of consequences in the manufacturing sector.

But if you are in a position where there are doubts about your present level of cost competitiveness, then of course wage moderation remains absolutely of the essence.

Well, the discussion today and the overwhelming majority with which the package was approved makes full justice of these doubts about the willingness to act.

But I think it would be wrong to think that doubts will evaporate by virtue of this.

As regards the United States, of course I am happy that a solution has been found, and I had no doubt that a solution would be found.

That is absolutely obvious and was seen by all observers, no doubt about that.

This is clear, and if you look at the market participants, observers, investors, savers the world over, they have absolutely no doubt that we are independent.

It 's quite interesting that until a month ago, nobody had any doubt that public debt, sovereign debt in the euro area, was actually very, very big, and now some people worry that we wo n't have enough bonds.

They still have some doubt that we will really deliver price stability.

Well, let me say this: on the basis of the statement I have just made, there can be no doubt in anyone 's mind as to the direction in which monetary policy will be moving in the near future.

I also refer to the statement of the Minister of Finance, who knows the available data and who recently stated that there is no doubt that the country fulfilled at the time the criteria.

That is why I say that there can not be any doubt in anybody 's mind as to the direction of future monetary policy.

Well, I do not think that my statement of today - as I have said before - can leave any doubt about what we have been doing.

All the information I have from all the euro area countries and fellow citizens points in the same direction, without a doubt.

As I have said already to the extent that our scenario is confirmed, it is clear that further withdrawals of monetary accommodation will be warranted, and there is no doubt about that.

It is as numerous as the United States, and I doubt that, in a press conference, Ben Bernanke would have a question on Alaska or Massachusetts...

However, there is no doubt that we can see the effect of supply and demand and the encountering of supply and demand, as well as the effect of fairly high levels of cartelisation in the various markets.

There is absolutely no doubt that we must be faithful to our mandate, and our mandate is clear.

To the extent that what is at stake is the position of the ECB itself and if there is any doubt on the ECB position, yes, you got it perfectly right.

But we think that it was exactly what we had to do and there is no doubt about that.

You have doubts, but that is what we have done so far.

And I think that your colleagues have no doubts about what I have said.

As of cyclical factors,, there is no doubt that the labour market in general is experiencing the combined effects of a credit crunch and the unavoidable fiscal consolidation that many of these countries have had to undertake.

So there is little doubt, in our view at least, that one should act.

So that 's why there should n't be any doubt about doing structural reforms.

Certainly, just to make it clear, the capital key remains our anchor in what we do on reinvestments, just to clear the slate from any doubt.

By the way, incidentally, in just giving you these numbers about employment, let me add, those who had doubts about the equity of our asset purchase programme are being answered because the most equitable measure of all is to create employment and to decrease unemployment.

But from this perspective, the recovery has, to date, been confirmed without too much doubt.

So no doubts whatsoever about the effectiveness of our monetary policy, regardless of whether structural reforms have been implemented or not.

It will be denominated in euro, there is no doubt about that.

So, one has no reason to doubt the commitment of the government.

If you have any doubts about that, you also have the IMF team who was in Italy for a financial sector assessment.

There is no doubt anywhere that we are and will remain faithful to our mandate.

There is no doubt.

So I have absolutely no doubt that, all things being measured appropriately, Greece is in a much better state today, taking into account its activity and output, than it was before.

For us, for the European Commission, for the peers, there is no doubt about that.

So what has been done is appropriate, we have no doubts about that, and it has given full credibility to the programme that had already been decided upon, but which, prior to these decisions, was lacking credibility.

And there is no doubt that significant progress has been made in terms of fiscal consolidation throughout the entire euro area.

So, no doubt about that.

{'doubtful (1)', 'maybe (396)'}

I did not say that, but I said that it is doubtful whether a range of rate changes coming quickly one after the other would by themselves enhance confidence rather than maybe even undermine confidence.

{'exposure (34)', 'fluctuation (18)'}

In general, the ECB 's profitability is subject to considerable fluctuations due to large exchange-rate and interest-rate exposures arising from the structure of its balance sheet.

{'exposure (34)', 'may (1031)'}

Well, the asset quality review includes all portfolios, and that includes also, of course, the exposures and securities that one bank may have on other banks and those assets are then subject to the exam to see if they are properly valued in the balance sheet of the banks.

But we have to say that really in the aggregate, what 's happening in Argentina and Turkey so far does n't show any significant spillover, although at a level of individual institutions one may well see significant exposures to local realities.

{'exposure (34)', 'risk (3278)'}

As regards the risk exposure of the ECB, based upon our assessment, an amount of $ 1.339 billion was transferred from this surplus to the provision that we are making against foreign exchange risk, interest rate and gold price risks.

{'exposure (34)'}

If you take the total private sector deposits in Greece, they are $ 120 billion, while the Eurosystem exposure to Greece now is, as I said, about $ 130 billion.

But also other policy measures are needed in order to reap the full benefits of our monetary policy, and one of them is to address the non-performing loans and more generally non-performing exposures in the euro area.

Now, on the first point, as a matter of fact the BIS, the Basel Committee was not able to agree on a treatment of the sovereign exposures in the banks ' balance sheets.

There is n't any world treatment of sovereign exposures.

Other central banks have been reducing their exposure to the euro.

Now, of course, these are the initial decisions.There 's still a lot of work to do about that, in terms especially of transferring the assets between the two entities and the prices at which they 'll be transferred, the treatment of the exposure in Angola.

Now, of course we can have individual situations of significant exposure to local crises.

There is then a target for the formation of provisions when new NPLs would be -- would emerge so that the formation of provisions would have to go up to 100% of the exposures during two years in the case of the exposures are not secured by any collateral, and seven years if they are secured by collateral.

It had significant financing easing effects, and one of the effects we often forget is that in spite of the fact that the net take-up was not remarkable, it did change significantly the average maturity of the banks ' exposure to the ECB, because they basically substitute their present exposure, short-term maturity of three months, with the longer-term TLTRO, and now the average exposure is just less than a year.

So you see that that has had an effect on the duration of their exposure.

So, even though overall it continues to be a small exposure with respect to euro area banks and with respect to what it was at the beginning of last year, it is going up.

But let us not forget that they are also paying less on the LTRO exposure: so, they get less on the deposit, but they pay less on the other side.

So far, we have reached an exposure to Greece of $ 110 billion, which is the highest in the euro area in relation to GDP.

The third channel is the financial channel and again we do not see a very significant exposure of the euro area towards China.

On the direct trade channel, the conclusion is the exposure of the euro area to the Chinese economy is not very significant.

There are different cyclical positions ; there 's different exposure to external shocks.

{'fluctuate (22)', 'fluctuation (18)'}

The EONIA fluctuates between the deposit rate and the main refinancing rate, so the fluctuation range is unaffected by the level of the marginal lending rate.

{'fluctuate (22)', 'may (1031)'}

For the remainder of this year, we expect the inflation rate to fluctuate, or hover, or whatever you may want to call it, around 2%.

Therefore net purchases per jurisdiction may fluctuate owing to the timing of these reinvestments.

{'fluctuate (22)'}

Also, I will not evaluate what the impact is of statements that are fluctuating on either the euro or myself personally.

First of all, the euro has for some weeks now been fluctuating around a level against the dollar of around 1.08, which is still slightly below the average level of the euro in the two years preceding the introduction of the euro.

When I look at the medium term, I am looking at the inflation expectations expressed in the Survey of Professional Forecasters, and we will have to see what it says in a month 's time, but thus far since the setting up of the euro these expectations have fluctuated between 1.7% and 2%.

That being said, of course they fluctuate, and our successive analyses are very much based on what we are observing on the side of inflation expectations.

Well, you will have noticed that in my Introductory Statement I did not use the concept of" hovering '', but of" fluctuating ''.

{'fluctuation (18)'}

So, from that standpoint, what we have observed in the most recent period has been a fluctuation of interest rates which was due to the fact that there is a better functioning market.

It is natural, in a wide economy such as ours, with 16 countries and 330 million people, that you have fluctuations and cycles corresponding to an idiosyncratic situation.

{'hinge (2)'}

All this hinges on low interest rates.

{'incompleteness (1)'}

Now, the important aspect of the current discussion, that 's your first question, about the European monetary union, its reforms is that the member states have realised how incomplete is our monetary union at the present time and how such incompleteness has made the crisis that we are just coming out of more serious than it would have otherwise been.

{'indefinitely (2)'}

First of all, we will tell all banks, as we always have done, that the extremely bold and important enhanced credit support measures we are providing will not continue indefinitely -- we have said that from day one.

{'instability (30)', 'could (2094)'}

We are constantly monitoring markets and generally the financial sector, the banking sector, trying to see whether our monetary policies -- I should say not only the ECB 's monetary policy, but all the major central banks ' monetary policies -- could become a source of financial instability.

{'instability (30)', 'may (1031)'}

All in all, when you look at periods of instability − and we have seen them in Greece, and in Portugal and we are seeing them in Italy now − you see that, while instability may be hampering the hopes for a recovery in these countries, it does not really hurt the euro area, the foundations of the euro area, as it used to do a few years ago.

That 's not to underestimate the fact that protracted instability may undermine confidence.

{'instability (30)', 'probably (249)'}

This is probably one of the reasons why the instability has produced some movements, but not dramatic movements.

{'instability (30)'}

With regard to your question on the instability in Italy I have no comments.

And so far we have not seen signs of potential financial instability of the like we 've seen in the pre-crisis times.

It 's also true that in the years previous to the entrance -- in the last four or five years, there have been signs of instability in prices and in economic policy.

We have a lot of parameters, and those together concur to influence inflation and price stability -- instability -- and that is, again, the needle of our compass.

As such it does n't generate instability.

And a strong agreement is one that produces growth, that has social fairness, but that is also fiscally sustainable and addresses the remaining sources or factors of financial instability in the financial sector.

And, I repeat, we can not afford to return to a situation of financial instability such as what we have been experiencing for two and a half years.

In our view, all features of this new scheme should be designed both to induce the soundest policies -- and in this respect, you measure the importance of all that we have said on the automaticity of the surveillance process itself, which we judge to be very important -- and to help effectively to avoid systemic financial instability.

{'likelihood (25)'}

As to your second question on the strategy, I would like to point out that the evaluation of the strategy was carried out by the entire Governing Council and was confirmed by the Governing Council, including, in all likelihood, my potential successor.

At this point in time, this is something the likelihood of which is very, very small.

We can also safely say that the likelihood of having low inflation in the 0.5%, 0.6% that we 've seen until, what, a year ago has certainly decreased.

At this moment, I would say -- with some element of caution, because we will have the projections in December -- that the likelihood of the level of the headline consumer price index, as an average, being above 2% this year is certain, and remains likely for next year, on the basis of all the information that I have at this moment.

We will still have the very great likelihood of figures for employment and unemployment that will not be flattering for a significant period of time.

I am confident that there is no likelihood at all that the same exercise is going to be repeated in the future.

Thus, the projections will be based on hypotheses which, to be honest, will in all likelihood not turn out to be true in the future.

So, what we did was to remove the explicit reference to the likelihood of an increase in the pace of purchases in the near future.

It is absolutely essential that the macro-prudential recommendations are translated into effective action if we are going to accomplish the ultimate objective of the new framework for macro-prudential supervision, which is to prevent or at least to minimise the likelihood of future crises and to strengthen the resilience of the financial system.

And if your question were to be whether or not there is a likelihood for California, Alaska or Florida to have their own currencies, I would do exactly the same.

Having said that, we stand ready to reinstate the waiver as soon as we are able to make a positive assessment about the likelihood of a successful completion of the review.

{'may (1031)', 'believe (492)'}

And we do believe that the recent hesitation in the confidence figures, if I may call it that, has to a very large extent been influenced by the incidents, the blockades on the occasion of the rise in energy prices that many European countries have experienced.

On the contrary, we do believe that this rate hike and this monetary policy stance create the best conditions for the robust growth which is going on - and with which we do believe that the euro area has more or less reached may I call it" cruising altitude '' after the acceleration - and for preserving that cruising altitude for the medium-term future.

Having said all this, having stated these conclusions, which I believe are strongly supported by the empirical evidence and experience, I think that we can add that in our view it will be conducive to growth to implement fiscal policies in the medium and long-term perspective and not in a way that may impair the credibility of the fiscal framework of EMU.

We believe that the so-called core inflation rate will come down, but implied in your question is whether this will happen in the next few months: it may take a little bit longer.

What we are strongly interested in, what we do believe is that - may I paraphrase my American colleague - a strong euro is in the interests of Europe.

The enabling clause itself has - as do all other decisions - to be ratified by all parliaments of the EU Member States and this is expected to take some time - I believe that it is expected that the ratification procedure may take up to two years.

{'may (1031)', 'cautious (120)'}

Now, of course we 've got to be cautious here because we talk about the aggregate of the banking system in the euro area, and of course aggregates may actually conceal different realities.

{'may (1031)', 'perhaps (538)', 'cautious (120)'}

I am very cautious and I do not draw any definitive conclusions at this stage, but the monthly flow in February was positive and we view this as a signal that perhaps the situation may now be a little more favourable.

{'may (1031)', 'possibility (303)'}

We do n't want to exclude the possibility that they may happen.

However, I should also add that this switch in no way rules out the possibility that we may, at some point, return to the fixed rate tender system.

{'may (1031)', 'risk (3278)', 'probability (40)'}

It 's quite clear that as growth perspectives improve, certainly the probability of these tail risks may go down, but we are not there yet.

{'may (1031)', 'volatility (407)'}

But, certainly, we have observed an increase in global volatility, coming from major monetary policy decisions or announcements of decisions that may be taken in the coming months.

{'may (1031)'}

And the inflation rate would have been negative this year, and if I 'm not mistaken -- it may well be I am -- about half a percentage point less over the following two years.

If I may respond to the second question, by saying that we have n't yet examined completely the details of this.

But I am aware that to explain real rates to savers may be difficult.

In answer to your first question, a polite, lively debate may even be welcome, because it helps us to explain better our monetary policies, and their shape and their success.

Because this will give you an idea of how long it may take to do this.

Of course, commercial banks may react to our decision by choosing to lower their rates if they think they should do so, and this would be then transmitted to savers.

It clearly involves complexities, both accounting-wise, legal-wise ; and it may mean different things to different people. ''

One may have some amounts that are not sterilised immediately.

But as I have said on various occasions, mainly because of the base effects of the development twelve months ago which, month after month, will fall out of the figures, the road to the level under 2% may be a bumpy one.

There may be months in which inflation stabilises or there may even be months in which it shows a further rise.

It may have struck you that I used the same language today as I used at the last press conference, namely that output growth is expected to be broadly in line with the trend potential growth.

I recognise that the selling of Deutsche Mark circulating in particular in central and eastern Europe and in Russia may partly have an impact on the exchange rate.

And again, part of that small part may then be converted into other assets, which makes the conclusion justified that the monetary impact of these moves in the run-up to the cash changeover is very limited indeed, if not negligible.

We can not deny that it may have some impact on the exchange rate as well.

In a way we are responsible for the level of the sea, but some swimmers, if I may, can swim above that level other ones below.

But I would phrase it differently: do we respect the Treaty, as it is today, as it may become tomorrow?

So not with the provision of liquidity, which actually is regulated by a different provision, in Article 18.1 in the ECB Statute:" In order to achieve the objectives of the ESCB, the ECB and the national central banks may conduct credit operations with credit institutions and other market participants, with lending based on adequate collateral. ''

That may come at the end of the first review, because that would be clear.

But may I refer the remainder of your questions to the second part of this press conference.

What this sentence basically says is that there may be heterogeneities -- and that 's particularly true at times like this.

And these heterogeneities -- these differences -- may be differences in inflation, growth, employment, competitiveness and productivity.

And they may be temporary, like those we have seen in the United States, for example.

Or they may be structural.

And as this plan is being applied, some of them may, for a temporary period, lose access to normal monetary operations.

In a sense, they may benefit from this relative quietness -- quietness may be a too strong word -- relative peace of financial markets, but it is also a window of opportunity for banks to repair their balance sheets, to deleverage what they ought to deleverage in an orderly fashion.

What is important to underline is that there is a huge amount of money in the second programme approved for Greece to deal with the recapitalisation of Greek banks and also all the operations to restructure the sector, which may involve loss absorption.

Some banks that have had a big impact as a result of the PSI, because they had a lot of Greek bonds and so on, may have to be restructured, meaning merging with others, resolved and so on.

So you have a base effect which produced much lower inflation data in March and may well produce higher inflation data next month.

You want to have an inflation rate that is below, but close to 2% because -- and this is exactly what happened in Japan -- you may actually think you have a non-zero positive inflation rate, while as a matter of fact you are already in a deflationary situation.

And what happens is that we see that the EONIA has a tendency to hover over the deposit rate, wherever it may be.

No, I very much welcome it, if it is indeed the first sign that confidence may be returning.

Although also there, there are first signs -- but they are not yet very robust -- that we may have reached the low point in confidence and may even already have passed it.

Well, this may be a good opportunity to say exactly what I said when we met the trade union representatives.

Banks can either participate individually, or they may form a group if certain criteria are met.

As far as the details of the TLTROs, let me say just a few things, and then for further questions, I will ask you to read the press statement, and also there will be a debriefing after the press conference by the staff of the ECB on all further questions you may ask.

But there is no scope for any ex ante co-ordination, if I may call it that, of policies.

In other words, you may say that we have kept interest rates on hold based on the considerations I have outlined to you.

The developments at the last refinancing operation may induce us to do more intensive fine-tuning whenever that may be necessary again in the future.

If at a certain point in time you have very strong expectations in the market and fixed interest rate tenders, you may have the same kind of problems on the day of the auction.

I may also add another thing, however, that when you add to bank credit flows, other sources of external financing by the companies -- namely, debt issuance on capital markets and equity issuance -- you see that the decline in bank lending has been compensated by equity and bond issuance.

So, on occasion, there may be disagreements, but all in all, the trend of this effort has to be judged positively.

Keep in mind that the expectation for action itself injects a certain market behaviour, produces a certain market behaviour which may have nothing or very little to do with fundamentals.

As regards price stability, may I invite you to our next meeting because then we will have the medium-term projections and will be able to assess the situation better.

But, that being said, the information received may continue to be mixed and we continue to be very, very keen on analysing the new data and information and on being vigilant.

On your second question on the dilemma of any central bank, may I remind you once again: we are responsible for price stability.

Now, the last thing that the Governing Council may want is actually an unwanted tightening of the financing conditions that either slows down this process or may even jeopardise it ; and that 's why we retain the second bias, or let 's call it, reaction function.

For example, the labour market slack may be bigger than previously estimated, but as the economic situation and growth improves, so will the labour market, and this will be absorbed, '' and so on for all these various reasons.

And that 's why I said before: in the presence of this growth recovery, if we are to experience an unwanted tightening of financing conditions that may jeopardise the convergence in the medium term of inflation to our objectives, then we 'll have to act and we 'll have to use the APP bias and other measure as well.

One has to realise that some effects may also have come from the ending of the General Motors ' strike and, by definition, these are temporary factors.

But then we also realise that this indeed surprisingly strong performance of the US economy may, in part, be attributed to temporary factors.

I focused on the labour market, but in fact there are other reasons why this response may be delayed.

It is only after they have finally bunched all their orders together very much towards the closing time of TARGET that they know precisely what liquidity needs or surpluses they may have.

As far as Portugal and Ireland are concerned, the press statement says that Outright Monetary Transactions" may be also considered for Member States currently under macroeconomic adjustment programme when they will be regaining bond market access ''.

On" conditionality '', the assessment of the Governing Council is that we are in a situation now where you have large parts of the euro area in what we call a" bad equilibrium '', namely an equilibrium where you may have self-fulfilling expectations that feed upon themselves and generate very adverse scenarios.

Well, why did, may I say, our founding fathers actually want to have something below but close to 2%?

In other words, you may well have a situation where you think that you are at say 1% inflation but, instead, it turns out that you are actually at minus 2%.

In the same week you may have a number of signals.

Whatever pros and cons may have been put forward as arguments, the conclusion of the European Commission, the ECB and the European Council was that we had a Treaty and that we had to stick to the Treaty.

As you may remember, the SMP was created to address malfunctioning or non-functioning in the channels of transmission of monetary policy.

You did n't say it but you may have implied it: whether accommodative monetary policy removes the incentive to carry out structural reforms.

And if I may say so, Mr President, we at the Governing Council are going to discuss this in more detail.

Banks may not lend to the economy because of funding problems -- and they have been addressed, because of capital shortages and, to some extent, they too have been addressed by the banks themselves because a significant amount of capital has been raised in the last two years.

First of all, on the -- may I call it --" robustness '' of financial institutions, generally speaking in Europe they are robust.

There are some conversations in the market about potential limits that this programme may meet.

And this may be due to many causes.

We may see negative numbers of inflation in the coming months.

Lower oil prices may be lower because of demand and/or because of supply effects.

What I am concerned about is the tendencies that may emerge, and indeed may already have emerged, towards increased protectionism, as has happened in the United States in the steel sector.

And so I do have - if may I say so - full understanding for the judgement that has been reached and formulated, be it in very difficult circumstances.

Therefore, where competition is less, prices may rise more.

So, all those things have changed and also, if I may say honestly, if we had moved one month ago you would have been very surprised.

But, in general, what we are looking at, of course, is not so much the cyclical developments which may influence decisions on budgets as primarily the structural developments which are desired.

But we may not repeat them if we judge that you and the markets understand that a certain forward guidance is valid until further notice.

So, in other words, we may not repeat the words if we are convinced that you and the markets understand that, if we do not say anything, it does not mean that we have changed our mind.

What he meant to say is that we may have to repeat it every month because we are not sure that you would actually get it unless we do so.

People may have different views about that, but the impression is not at all of a political war here.

I mentioned in my introductory remarks that we consider that, taking everything into account, we are currently seeing confirmation of the recovery in the euro area, even if growth may be uneven.

To your first question, it should be noted that we did not decide today that the new level of our policy rates was the lowest level that can never be crossed, whatever future circumstances may be.

As regards the issue of future rates, we did not decide that the new level of our policy rates was the lowest level that can never be crossed, whatever future circumstances may be.

You may, for example, have discordant views within a particular government.

I may say a few more things about credit and fragmentation later, but I 'm just responding to your specific question.

Well, I do not know what financial markets will expect, but we think with this move we have cleared the horizon, although it may be a moving horizon.

The previous hikes in interest rates may have had an effect on the turn-around in the sentiment about the exchange rate.

Admittedly, we may not be 100% successful, but to my mind, we are increasingly successful in speaking with one voice - both ministers and governors.

I know that the exchange rate of the euro, even after the recent appreciation, does not yet reflect the fundamentals, whatever they may be.

But there still is under-utilisation of capacity - the output gap may be closing, but I would not say that we would want to cap growth in any way at this stage and at this rate.

So you may conclude that we did not intervene.

At the marginal rate, the ECB may allot either 100% or less.

If I may answer the question first.

And the futures indicate that the oil price may at some point fall, but they have already done that for a long time.

When oil prices come down, you will - after a while - also see petrol prices coming down for the consumer, and you even saw that happening by a few cents this week and, when they go up, you see with a lag - which may be several months on average - that these prices work their way through to the consumer price level as well.

And I think it is the right way of looking at what we have been doing in the past and at what we may do in the future, based on our own analysis and judgement of the facts and figures.

-LRB- May the best team win ! -RRB-

We may actually come back on it later on.

As you may remember, the change allowing purchases below the DFR -- the Deposit Facility Rate -- and below two-year maturities considerably expanded the eligible universe of our programme, giving it more flexibility.

Well, we have always been convinced that the euro will play an increasingly international role over time, but it may be a slow process.

Nonetheless, the fact that this is happening illustrates that we may have been right in our expectations.

So, although in the beginning I may have been a bit sceptical about the significance of such a dialogue, I must say I increasingly appreciate it as a golden opportunity both to hear and to tell our, may I call them our political counterparts, what we think of them and what they think of us.

They, if anything, may be part of our information set that defines our monetary policy.

So we expect that these red figures may continue for a number of months, both for loans to non-financial corporates, for overall loans to the private sector and also for M3 which were slightly negative in November.

First of all, as you may know, we are a signatory to the Central Banks ' Gold Agreement that was published on 8 March 2004 following discussions by a number of central banks.

There are different legal arrangements from country to country: in some countries the decision is left to the Executive, whereas in other countries the decision is shared by the central bank and the Executive ; still in others, the decision may be left entirely to the central bank.

But then, on the other hand, as you may well recall, I did push the door halfway open for a decision to be made at a later stage.

We are an institution that is already, if I may, a federal institution in the institutional framework.

But if I may quote myself, I said," within a monetary union '' -- which the euro area is and which the United States is --" deflation is not a meaningful concept when applied to individual regions '', like New Hampshire or Germany.

I think that 's the ultimate yardstick by which we will measure the success of the present measures and any other measures that we may take in the future.

In the old days -- - if I may call them" old days '' now -- we always talked about the first and second pillar, as if there was a ranking.

I think that if you look at the drivers of this recovery, on the one hand we have export growth, and we think that global demand may continue to be what it is and, if anything, increase.

Even when we look at individual countries we may actually see negative inflation rates in one or two countries, but then we should also ask how much of this is due to the necessary rebalancing of an economy that had lost competitiveness and had gone into a financial and budgetary crisis?

So, while it is true that there may be short-term implications, you want to counterbalance them with all these considerations.

So, one would not rule out a certain behaviour by the banks that would like to present their best data by the end of 2013, which means that this is going to affect credit flows, which means that we may have different figures in the coming weeks about that.

Things may get better, but they may stay as they are, or even get worse.

We certainly stand ready to act, whichever source these developments may derive from.

Supervisors ca n't have responsibilities that pertain or may pertain to the taxpayer.

On the first question, I may be wrong but I do not see, off hand, any relationship between the two programmes.

Because we said for the adverse scenario, the capital requirements may not be demanded immediately.

And it may come from all over, in which case the forward guidance is meant to make sure that you want to look through this news to make sure that their impact on the medium-term assessment of inflation is contained

No, I do not want to point to individual trade unions, however large they may be.

However, I may actually have a partial answer.

A bail-in in itself is not a problem: it is the lack of ex ante rules known to all parties and the lack of capital buffers or other" bail-inable '' assets that may make a bail-in a disorderly event.

In other words, when you have a very important share of financial intermediation taking place through capital markets, then you have assets that, potentially, the central bank may decide to buy.

Just as a last word: if I may repeat our leitmotiv, because in our view it is absolutely crucial: provided a number of structural reforms are carried out or pursued in Europe, inter alia in terms of goods, services and labour markets, Europe 's growth potential will be maximised and the employment benefits of growth will also be maximised.

The size may have been a surprise.

We do want to be credible which does n't rule out that, on some occasion in the future, we may be forced to surprise markets.

It was not an issue, but it was one of the factors taken into consideration - co-determining, if I may put it that way, the size of the rate increase.

But that was not even ripe enough, may I say, to present to the Governing Council, let alone to you.

It is also in line with the Treaty that the European Central Bank may provide facilities in this context.

And also because, as I said, it is not only the absolute magnitude, but also the change in size of this phenomenon - if I may call it that instead of a distortion - that has monetary policy implications.

Under the first pillar, we have this new phenomenon of correcting the, may I call it again, dynamics of the M3 developments.

But if I may make one comment, I would like to emphasise that our main interest rates are currently at 2ï ¿ 1/2%.

The letter to Secretary General Solana which was written in December last year was a purely administrative and, may I say, usual affair.

So there are several issues and, in the end, it may well be the case that, to launch this market, one may need third party guarantees.

It is clear that the latest indications we have of monetary developments have not confirmed what we had seen some months ago when, as you may remember, M3 growth was starting to decline progressively.

The net injection of the liquidity may really only last for a relatively short time, less than a year.

I mentioned potential further non-standard measures that may be taken.

But this may not be true in the future.

I do not want to pre-empt in any respect what we may say then.

I will repeat it if I may in my own words.

Our balance sheet will continue to expand under all universes, either under the measures that we have already taken, and/or under measures that we may have to take if needed.

So the lessons from other countries and other jurisdictions are very important in the sense that they make us think about how to make the most of the measures we may be taking if needed.

On the precise amount, I can not really make any comment: first of all, because it is a decision of the Member States ; and second, because it is a decision that has to be calibrated vis-à-vis the eventual shortfalls that may come up.

But, as I said, two other backstops are potentially usable to meet the shortfalls that may emerge from the asset quality review.

There are certain encouraging signs on nominal wage growth where we start seeing some movements which may support price pressures in the coming months.

If we have an increase in tariffs, increase in protectionism, there may be direct effects, trade related effects.

We all know that these external shocks may indeed happen.

We mean that we are ready to adapt this ample accommodation to any unwanted tightening of financing conditions that may alter our medium-term outlook for price stability.

Well, the first thing to retain is nevertheless that the set of unconventional instruments that were used are now part of the toolkit of monetary policy to be used if necessary in situations that may justify again that those instruments would be used.

I am not fully sure of that but I think reading, by the way, several academic papers that have been thinking about this, that other instruments may become necessary and a broader targeting of other interest rates to ensure an effective transmission of monetary policy.

Of course if the bank is not profitable for many years then the solvency issue may arise later down the road.

We did n't want to discuss today the specifics of the instruments, but rather to determine and assess the stance that we may have to take in March.

Here the view of the Governing Council is that we should absolutely reject any suggestion that we may do less than what 's necessary to achieve the objective of the inflation rate of below but close to 2% without undue delay.

So we have to take seriously the fact that low oil prices, low commodity prices for a long period of time may actually have second-round effects that we definitely want to take action against.

And, of course, the interest rate differentials may also have something to do with that.

This combination, we may disagree whether the source was predominantly one or the other, but certainly nobody would disagree about the combination of the two.

And this is a much longer process that does n't have to do necessarily much with expectations and self-fulfilling expectations, but it takes -- it may take a long time, because it takes changes -- it takes movements of factors, people from one sector to another, and we may well observe this phenomenon in the so-called deflation countries.

Second question in the middle: you have to be aware that many central banks - may I say, in this particular case, including the Deutsche Bundesbank - are in the habit of regularly selling, and have already sold, their net accruals of foreign reserves stemming from their investments in US dollars or yen.

Our expectation - based on an analysis of what we are seeing around us - is that it may indeed have proven to be the peak, but we can never be sure.

However, next Monday you will have another price index figure and our expectation is that you may indeed have seen the peak.

And on top of this, you may have foreign investors as well, which certainly do not borrow from the ECB, but can bid at the auctions.

We do think that in the course of the coming two years the growth performance of the euro area will not stay below, and may even go beyond, the growth performance of the United States, remarkably and admirably high as it is.

All I can say is that circumstances may change and I have already answered the question about the bias, using the word" creeping in ''.

I think there are usually, by and large, three reasons why banks may not lend.

I can always fully understand - but that has nothing to do with my job as a central banker - that governments may be inclined to alleviate the burden for some and make it even heavier for others or to find room in their budgets by cutting expenditure in order to take countermeasures on account of the weakest categories in society.

But, if money and credit growth increases further, a re-assessment may be appropriate.

But may I ask the Vice-President if you want to add something on the ECB 's stance on Greece?

It 's quite clear that if we have retaliation, we may have effects on confidence that I mentioned before.

We hope it will come, we may even think it will come, but it has not come yet.

I mean, the issue you may have in mind has not yet been decided.

But as different as the circumstances of their respective economies may be, I can not really see any difference in the actual behaviour of the two central banks.

We do what we have to do at any time ; we consider that it is our duty and our responsibility to be, if I may say so, neither behind the curve nor ahead of the curve, but to do at any given time exactly what we judge appropriate.

Now, if I may elaborate on the second question about Latvia.

I may be willing to answer questions about myself at the date which is closer to the end of my mandate than it is today.

But also there is a fact that strong growth may produce stronger potential output growth as well.

If I may add something.

You may remember that I said several times that, on the basis of our cross-checking of the economic analysis and the monetary analysis, we had judged it to be time to increase rates.

On oil price, yes, indeed ; increase in oil prices may be compensated by appreciation in the euro, although it 's not easy to understand exactly the timing of these compensations because oil prices have gone up, gone down.

Each of us -- the 19 -- fully accept that other colleagues may have good arguments -- may have good analyses -- that are worth being examined and incorporated in this collective collegial wisdom that I have to express as the spokesman.

That agreement, subtle as you want, has been in place for decades now whereby policymakers, of course if you do take monetary policy decisions, they may have consequence on the exchange rate on both sides -- on all sides of our monetary policy jurisdictions, and it 's both sides of the ocean but also other countries as well.

That design of monetary policy may well have consequences on the exchange rate, but these will be indirect consequences.

It 's a fact of nature, so the issue is whether these other movements in the exchange rate which may be caused by the use of language that I said is not part of the terms of reference that been agreed recently, whether that has an effect on our inflation path.

One should not look at monthly purchases because they may reflect temporary market conditions.

Going back also to one question: where however we have to be careful is that when -- there may be differences about when to say certain things.

For example we can all agree about certain things, but we may disagree about when to move forward.

This is a standard position of the Governing Council, if I may say so Mr President, and of the Bank of Greece all these years.

You may remember we were a little bit challenged after our last monetary policy meeting.

From time to time, we give information that is a little bit different from what the market may have expected.

If I may judge the reaction of the market, which of course has to be seen in a much longer perspective, some reactions were relatively positive.

You may remember that some were saying" you are at 1.7%, you are very low, you are below 2% '', but we have to look forward and looking forward, we knew that we would have a hump.

On the TLTRO I just can give you a brief overview of what this operation is, keeping in mind there 's going to be a press briefing at four today for all the further technical details that you may be interested in.

And they may even get a reduction on that rate which increases with the amount of loans they grant.

Prima facie, it clearly involves complexities, both accounting-wise and legal-wise, for our view, but of course by this term" helicopter money '' one may mean many different things, and so we have to see that.

And then they may even get a reduction on that rate which increases with the amount of loans they grant.

I would only say may the best team win.

For central government bonds at investment grade level, which may be Greek bonds or the bonds of any other country, by definition, we have said that the system of haircuts after the end of the year will be in practise the same as the system that we have today.

So we may be more precise especially once the TLTROs, at least the first two TLTROs, have taken place.

Let me also add one thing, because the ABS may sound more, I would say novel, than they are in the ECB policy-making, and indeed, the modality is novel, because we would do outright purchases of ABS, but the ABS have been given as collateral for borrowing from the ECB for at least ten years, so the ECB knows very well how to price and how to treat the ABS that 's accepted, especially since we have, - and this is in a sense another dimension that makes any precise quantification difficult at this point in time - we have narrowly defined our outright purchase programme to simple and transparent ABS.

As you may know, in the Financial Stability Report that we have published we mentioned explicitly that this was a very important issue.

There are many reasons, and some of them may be more important than others -- it 's hard to say which is which -- but basically the reasons that are behind this are certain structural changes that have taken place, one of which is certainly the backward-looking negotiation of nominal wages, looking as a sort of reference of inflation, looking at low inflation rates as a basis for current negotiations.

It may well be that this is actually slowing the growth of nominal wages as well.

I do not want to go into too much detail because I spoke about that a year ago, as you may recall.

There may be a gap, but I frankly do n't know how much that is and we will know more in the Eurogroup.

In the context of LTROs, maturities may extend to three years, of course, but in normal operations maturities like the ones we are operating on right now can go from six months to nine months to a year.

It says:"... may undertake outright open market operations of a size adequate to reach its objective.

At that point, we may act, if needed, along the lines that I have illustrated today.

It says" may undertake ''.

It says:" the Governing Council may undertake outright open market operations of a size....

So the Governing Council, under the necessary and sufficient conditions and within the context of its total independence of monetary policy operations, may decide to do certain things if these conditions are satisfied.

The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective '', and so on and so forth.

On the negative deposit rates -- since many of you may be asking this question -- I will say only that for us these are largely unchartered waters.

`` The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy '' -- which means that to go to the EFSF is a necessary condition, but not a sufficient one, because the monetary policy is independent --" may undertake outright open market operations of a size adequate to reach its objective.

Still when you look forward, you certainly have countries where growth is more buoyant, countries where growth may be less buoyant and downward revisions may be more significant.

That may well be not because of external factors but because of endogenous facts that we have n't seen yet really.

The cumulative loss of competitiveness over several years is reflected in the widening of the current account deficit, which has reached very high levels as a percentage of GDP and may not be sustainable.

But the influence of these factors may decline over time, and were this to happen, the adverse effects of the external imbalances on activity and employment would be felt more.

About the emerging market countries, exchange rate effects on the euro area, we briefly touched on that in one specific context, when we say that the foreign demand is weaker for the euro area, and this may be due to the stronger exchange rate of the euro, we have to keep in mind that the depreciation of the Turkish lira actually accounts for much of that effect.

In other words, there may be global factors but we ca n't do anything about that, but we can do a lot about domestic factors.

So these accounting rules reinforce very much the treatment of new NPLs, so go in the same direction and can be meaningful, because indeed as I said, may lead to a full recognition of losses for the whole life of the asset so -- which means that the new rule also or the new target for the treatment of NPLs can be more or less already accommodated by what will be the imposition of the new accounting rules.

You may recall that we were in an environment in which a large number of analysts including international institutions and a significant proportion of the market literature were signalling that, according to their economic analysis, we were not fully justified to increase rates.

... may I answer this question first?

The sequence for M3 in the most recent period of time, you may recall, was 8.8% in May, 8.5% in June, 7.8% in July and now 8.2% in August.

And those who are in Paris today may also have a memory of that, and of all the declarations and analyses of the time.

Now, at the end of your question there was a concern as to how these developments - that is the increase in demand by non-residents - may affect monetary developments in the euro area.

But the bottom line of this is that there may be complexities.

You are also right when you say that, in spite of the changes in unit labour costs in some countries, we do not observe comparable changes in the GDP deflator, which may be due to other reasons.

As regards your second question, I will not comment on the spread, the indexed rates or the absence of them that we may decide.

You may remember we invited Chancellor Schmidt and President Giscard d'Estaing to speak about the birth of the ERM, the birth of the European Monetary System, which permitted, after a number of years, the creation of the euro area.

And here the channel through which this may happen is the following.

ELA is a decision of the National Central Bank of Greece, to which the Governing Council may decide to object with a very special and demanding majority requirement, if certain conditions are not in place.

But I would not exclude either the fact that we may go upward again because, as I said, you have a number of phenomena that are due to the profile of the oil prices twelve months ago.

Well, may be for the next round.

And all the members may elaborate on that, give explanations in their own words, but the message is the same.

And we also welcomed the commitment of the Irish authorities to take any further measures that may become appropriate to achieve the objectives of the programme.

These may or may not be listened to, but it is our strong duty to pass on what we see and what we think, given our responsibility and the angle from which we can view the situation.

We already took the decision, as you may remember, to have several successive three-month operations in that mode.

As you may remember, the important decisions were taken at the level of the ECOFIN Council on 2 December 2009.

As to the moves Mr. Tietmeyer may or will make, passively or actively, I will certainly not comment on this.

Well, it may have been said that the Bundesbank intervened, but I can say that the Bundesbank did not intervene.

So, I am sorry for not being able to answer, but what is important is that it is not as simple as it may look.

So, there you see once again, it is the same message, which may be interpreted differently in practice.

Indeed, we were, if I may immodestly say so, the first to diagnose that we had a real problem, and the first to take very important decisions, as early as 9 August 2007.

And I also have nothing to add to or change in terms of what I said a month ago -- and I quote this word for word -- that" we did not decide today that the new level of our policy rates was the lowest level that can never be crossed, whatever future circumstances may be ''.

And we are doing that in a, may I say, calm and unprejudiced manner.

And the implication that I think was derived from this reference to the smile is that there may exist some tensions between Mr. Issing and myself.

But I will not comment on any bold moves that may have been decided.

As I said, it may be another couple of months before we are there again, after the disturbance which was caused last year by the increase in oil prices and the depreciating tendency of the euro.

If I may say so, conceptually we are very close to the US in this respect.

This is not, if I may say, a scoop.

We consider it a very important matter, a very important question, and of course, we will continue to meditate -- if I may put it like that -- but it is not our own responsibility.

Several observations: one is that, as I have said many times, there are at least three sets of reasons why banks may not lend.

And, frankly, on the other part of your question and your colleague 's question, I would say that, at this point in time, we are not really elaborating on various non-standard situations in which we may find ourselves.

First of all, Arcelor and Mittal Steel are not in the services sector, if I may say so we will not discuss that at all.

I will not comment in any other fashion on what we in the Governing Council may do.

However, other measures, such as a negative rate on the deposit facility, which we also discussed and are now technically ready for, may, as I have said on numerous occasions, have several unintended consequences.

While one studies and explores ideas there will obviously be changes of views and your own view may change during the discussion.

There may be some local episodes of certain specific markets where prices are going up fast.

We are aware that there may -- by chance or accident -- be a few vending machines that may have been equipped to accept euro coins a little earlier than 1 January.

And that may be one of the causes -- the flexibility of the labour market is greater, mobility is greater -- that may be one of the causes for the euro, let me call it," failing '' to catch up with the dollar so far.

So the question that you may have about ANFA should be asked to the national central banks.

They were able to do so in what regards the shortfall for the baseline stress test and asset quality review, but not for the adverse scenario, and for that they will require some money, which will be public money, which may be invested into the banks in a proportion of 70% to 30%.

One is the repayment of the TLTRO ; another one is the demand for bank notes ; another one is the bonds purchased under the SMP programme that may come due.

So we counteract this reduction and we actually may do even more than offset these reductions, which means that the conditions for this liquidity will ensure that the bonds we purchased, and we are purchasing and will be purchasing, will stay on our balance sheet for a long time.

And if I may only add one element: we are there to deliver price stability.

This idea that the banking sector would be short of euro liquidity is not what we are seeing and certainly is not what we are engineering, if I may.

In my opinion, not just the euro area, but all advanced economies may have real problems if they are not reasoning in the medium to long term.

The reasoning is as simple as that: I have nothing else to add at this stage and I have no information regarding any message which may be addressed to us.

As I said, it 's very, very early to say anything like that, but also, let me give you an idea of what may come out in a certain amount of time from now.

This will give you good hints of what may come out ; it 's going to be mostly a qualitative process and based on several indicators.

You may remember when last year in December, I did mention the fact that in a zero lower-bound situation, where nominal interest rates are at lower bound, what determines real rates are movements in inflation expectations.

But the argument which we hear often is that structural reforms in the long run may produce some positive effect on output growth ; in the short run they actually do n't.

One of the reasons why this may not be entirely correct is that good sound structural reforms actually raise expected permanent income, expected permanent income and therefore have an effect immediately on consumption for firms for households and on investments for firms.

So Europe may have some responsibility, but these countries have their own responsibilities, their own policy problems which have still not been addressed and are still unresolved.

What we see is that this component now may have increased since our June announcement due to various factors, including the state of the debate on trade.

We would have to assess both the direct effects, which may be significant as the numbers significantly go up, and the indirect effects of confidence on -- especially on business investment.

There are certain conditions that would lead people to think there may be a bubble that we have seen before the crisis started, one of which is a serious, significant increase in leverage.

But the strategy as such has not been changed, and we have -- may I say with some self-confidence -- been satisfied with the outcome of our communication over the past few months.

By the way, I think, and that is my purely personal perception, that all of the countries that may need an OMT have now reached, after many years of a difficult, very difficult process, reasonable maturities, reasonable durations in their stock of public debt.

Having said that, work is now in progress: as you may all understand, it is potentially very important work and we will certainly contribute with all our skills and expertise to this work.

And we may have to go back to July/August when this credit contraction started, because, ahead of them, in the first quarter of this year, banks had a very serious funding situation.

Some other events may well not be foreseeable at the present time.

Now, on the other point, as you may imagine this question was asked at the time of the OMT, at the time of the London speech in 2012.

Now, given that the political situations in different countries are different, it may well happen that countries are not equally ready to move together towards working together.

Again, with the benefit of hindsight, we are now of the opinion that that period may have been on the long side.

We are, in fact, concerned - not about a certain level, but about certain developments which have occurred and about the fact that there may be fewer automatic stabilisers in that respect than may have existed in various financial centres before.

We are concerned, but may I ask Mr. Noyer to express our concern

I may want to remind you that when you hear outsiders talk about this, they also talk about it in the light of the upcoming G7 meeting of finance ministers and central bank governors, which is to take place on Saturday next week.

And I may add that the word" recession '' has not been used in today 's Governing Council discussion.

We feel that fiscal balances may fall behind the targets agreed by the ECOFIN Council, and, you know, there is monitoring of all countries according to the Stability and Growth Pact.

But there may be other points of view on this.

I understand the Vice-President may want to add something on the first question.

The third point is that with very low inflation or negative inflation, the real interest rate increases, and when the nominal rate can not go below zero it means that the interest rate in real terms may be above the equilibrium real interest rates that would equal savings to investment at the level of full employment.

And, as long as the ECB is there - may I say, as long as I am there - there will be no danger.

Well, the most important question, if I may call it that, is the first one, of course.

Well, if the current exchange rate is compared with the exchange rate for the euro over the period - let us say - two years before the euro came into existence, a period in which growth forecasts, unemployment figures and inflation figures were far - I do n't want to say" worse '' - less good than at present, then the fact that the exchange rate has clearly fallen below that level for some time now indicates to me that it may well be that the markets have overshot the level which would be appropriate for an economy which has such a strong growth potential, which is actually realising that potential, which will realise a healthy balance of payments surplus for the foreseeable future and which is realising a climate of price stability - in terms of price increases in the foreseeable future, i.e. over the next two years - which will remain below the ceiling we have defined as the limit for acceptable price movements, namely 2%.

It may take another decade before we can speak of one large European capital market.

First of all, I am not prepared to take any blame for the decline in the euro, although I realise that markets may do so.

I do not want to overemphasise the messages we may send, but I feel that they were part of the overall confidence rebuilding.

These movements are quite normal ; they may have something to do with government purchases of military equipment abroad or whatever things have to be paid.

As we had what the economists call" undershooting '' for a long period of time, we may now have" overshooting ''.

First of all, the issue of intervention was discussed only to the extent, if I may disclose something of the meeting, that I asked what should I answer if a journalist asked me" have there been interventions? ''

Over the past two weeks you may have seen that we have observed rates on ten-year government bonds in some countries of the euro area as low as 3%.

Second, it is the Governing Council 's opinion that a fixed term of office should also apply to the other members of the Banca d'Italia 's Directorate -LRB- the" Direttorio '' -RRB-, comprising the Director General and two Deputy Directors General, since they may be involved in the performance of ESCB-related tasks.

So there has been a dramatic change in global capital flows, whatever the details of the evaluations may be.

If I may add, it is more than that.

I know that the European Commission, as you may know yourself, is also examining the situation.

In the Governing Council we consider all of these 311 million people, just as the Federal Reserve in the United States takes simultaneous account of Massachusetts, Florida, Alaska and California, all of which may have very different situations, as they historically have had.

Now, as far as devaluation is concerned, may I repeat what I said: the euro is a currency which is firmly based on internal price stability and therefore has a clear potential for a stronger external value.

But, may I repeat what I have said before elsewhere in public: if this were to become a trend across Europe, then there would be a real reason for concern.

There may be a slight increase due to temporary factors which are, in particular, the rising energy prices that are working their way through to the price level.

But what you may expect at one time or another to have to attend an euro group meeting or whatever it is alone and be accepted there by the participants.

We can deal with an increased demand for liquidity that may arise.

And, having said that, you can also see that it is not related to the interest rate policy conducted, because the marginal lending facility works whatever the interest rate for this facility may be.

That may cause some -- let me call it --" bias '' in the judgement of the people, and I do hope that that effect will fade away sooner rather than later.

As far as the statement by President Welteke is concerned, I would like to remind you that he has declared that the Bundesbank may sell some of its gold stocks over the medium to long term.

The succession of Ms Hämäläinen and -- may I add -- of myself is not yet on the agenda.

And it is not sure to what extent the structural and cultural shock of the introduction of the euro may itself have changed behaviour and relationships of investors and consumers across the euro area.

All I want to say about the recent intervention in Germany - in the company market, may we call it like that - is that it does not enhance the image which we want to have of being an increasingly market-driven economy across the euro area.

As you may know, we do not have an exchange rate target.

On the one hand, the exchange rate is regarded as the outcome of the entire economic process and - may I add - the psychological process on both sides of the Atlantic.

There is a general resentment amongst the public, and it may be growing here and there, against the perceived inflation, which is clearly higher in the eyes of the public than the measured inflation, which encompasses a much larger basket of goods, when you measure it over time.

But that is indeed a very slow process that may take decades.

And, whatever I may say to the German Government, I would rather say to the German Government directly.

But we do, of course, have this Y2K effect which may cause some hickups in the development of the figures.

We are already, if I may say, a monetary federation.

And, there, two things may happen: the deposit facility goes up, which is what you would expect in the shortest run, and then gradually the required reserves deposited with the ECB go up, if you have a credit expansion by the banks in the euro area.

We will judge that when the time is ripe and the time may be a long time off.

The deleveraging process is not something that only banks may have to do in some countries, but it is also something that a bank 's clients may have to do.

Third, the banks may ask for an interest rate that is so high, that the SME has to say" thanks, but no thanks ''.

Second is that SMEs may be given an amount which is lower than the amount they asked for.

So, the monetary policy measures which can benefit some countries may not benefit others.

There are several unintended consequences that may stem from this measure.

Therefore, you may want to take action to mitigate the contractionary effects of this.

The only surprise that markets and media may have perceived is the timing.

In some countries, for example, it is foreseen that it may extend into the second quarter, but this at the same time does n't tell that the underlying strength is n't changed.

Certainly there is the collective intention of the Governing Council members to avoid any tightening of excess liquidity conditions or any unwanted tightening of monetary and financing conditions that may spur from the reinvestment.

It may well be that different views from before are being expressed.

It 's the effect of general confidence, that a round of measures and retaliations may produce on the world economy.

{'maybe (396)', 'perhaps (538)'}

On the inflation rate, your second question, this is an increasing - -- we should n't forget that 10, maybe 12, 13 years ago, a quite similar discussion was taking place, whether we should look at perhaps core inflation, perhaps headline inflation, and we decided to look at headline inflation as our objective.

{'maybe (396)', 'volatility (407)'}

What maybe surprises us is the higher degree of volatility that we observe in the markets, both in the foreign exchange markets and in the markets for financial assets.

The volatility of the exchange rate has maybe been a little bit more intensive than in the days before the war.

{'maybe (396)'}

And on the other measure -- an untargeted LTRO -- frankly, what you are observing now on the excess liquidity front is that we have moved from $ 800 billion a year-and-a-half ago -- maybe two years, well, a year-and-a-half ago -- to about $ 100 billion.

As regards inflation, as I said one, two, maybe even three months ago, we expect a hump in inflation in the months to come.

Maybe this time it was more like a" canon '' than" in unison '', but the sound was the same.

Maybe we should move to a six-month schedule rather than six-week schedule.

So the outlook for headline inflation over the next quarter or two quarters maybe is higher than it was foreseen in the previous macroeconomic projections.

Maybe Vítor has a longer memory?

But as I said, maybe the second quarter will produce a slightly lower figure.

At the same time, we have maybe not yet seen the following hard data confirming the soft data.

On your first question, I should have maybe added in the first place that our agreement also includes that the voting members should be the members of the Executive Board, of which there are 6, plus 15.

There has been confirmation of our view, and maybe even for a few more months, that inflation will be -- albeit temporarily -- persistently over the 2% limit, but that it will come down.

Well, if anything has changed, maybe it is the experience of working together with the Eurogroup, that is the 11 - now already 12 - Ministers of Finance, of engaging in a very constructive dialogue about all our policies, both monetary as well as economic and financial policies, once a month.

Maybe we can have the last three questions.

And, maybe later, it also means that it will end in the adoption of the euro as a currency for these countries.

Well, maybe you have already given the answer yourself.

And it is a process which will take if not decades, well, then maybe even longer.

Some of you, maybe, or other commentators have said so.

Just when I was entering this room, there was a statement by the Vice-President of the United States, which immediately caused the euro to lose a couple of hundredths of a percent, but then, maybe, there already is another statement which goes in the other direction.

Let me also add one other thing that 's maybe relevant in view of the impression: the Governing Council was unanimous in being committed to this line of communication.

As for your third question as to whether the sale of our interest income from foreign exchange has something to do with pressure from financial circles or finance ministers to start interventions, I should like to point out that I can not imagine that you can conclude that the fact that these pressures were there is something of the last few days or maybe the last week.

That I leave to the principle of subsidiarity, that is to say I leave it up to the national authorities to come to their own conclusions and maybe even to make these public.

Do you want to correct your article from this morning maybe?

On the last point, Klaus, maybe you would like to say a word?

Energy prices and the depreciation of the euro have advanced, but we do not really see any change in what has become our baseline scenario, namely of inflation standing at around 2% by the end of this year and maybe going below 2% next year or even before next year.

The ever-improving conditions of the labour market - we 'll maybe elaborate on that.

But you have also seen that enormous amounts of savings have been amassed, and are still being amassed by the oil-exporting countries, maybe not exactly quite as fast today as they were, but the increase is still very considerable, and obviously that is an additional element, when you try to compare savings and investment at world level.

On your first question, maybe you were n't listening to the translation or maybe you were listening to English directly.

In these three years we 've lowered interest rates I do n't know how many times, four or five times, six times maybe.

So I think the discussion was not so much about, certainly oil certainly, but about what the conditions need to be in place after say 2016 maybe in 2017 that would guarantee that the present cyclical recovery becomes a potential output growth recovery.

But certainly when you see two subsidiaries of the same company located in two different countries and paying completely different interest rates for their borrowing, when you see exactly the same individual borrower, say a young couple that wants to buy a flat, and paying a completely different interest rate on mortgages, then you start asking yourself, maybe there is a problem here.

I expect a proposal maybe in Oviedo or shortly thereafter.

But then it is maybe good to know that the Lamfalussy proposals were made explicitly for the securities industry.

In addition though, I do not deny that the two actions are, maybe you can say," consistent '' with each other.

{'might (766)', 'anticipate (153)'}

As regards what the United States might or might not ask, we will see when we participate in the meeting, but again, I do not want to anticipate in any respect what we will do, or what the British Presidency will do, I will only say that the present global consensus -- and it has been expressed several times before now -- is that we all have homework to do.

{'might (766)', 'assumption (263)', 'perhaps (538)'}

Again it is an assumption, and I draw your attention to the fact that I say this with extreme caution, but perhaps, after having being stolen, these notes, already impregnated with the first liquid, might have been attempted to be" cleaned '' by the robbers and that operation might have weakened these notes.

{'might (766)', 'believe (492)'}

We believe that it might have some effects, but they are not relevant.

{'might (766)', 'cautious (120)'}

I would be cautious - as you might understand - on the projections.

{'might (766)', 'differ (47)'}

You might say that, to tackle the major problem that Europe has, i.e. the high level of unemployment, given that it is caused only partially and to a minor extent by cyclical factors and to a major extent by insufficient flexibility in the markets for labour, goods and services, call urgently for precise measures that differ from country to country to increase the flexibility of the labour market and to increase the flexibility of the markets for goods and services, e.g. opening hours of shops, etc..

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.

{'might (766)', 'may (1031)'}

We may have tried to make some rough estimates - while the war is still going on - of what the cost might be.

Regarding the weakness in lending and whether the AQR may have increased this, one certainly might have some short-term deleveraging by the banking system in order to be prepared for the AQR.

So in certain circumstances labour market reforms might have priority ; in other circumstances, product market reforms may have priority.

To be quite honest, the teething problems, or birth pangs, or whatever you may want to call them, were rather smaller than we had thought at some moment that they might emerge.

It may happen that -- we are people -- so members might have problems.

{'might (766)', 'maybe (396)', 'anticipate (153)'}

To be seen to take effectively what was maybe an exceptional decision in exceptional circumstances, in bringing forward a rate cut that we had already contemplated before, applying it earlier than had been foreseen and making it larger -- within a matter of two hours, I might say -- and also earlier than anticipated, this in response to the assessment that the horrible events in the United States might have a negative impact on economic growth and thereby also cause the inflation rate to come down more strongly and sooner than earlier anticipated.

{'might (766)', 'maybe (396)', 'may (1031)'}

Maybe in the perverse minds of some market players might -- this may be true, but certainly not in the Governing Council members ' minds.

{'might (766)', 'maybe (396)'}

I personally happen to think that in Europe we will see more definite signs already in the first half of this year, maybe towards the end of the first half of this year, but in any other respect, we have not changed our assessment for a gradual recovery which might take -- and now I am talking for Europe only -- the growth rate in the last part of this year up to the potential growth rate at an annualised rate.

{'might (766)', 'perhaps (538)', 'believe (492)'}

I know that it might be a little bit boring for you when you hear us repeating ourselves but it is perhaps better to repeat when you really believe that it is important.

{'might (766)', 'perhaps (538)'}

I know that, for instance in German, or perhaps in Dutch or in other languages, it might mean an augmentation of the size of each decision, but it is not that meaning that we have in mind, it is the regular English meaning.

At that time, there were so many voices speaking on interest rates, not inside the Governing Council but outside of it, that perhaps some of you might have had trouble understanding exactly what was happening, and I thought that it was appropriate to provide this information.

I was wondering if perhaps it indirectly meant that in his own constituency from time to time verbal discipline might be appropriate.

That might surprise some observers -- perhaps it is not exactly the way they see it.

I can only tell you that, as regards the duration of those bonds -- and I wo n't pre-commit, because we will have to optimise these operations, taking into account the market situation and the various constraints that we might have -- we might perhaps concentrate on the medium to longer term, say, three to ten years.

And again, I will not underwrite any figures, but I would say that if you said in the present situation that perhaps 2% might be an order of magnitude it would not necessarily be absurd.

{'might (766)', 'probability (40)'}

This is true even when we say that we are in a mode of" strong vigilance '', which has significance in terms of the probability of what might happen.

{'might (766)', 'probably (249)'}

As you might have seen in the diagnosis that I read a moment ago, we mention consumption and consumer confidence and we mention a number of elements that might explain why it is not as robust and dynamic as would probably be the case if we had a recovery which were less gradual.

At this stage, on behalf of the Governing Council, I would say that I stick to what we had already said, with the sentiment that at around 2.25% we probably are in an area which might be pertinent.

The reasoning might go" Bad fourth quarter last year, ahah, they will probably cool down their interest rate increases ; good news, of course they will accelerate. ''

{'might (766)', 'risk (3278)', 'volatility (407)'}

The issue is disputed, you have several schools, but there is a broad agreement that this under-appreciation of risks can not last forever, and that we have to pave the way for an orderly adjustment of this situation at the global level, which might explain why real rates are low, spreads are low, insurance premia are low, volatility is relatively low, all this in historical terms, of course.

We were at the maximum level of provisioning, so we thought it was time to increase the capital in order to enable us to continue to make the appropriate provisioning in view of the increased volatility of foreign exchange rates, the interest rate risk that we - and all central banks of the world - have, the increased volatility of the gold price and all kinds of risks, including credit risk, that we might have.

{'might (766)', 'risk (3278)'}

There are a number of other elements which are incorporated in the bond market evolution including a number of risk premia that might be very low in the present period for a number of reasons.

But on the other hand, you have an activity which might be more buoyant and that of course entails risks for inflation.

It is in the analysis of risks that we say that we might have to cope with a pass-through which is stronger than previously expected.

On top of that, of course, you might have the spreads I have mentioned, the different assessments of risks that are generally quite low at a global level.

And it is there that you might have the under-pricing of risks I mentioned.

Our message applies to absolutely all countries, but in particular to those countries where we think that there might be a risk of the commitments undertaken not being respected ; in particular the Berlin commitment, which I mentioned in the introductory remarks, and the full implementation of the Stability and Growth Pact with a number of provisions that we will certainly insist on.

And that is why we acted and that is why we -- as I said before -- are very aware of the downside risk that a too low rate of inflation for a protracted period of time might have and that is why we stand ready to act.

So, yes, there is a message there that the risks in that area might be on the upside and, as you know, once the risks have materialised, it is too late.

As you might imagine, we reflected very thoroughly on the situation, on the multi-dimensional nature of the situation as regards the real economy, and as I have already said, the Governing Council changed its judgement and assessment on the qualification of the balance of risks.

We are closely monitoring these risks ; we are aware that these risks might be there.

I have also mentioned the risks for the real economy that are mainly stemming from external observations that we might have on the side of the global real economy and I have mentioned in particular protectionism.

I said that incoming data that we had, even if mixed in some domains -- we had data that were more positive than expected by economists, including the Ifo institute for instance, or data as regards industrial production that on a month to month basis might be better than expected -- but if I take all the data and all the surveys that have been made, I would say that they confirm that risks lie on the downside.

In answer to your first question it is certainly not out of the question that the balance of risks might be different.

And so you might also say that as far as monetary developments are concerned, with our policy of gradually increasing interest rates, which began in November 1999 and the last move of which was made in October 2000, we have achieved what we wanted to achieve, namely moderation in monetary growth and hence the disappearance of inflationary risks over the medium term.

In any case, when there are risks to price stability which would threaten our delivery of price stability, even if we are not accommodative at all we might increase rates, and if we are accommodative we might not increase rates, because, again, what we have to do is to deliver price stability and be absolutely credible in the delivery of price stability.

Now, taking into account all the new elements that have been observed in this recent period, I would say that we also need to reflect on the so-called conduits and so-called special vehicles, which are also non-regulated entities that might prove to be the source of risks.

{'might (766)', 'seem (653)', 'perhaps (538)'}

I should also mention that, at the very moment I am speaking, it seems that the impact of the VAT increase in Germany might be of the order of magnitude -- at the level of the euro area -- of perhaps 0.4%.

{'might (766)', 'seem (653)'}

It is true to say - amazingly, I must say, basically, also for the US authorities - that the US economy seems to be continuing to grow at a pace which - we thought earlier - might be similar to that in Europe.

It seems to me that it is something like that he might have had in mind.

{'might (766)'}

The main reason to commit to sterilisation, by my predecessor first and by myself later, was based on the effects, on the potential effects that this additional liquidity might have on inflation.

We are concerned that the current negative environment might reduce the impetus in various countries to reach the goals to which they have agreed in the context of the Stability and Growth Pact.

We might even see more of this were we to have fewer press conferences.

So we might not observe on this side of the Atlantic the same kind of developments that are observed on the other side.

This might be one of the additional reasons why we are observing such hectic behaviour on commodities markets.

The question of supply is therefore an open question which is also extremely important and might have been more important in the recent period, marked by the spike in oil prices.

Many colleagues might make remarks that are very useful, very interesting and stimulating, and also very adapted to the environment in which they find themselves.

But this might or might not happen.

The twin deficit has emerged, I might say, and we do hope that the inevitable adjustment which has to take place, and which will take place over time, will occur in an orderly and gradual manner.

All the reasons indicated, I might say, to still wait a while.

In the euro area -- and it is the euro area as a whole that we have to look at -- we have signs that credit dynamism, might foster asset price increases in the real estate sector.

We do n't discuss policy measures for the effect they might have on the exchange rate ; that is going to be determined by the marketplace.

Our analysis is exactly the same as before, and you should not over-interpret any changes that you might have noticed.

On your third question, which was on the wage and salary negotiations in particular, again, you might have noted that when we are speaking, on behalf of the Governing Council, of wages and salary increases, we also mention the price-setting issue.

And we are not making any difference between this particular price, which is wages and salaries, and the other prices, where we might judge that there is not sufficient competition between the firms and where some price-setting is abnormal.

The first feasible date after that decision of mid-October is -- and this is simply bureaucracy, you might say -- not the day after, but two weeks later on 1 November.

What we had decided, you might remember, was to broaden our corridor in order to help, on the basis of the analysis made, revive the money market.

Together with the institutions of the European Communities and the Member States, we attach great importance to the protection of the Communities ' as well as the ECB 's financial interests and to efforts to combat fraud and other illegal activities that might be detrimental to the Communities ' as well as to the ECB 's financial interests.

I might add that deviously they have also set a date for my regular hearing on 10 September.

And so, you might imagine that you have solved the problem for your first year, but then with your second, your third, your fourth, etc., you have the same problem without the means to solve it.

So, this might explain what we have observed.

We might have, from time to time, higher levels of inflation.

We might have, at other moments, very low levels of inflation.

It is this set of tensions that you might regard as a crisis.

I do not want to comment on slight changes that we might observe when we extract information from markets as it is not really pertinent.

I will not elaborate on whether or not it announces anything else, you might ask the Governor of the Bank of China and the Chinese authorities.

If you are not credible in delivering price stability and inflationary expectations increase, then you might see a generalisation of those second-round effects.

As regards Slovakia, we do not have a position of the Governing Council on Slovakia and I do not want to comment on question marks that one might have, which are fully legitimate.

You might say I hear but I do not listen.

And you might remember that this growth -- which has been observed for the first quarter -- has exceeded expectations.

On other sides, for example the PMI, you might have observed that the recent indication on the industry side -- and the most recent indication today on the services side -- have been quite encouraging, signalling that a recovery is under way.

I fully understand their fear that an ever-stronger yen might jeopardise the early signs of recovery which are emerging in Japan.

Only if the euro were thought to be seriously out of line, in view of the fundamental factors, vis-à-vis other countries, might there be a need for a desirability of intervention, but I would not put a timeframe on it.

You might remember what you were asking for in your questions here only a few months ago?

You might remember that Jürgen Stark also went to Athens with Commissioner Olli Rehn to follow what was going on in terms of the recovery programme.

In the United States it is about one tenth of that, so you might be surprised when you compare the figures, but they are not comparable.

We will therefore have to think about this again, and it might be appropriate to draw lessons in transparency from what we are observing now.

As you might remember, we were the first central bank in the world to identify that we were entering a turbulent episode of the first magnitude and that we had to be active and expeditious in decision-making in those circumstances.

This is something which is complex, which might incorporate elements such as increased drawing on previously agreed credit lines, a number of phenomena relating to decisions already taken, or the use of loans to replace securities, which are enormously difficult to issue now because of the illiquidity of a number of markets.

I will not comment on any particular meaning that the last sentence might have but it has no other meaning besides what it says:" the Governing Council will monitor very closely all developments ''.

And that explains the fact that for the full year we might have this revision up, which is not totally negligible, because it is plus 0.2%.

As you might have observed, there was no pre-announcement of any interest rate increases in the past when we took the same technical decisions for other durations.

As regards your first question on the money markets, as you might have seen, we have taken a set of measures today.

You might have seen that I am not the only central banker who is a member of the Group of Thirty.

But we also see no signs in these countries that this development might" degenerate '', so to say, in the direction of deflation.

And as regards my own position, you might remember that last time, and even two months ago, I said in response to a question like yours that" I am not optimistic, I am not pessimistic, I am realistic ''.

There are two messages: first we did not decide today ex ante on a series of monthly increases, as other central banks might have done ; at the same time, we stand ready to do whatever is necessary and appropriate to ensure price stability and anchor inflationary expectations and to continue to contribute, through that anchoring of inflationary expectations, to a favourable financial environment.

Now, when oil prices are lower because of demand effects, then we have to consider also the negative impact that lower growth in emerging market economies might have on the growth of the euro area.

I think you have all the parameters in your hands to judge the length of time and especially to judge when the language on forward guidance might be changed.

If I might use our own vocabulary, it is part of our" enhanced credit support '' operations.

So, even after recovery has begun and positive growth has returned, we might have to cope with an increase in unemployment.

And you might remember that the President of the Commission of the time was saying that it was a stupid pact.

And you might also remember that several Heads of State and Government of the time, in particular the Chancellor of Germany and the President of the French Republic, were calling for it to be scrapped.

It helps us also very much to weather periods in which, on the contrary, there might be downward pressure on inflation.

However, stock prices went up all over, and in other countries, such as the United States, this might have to do with the increased prospects of a recovery.

And to use a word which I have used in the past, namely" contagion '' -- by the way, I saw it was misinterpreted, I meant contagion between financial markets, and not positive contagion from the financial markets to the real economy where I have been always careful in explaining that it is actually lagging -- you have seen, certainly, that the contagion to other countries has been muted this time, contrary to what might have happened about a year and a half ago, and this is another positive sign.

I think that, very theoretically, maximum bid rates can only work in a situation where there are strong expectations that the central bank might wish to cut rates.

And these are the monetary indicators: the forecasts made by others, the development of the exchange rates up until two weeks ago, the development of oil prices - there has been some decline, but an immediate rebound after that - all make us increasingly concerned that, over the medium term, inflation might - if we did not act decisively - exceed the 2% limit which we have set for ourselves.

So, whatever difference there might be between the average rate of a tender, the marginal rate and the minimum rate, it should be considered in exactly the same way as you would consider the difference between overnight or one-week/two-week rates, as compared with the fixed tender rate.

Now in the case of Turkey it 's very likely that all these events might affect the confidence, but it 's very difficult to foresee significant impact on the eurozone recovery, at least in the immediate future.

As regards the position of the Governing Council on the Italian case, I am not speaking of the position of any particular Member of the Governing Council, including a few that might have expressed themselves.

So, in our own judgement there is no contradiction between being faithful to our mandate and supplying Europe what it might need in terms of growth and job creation.

We might have some indications that were obviously less flattering on the consumption side.

You might remember that we increased rates against a lot of recommendations.

We were called on to say and to promise the market that we would not move for a" considerable period of time '' -- you might remember that -- by a variety of economists, by a variety of good advisers.

We need two weeks per month for our work to be performed properly, but we thought that it might inspire some calm in the markets if we made it known that a discussion in the media and the markets on the monetary policy stance will only take place once a month.

If we get advice from all sides, especially political sides, to take certain measures, then one might be tempted to become stubborn.

And you might have seen that this sentiment is completely and publicly shared by the Commission.

I might add that the start of production yesterday was a total success in all printing works.

I would say only that we are observing at least three factors that might explain this stickiness.

The third element might be indirect taxation in a number of European economies.

But then, as I did in my Introductory Statement, I paid considerable attention to monetary developments and I extensively explained why we do not consider the very dynamic monetary developments -- as we see them -- as a threat that inflation might again be on its way up.

So you might say I explained that danger away with well-reasoned arguments.

You might say that we have achieved price stability by now.

So I do not want to comment on one particular prior indication that the fourth quarter in one particular country might have been different from what was expected.

And, whenever we come to the publication of forecasts, we do want to supplement it with, you might say, an educational explanation of what forecasts mean and what they can be used for, making clear that they are certainly not the only determinant underlying certain decisions to be taken.

When you look closely at what the term coordination implies, strict coordination might imply that one authority, one central bank takes a decision which might not be what that authority would have taken if there were no coordination.

But Mr Rajan is such a good economist and such an excellent central banker that he might have very interesting ideas about this issue and I am looking forward to discussing them with him at the next G20.

The second cause might be weak demand and high unemployment.

You might also have noted that I said that we continue to be on the accommodative side and that interest rates are moderate.

And that might explain in particular why we have such a low level of long-term rates on both sides of the Atlantic and everywhere in the world.

What we were sure of is that, whatever the so-called neutral or balanced rate might be, the level of 2.5% prevailing until today was below it.

We want to calm down markets and market expectations without saying anything about whether and when a next step might be necessary.

And if you now expand the Governing Council by at least ten members, and in the Nice Treaty it is counted on that there might be 12 extra members, which would then be 27, plus six of the Executive Board, which makes 33.

We are continuously in touch, you might say.

And I do not know what will happen in the forthcoming days, I am not talking in terms of a compromise, but if there are ways to extract certain definitive and well-defined commitments from the governments concerned, that might replace the early warning.

For that reason, Sveriges Riksbank has to have adequate capital and reserves to absorb all shocks that any central bank might face.

Also to be taken into account is the fact that, at the global level, what we see is that the slowdown in the United States is partially or might be partially offset by continuous robust growth in a large part of the rest of the world, which creates an overall environment which remains quite dynamic, seen from the euro area standpoint.

The Bundesbank published at 12.30 p.m. today a communiqué which explains what the Bundesbank and the Eurosystem understands about what might have happened.

It is clear that there are lagged effects in this domain and even when the economy picks up unemployment might continue to grow.

It is therefore not entirely satisfactory to be the prisoner of methodologies that might change significantly past estimates.

I think I will come back to this if I have questions on inflation, but that 's a significant statement on how the exchange rate might influence our price stability objective.

And, as your colleague had already concluded from the Monthly Bulletin, there might have been some slight change in tone that was confirmed today in my statement, and we will monitor the developments in the months to come very carefully.

I do not deny that we might have influence when we meet in the various" Gs '', including in the G20 and in the international meetings.

That is the way we operate and you have a clear demonstration today of the separation principle because we are maintaining the non-standard measures as they were in the first quarter and, at the same time, we indicate that we might change the standard measures.

I do n't know what the others might say.

I might have given the wrong impression.

And in fact, we 'll now try to see which central banks are going to be ready, in how long a time, and adapt the framework that we have today, which has been geared and prepared only for outside managers, to include national central banks that might be ready and willing to do it.

If you remember the situation at that time, you might imagine that to some extent we have to take into account the period in question.

First of all -LRB- these are numbers that I might have given you in the past -RRB-: the default rate for all structured finance in Europe between 2007 and 2013 was 1.5%, compared with 18.4% in the United States, because the United States obviously had the sub-prime.

And we were right not to declare victory, you might remember, because we then saw that the growth of the last quarter of last year and the first quarter of this year were very modest.

All elements have to be taken into account and, as you know, at any time there might be changes.

So, that is an indication that you might have, and I will not comment on any particular provisioning of commercial banks.

So, I am still not concerned, but have seen with some appreciation, I might even use this term, the recent appreciation of the euro.

In the future, it might lead to a re-arrangement of priorities within budgets.

There might be some communication phenomena, translation, a number of interpretations -- in my opinion, very much over-interpretation.

Secondly, we had, as you might remember, explicitly sent a clear message to a number of currencies of emerging Asian markets including the Chinese currency.

The answer to your first question is that we did say on a variety of other occasions that we will be reacting to any unwanted or unwarranted tightening of financial conditions that might affect our medium-term outlook for price stability.

But it 's entirely -- well, it 's not entirely in our hands ; it 's also in our hands, the opportunity, the capacity, the ability, the might to transform this development into an opportunity for future growth of Europe.

There are NPLs of different kinds, and each of them might have a number.

As you know well, what you observe in Germany in the real estate market is not what you might observe in other countries such as Spain or anywhere else in Europe.

Of course, as I said in my introduction, we will closely monitor, and keep monitoring, the exchange rate developments, also with a view to their impact on, or the impact they might have on prices, particularly through import prices.

China 's situation might not be so clear: there are some new developments.

I have already said that: you might remember that a month ago I used -- if I am not mistaken -- the word" stickiness ''.

Everybody knows what our benchmark is ; we give and display our definition of price stability ; everybody can see what the various data are that we might have in mind ; and it is absolutely clear that we take our own decisions on the basis of our own responsibilities.

It might be helpful for governments to have a number of technical analyses in looking at their own fiscal stances.

So this decision certainly prevented a potentially major funding constraint for our banking system, with all the negative consequences this might have had on the credit side.

But it is also equally important to be pretty conscious that we might also have in front of us very difficult challenges, and we have to be alert.

I say that of course this might be time for a celebration and congratulations.

As you might have seen, we have a view of looking at what happens in this shorter part of the very short yield curve.

The cause might also have been some times in the central banking system, but mainly in commercial banks.

I know that the de Larosière Commission might also examine the issue.

We think that what we are observing as regards labour productivity might be linked to the cycle, and we are looking at it very carefully because it is a very important parameter for us of course.

And, as you know, the conditionality that might be imposed by the peers might even involve sanctions, which is something that is extremely strong and the best illustration of the fact that we share a common destiny in the euro area.

That might explain the dynamism of the loans.

We might have other explanations.

You might remember that we had indicated that we were in a mode of strong vigilance in Athens and I remember that all of you noted that the sentiment of the Governing Council was different in Athens in comparison with what it had been a month before.

I guess that the reaction of some people might have been the result of being impressed by some very good figures that we had for Germany.

We do not want to signal very subtle messages for you to prejudge what we might do.

So I will not mention any particular instrument that we might have discussed.

You might remember the first settlement week we had to withdraw liquidity at a level of $ 16.5 billion, the second settlement week $ 10 billion, the third $ 8.5 billion and then we went down to $ 5.5 billion.

You know the figures, and I have to say that part of the sentiment which is a little bit better might come from these facts that I have just mentioned.

That is very important and very impressive, and it shows the extent to which things might change quite rapidly in the present functioning and development of the European economy.

You might have heard what Jens Weidmann said recently about the IMF forecast for Germany.

They might be politically difficult in our democracies.

Nobody knows what might happen in the near future.

And I think one of the signs might be that right now we have the highest inflation rate in the euro area.

It has not been thought about and it is not being discussed, not only because we are proud of our own independence, but also because they might not even want to know.

So it is not really a reaction to a specific thing that as you said might have terrified us because we usually do not act on terror but on normal, cool analysis of facts.

I 'm sorry, both questions might be in principle very interesting questions but we have n't discussed that.

We might see a number of judgements on what we are doing here and there.

In the meantime, today Mr Solbes got from the Governing Council of the ECB all the support he might need for his further endeavours, he being the guardian of the Stability and Growth Pact.

But that is not necessarily a negative thing in itself, because when banks set their pricing for their credits they look at what their other investment opportunities are, to the extent that they might invest in government bonds.

Not only that but it was actually considered to be totally marginal and in fact there were many sort of wrong estimates of what these potential reinvestments might be.

As regards your second question on the monetary aggregates, I confirm that M1 remains quite dynamic, as you might have noted, even if the rate of growth, which is in double figures, is a little bit lower than before.

And then we have what I might call modest but favourable developments in terms of the anchoring of inflation expectations.

That might be part of the explanation for the whole development.

We are in the happy position where the Eurosystem as such holds so much foreign currency reserves that it will at all times be equipped to meet any disaster which might loom on the horizon.

And the holdings place no constraint on whatever action we might want to take.

But then you have a third effect, which might happen if the lower prices get embedded in a lower wages formation process.

It might very well be, in a large majority of cases, that these are not the same institutions.

You might remember it 's the additional long-term refinancing that we had decided on last year that were of the level of $ 60 billion each and we are renewing those operations.

It might be that a significant number of institutions are themselves without any liquidity needs, are not asking for liquidity to the central bank and for a variety of reasons are replacing their own excess of liquidity in the deposit facility.

This has to do with my answer to your point about the supervisory mechanism and who might chair it.

I think it is important that we take up our own responsibilities, and that all observers see us doing so, and that we do n't hesitate to do things that we might not necessarily have done before.

We might very well be below 2 in one month 's time.

We might have to do this or that in the future, but I do not confirm anything.

You might remember that we mentioned Ireland in our last introductory statement.

It is a way to correct what might otherwise significantly hamper growth.

And I have to say, in this respect, you might see that in the introductory statement of the Governing Council, there is this recommendation for the financial sector in particular to accelerate the strengthening of the capital bases of the banks and also to utilise more fully the decisions that have already been taken as regards recapitalisation in particular.

We saw the EONIA decline again in the most recent period, and there might be a number of other reasons for this, given that we are at the end of the maintenance period.

But what we do consider is that this deregulation, liberalisation and increasing competition in itself might be a process which is rather long-term in character - because it is ongoing.

So any conclusion you might want to draw already today is certainly premature.

I would even be bold enough to say that, when I participated in the various" Gs '', including the G7 in Washington, I had the sentiment that all parties concerned were speaking for real when they said that they would do their best to implement what I call their" homework '', all partners including us, even if our contribution might not be very large.

And, in the case of the national economy, i.e. the largest economy in the euro area that you have mentioned, it is clear that the main drivers of growth are -- at the moment, but that might change and I trust that it will change -- exports, net exports, and investment.

We are all reflecting, not only in Europe but also at the global level, on the different behaviours that we have observed from the employment angle in various countries, to understand better what dynamics are at stake and what might explain those differences.

A number of us might have a very vivid memory of that.

We do not see signs that the very gradual slowdown of M3 in the direction of the reference value might be interrupted in the near future.

Of course, we will have new projections, as you might expect.

As a matter of fact when we increased rates in December you might remember that we did not have good news, because we had the immediate data relating to the last month of last year, which were not good.

We have not come to the conclusion that it might be so significant as to warrant any emergency measures.

They were due to be submitted before the end of January and this was done in practically all cases, as you might know.

The Luxemburg central bank was indemnified for Icelandic banks when, you 'll remember there was that crisis, on a full risk-sharing, and we raised the buffers on a full risk-sharing for some potential losses that Germany, the Bundesbank, might have after the Lehman crisis.

You might as well have asked, what is sustained adjustment?

As I just said, it would be a big mistake if countries were to consider that the presence of this programme might be an incentive to fiscal expansion.

Even though this might not yet be part of a regular extended programme for a long period of time, I think that this success should be properly celebrated, and it is a testament to the determination of the Irish government and the capacity of the Irish people to understand and" own '' this programme and make the needed sacrifices.

On the second point, it is difficult to foresee how banks might behave.

Banks might have an incentive to return what they had in the deposit facility earlier if they were sure that, for most scenarios, they would not need that liquidity any time soon.

You might also have the reverse phenomenon: The phenomenon where you are accumulating a very low level of unit labour cost and then after a long period of accumulation, of" over-competitiveness '' you are losing this" over-competitiveness ''.

Tomorrow and the day after tomorrow, we might contemplate going further.

And events are still rapidly developing and we have to be very careful in using any room which there might be.

To them, and only for the part of the consumption which might be hampered by this sentiment, to them we say: we are there to be the good guardian of the currency.

Of course, from time to time, for reasons that I can explain to myself very well, you might have an amplification of one sentence and the reverse attitude for other sentences.

This might explain why Germany, whilst making a lot of progress in its cost competitiveness position, is still registering unsatisfactory domestic demand.

We will see exactly what might happen.

I can therefore understand that, seen from outside, from market places that have no experience of it, there might be fears, but they are unjustified.

On the general remark that fiscal soundness in difficult circumstances might be counterproductive, I would say that it has to be analysed very carefully according to each particular situation.

That might have been the case in the past, but I do n't see it today.

We would have to see, what sort of scarcity, where, who 's actually scarce of these bonds, but so far, frankly, we do n't have any evidence that this might happen in the future, but it 's always good to ask difficult questions.

So I would say, as I said before on the occasion of a different question, it 's very early to have full visibility on the economic consequences of this phenomenon, and even more so to know what impact this might have on our monetary policy decisions.

You remember that originally we said that by the end of this year we go below 2%, then we said it is going to go below 2% in the next year -- now we have the first hints that this shifting might actually stop.

I can not forecast when another move will come, or in what direction it might be.

Nuances might have been different but I do n't think -- and in any event, I am not able to compare the degree of consensus today with the degree of consensus last time.

The size of the increase - I do not know how you want to qualify it - but you should not see it as a bias in any direction you might think of.

Again, we were unanimous today, as we were unanimous, as you might remember when we increased rates in our last meeting.

On your second question, as you might have seen in the introductory statement, there was a very rich discussion about all monetary policy instruments that might be used if warranted.

Of course, any very large surprise in a very large economy might have the potential to affect confidence worldwide, and then we would have to see in which way and how to cope with that.

They will look at all the options that might be used to redesign the programme under the new constellation of interest rates, and then we will have, of course, a discussion in the Governing Council about issues like the one you mention and others as well.

So we should keep this in mind because this in a sense answers all the questions that one might have.

It is so, after taking into account a great amount of input, including the fact that for this year, as you might remember, the first quarter was better than expected and the second quarter was, in some cases, also a little better.

But you might remember that this was more or less questioned by a number of observers, which would have recommended doing this and that on the basis of a judgement which was less optimistic.

I think that this is the main indication that something might reverse.

And this is a little bit different from the previous language, you might remember, in the previous Governing Council meeting.

This has been disputed a little bit, you might remember, in August, after the 9th and 10th of August.

All that we can do about this is to give statements, as we have done today, whatever the repercussions in the political arena might be.

We have started working on that in case we might consider it necessary -- of which we are not yet sure.

So, from that you might derive that we are indeed not inclined to try to fine-tune the economy with monetary policy, or to give fine-tuning answers to short-term developments.

In that case, we can, through the banks and directly, handle any increased demand for liquidity that might arise.

It 's creeping and it remains creeping - but at snail 's pace, you might say.

So we are distinctly, I might confirm this, more optimistic now on the outlook of the development of the real economy, both for this year and for next year, than we were three months ago.

Well, the message you might want to repeat is what I said in my Introductory Statement, namely to continue on the road to increasing flexibility in the labour, product and service markets, to take measures especially in a period when the economy and the economic outlook are brighter than we had foreseen earlier.

And I might add that this was deliberate.

There might be a shock, at least in the statistical series, and we must, of course, be prepared to deal with it.

One of the reasons was that there might have been a special shock related to the introduction of the euro.

I might say that I am equally worried about the inflation prospects as I am about the output prospects.

That might - but it will take time for it to materialise - lead to a smaller growth of M3 in the future.

Yes, I think so - to continue to pursue a policy that is oriented to price stability in the euro area, and with success, I might say.

As regards your second question on the monetary policy stance, you know that it is not customary at all for me to comment on what the market might or might not think.

What might the motives be?

I will certainly not embark on disentangling the various factors that might have played a role.

You might have seen what the market literature was saying.

When the Maastricht Treaty was negotiated, you might remember that several countries were calling for simultaneous advances in terms of political union.

First of all, you might have seen that we have embarked on an exercise of concision, because we had observed that, after a certain period of time, the ` literary exercise ' of the Introductory Statement resulted in longer texts.

Well, such exceptional circumstances have not arisen and, therefore, you might justifiably conclude that both the initiative for the interventions and the action itself were fully in the hands of the Governing Council of the ECB.

You are absolutely right to say that, when looking at the counterparts of the monetary aggregate and, in particular, when looking at the external counterpart, we can see that there is room for further work to gain a better understanding of what might have happened in this respect.

First of all, you might remember that Greece benefited from extraordinary aid from the other countries and is already activating extraordinary aid.

By mentioning the Governing Council 's posture of strong vigilance, I would say that, as you already know, it means that we are in a mode where there might be an increase in rates at the next meeting, but we are never pre-committed.

{'nearly (7)'}

The last time I was here, I reported that credit to the private sector was growing at an annual rate of nearly 10% ; the latest figure we have now is that it has come down to a rate of slightly over 9%.

I think that 's the main difference between now and then, so I do n't think the situation is nearly as bad as it was.

{'pend (3)'}

The final assessment of the European Ombudsman is still pending.

Now, of course the second question I will not answer given what 's been said at the beginning ; that I am not taking questions on a court case that 's pending.

{'perhaps (538)', 'believe (492)'}

I believe that the trend would go in the right direction at the level of Ireland but perhaps John would like to say a word on that.

We believe that perhaps perceived inflation or the absence of sufficient confidence in price stability play a dampening role in this respect.

We believe that, taking everything into account -- the situation of the market in some respects, perhaps the nervousness of the market -- the measures that we took today were exactly the right compromise between the various constraints that we have.

{'perhaps (538)', 'cautious (120)'}

On a shorter-term basis, namely for next year for instance, there is also quite a large sentiment -- but, again, I am very cautious -- that perhaps we are just below 2%.

We expect, but again we are cautious, that this phenomenon will continue and perhaps accelerate in line with what I have said and, in particular, with the earnings, improved earnings, and improved profitability of a number of private institutions in the private sector.

So we trust that perhaps -- I say perhaps, I am cautious, I am prudent -- our monetary policy concept is well-suited to this particular responsibility that is part of the overall BIS remark.

So, I see perhaps a tendency, not on our part -- because we remain very cautious and very prudent -- but outside the euro area, to be first excessively pessimistic about us, and to see that the figures we have do not confirm this pessimism.

{'perhaps (538)', 'confuse (24)'}

Perhaps the paper in question was confusing the person with the difficulty of his job.

{'perhaps (538)', 'may (1031)', 'possibility (303)'}

I do n't exclude that possibility at all ; we may even be lower, perhaps.

{'perhaps (538)', 'may (1031)'}

May I interrupt you - perhaps the answer may prevent your second question.

What ministers can do, and may do at some point, perhaps, is to give general orientations.

So, there is an arithmetic carry-over that may explain perhaps two-thirds of the disappointing outcome of the new projections in comparison with that of the December projections.

I would add, however, that in some cases perhaps other factors are discouraging the use of government guarantees by banks, and this may have to do either with the pricing of the guarantees on long-term debt or with some specific factors that are discouraging their use.

And our judgement is that confidence is perhaps the most important ingredient at the present juncture, if I may say so.

{'perhaps (538)', 'probability (40)'}

In the present case, it is perhaps a slight correction, because the market, if I am not misled, is pricing in a 100% probability that in June at the latest we will move rates.

{'perhaps (538)', 'probably (249)', 'cautious (120)'}

When I take the analysis of the OECD, the IMF, the Commission, our own analysis, the private-sector analysis and so forth, I would say, as regards the medium and long-term growth potential, that the previous appreciation was that it was between 2% and 2.5%, and now there is probably a sentiment -- again, I am cautious as you see -- that we are closer to 2%: 2% plus something which is meagre, 2.1%, 2.2% perhaps ; but closer to 2% than 2.5%.

{'perhaps (538)', 'unusually (19)'}

So, we are in a situation which is, as always, multi-dimensional, but which is perhaps unusually multi-dimensional.

{'perhaps (538)'}

Perhaps you have noted that in what I have said today in my introductory remarks there are four paragraphs that concern our understanding of what is happening on the monetary side.

First, the first half of the last three years, it was mostly the declines in the price of oil and food and perhaps some other commodities that have accounted for something like 75%, 80% of the difference between inflation then and inflation now.

The third point, or perhaps the first, is to acknowledge that diversity of views is an expression of democracy and therefore it is to be welcomed.

And I will again echo what is said by the US authorities themselves, which I have always considered to be very important, even at a time when perhaps market participants were less attentive to what was said.

I mentioned the figures for the last month, and we expect the figures for this month to be lower, perhaps significantly lower.

Finally," close to 2% '' clarifies what we have done so far, what we have had in mind so far and what we will try to continue to achieve, and if the next four-and-a-half years are marked, as were the past four-and-a-half years, by inflation expectations of below 2%, in a range of 1.7% to 1.9%, I think that this would be a result that perhaps nobody would have expected before the euro was introduced.

If you are married and after four years of a happy married life, perhaps one evening you sit together over a glass of wine and think about why you are so happy all the time: nobody would say it does not make sense.

Perhaps we have previously not communicated it successfully enough.

It is nothing alarming that we perhaps have such a phenomenon.

But the fourth reason, and it 's really perhaps the most important reason, is demand.

So, it is quite important that fiscal consolidation is growth-friendly, as I have said many times, namely based on lower taxes, lower current government expenditure, and perhaps if there is room, higher expenditure in infrastructure and structural reforms.

So, I would say, more or less the same level of tightening, but perhaps a little less net tightening.

Or close to, I would say, credit easing perhaps, as you know is the term used on the other side of the Atlantic.

We have an important role to play -- perhaps a more important role to play after this experience than was the case before, as an anchor of stability.

At the present time, I would say that what is clear to me is that the present pick-up of the CPI which we are observing will continue for some months and will perhaps even increase.

So, as you have been mentioning, perhaps the Bundesbank said something, perhaps the Banque de France said something.

Perhaps less simple, unfortunately, to deliver for obvious reasons.

And, having been involved in negotiating the Maastricht Treaty myself, I am absolutely impressed by the fact that when we negotiated the Treaty we had in mind that we would number perhaps seven or eight, or perhaps less.

We perhaps discussed this on other occasions.

So I think that what should be improved, perhaps on both sides, is the way to work together, not necessarily our hiring practices, which, as I said, when they need correction, we correct them without hesitation.

It is perhaps a little bit early to draw definitive conclusions from what we have observed.

Perhaps I have been in touch with Ben something like five or six times during the period ; with Governor Fukui a little less, because we had perhaps fewer exchanges of views to make, but nevertheless frequent contact.

Now, you tell me that we did perhaps a little less than others.

Disinflation is of a different nature, it means that you have headline inflation that is going down, including, perhaps, into the negative zone exceptionally, but that does not mean that the inflation expectations themselves are unanchored on the low side.

So, in a way, this is something that explains perhaps why I do not say anything on January, for instance.

We expect the recovery to continue, at perhaps a slower pace in the second quarter, but still a good figure.

It 's shared by other people ; I would n't say ` widely shared ': it would be too ambitious, perhaps.

But as I have said already, perhaps on the occasion of the last two or three press conferences, it is not -- at this stage -- alarming at the level of the euro area as a whole.

You also have the introduction of the idea that you have a medium-term growth potential and perhaps a longer-term growth potential.

At the same time, we have the rest of the world, and we have these effects that we 've observed over the last few weeks -- perhaps more than a few weeks ; especially in the last few weeks -- so we 'll have to see whether these effects are transitory or are permanent.

What is absolutely clear is that in our analysis, which is shared by economists and observers particularly in international institutions, after having had a clear driving force coming from the external side, then having seen perhaps since the middle of last year, an important contribution to growth coming from investment and gross capital formation, it would be in line with the normal sequencing to have now a significant contribution coming from consumption.

I personally think that in the present situation, where we have the most dramatic challenge for global finance and the global economy certainly since the Second World War and perhaps since the 1930s, it is remarkable that we have a global consensus on the methodology between emerging markets and industrialised countries and in the G20 in particular.

In this domain, as in many others, it is perhaps a case of" the more competition, the better ''.

The commercial banks are playing a much more important role in the euro area than it is the case in the United States in particular, but perhaps also in the United Kingdom.

Well, originally, about three to four months ago, we thought it would only take perhaps two to four months for the higher oil prices and the weak performance of the euro to peter out and gradually disappear from the figures.

We would also say that, if the IMF embarked upon gold sales, it would perhaps be better, from the IMF 's standpoint, to use them to reinforce its own position -- its financial position -- rather than to finance debt relief.

I would add that, if -- despite the thoughts I am expressing, which are certainly shared by a number of partners and shareholders of the IMF and perhaps even large shareholders -- a decision were taken, then it would be absolutely essential that it should not upset the market.

This is the reason why I mentioned that in the months to come we would perhaps observe a level above 2%.

Perhaps a little bit after noon.

That makes life perhaps easier, but I have to say that I would n't want to emphasise the balance sheet size per se.

But we asked ourselves -- and perhaps I have explained this on another occasion -- are we close to the Japanese scenario?

But perhaps the President would like to add something.

I add that perhaps each of us has his or her own way to mention the fact that we will monitor all developments very closely.

I am personally sure that it will develop, perhaps slowly, we will see.

And I would say that if some are augmented, for example I understand pretty well why tobacco should be augmented -- there is absolutely no problem there, although I think that perhaps the smokers in this room would not be at all satisfied -- but I would say for health reasons we can have good reason to do that.

They give credibility to the governments that comply with these rules, and even perhaps more importantly, they increase trust between governments.

Perhaps I should add two points.

You will also have noted, perhaps, that I did not use the words" strong vigilance ''.

Also there are issues like the sovereign cap: ABS are rated according to their sovereign -- perhaps with a few points difference, but this often does not make much sense.

One of the reasons, perhaps the most important reason, for credit flows being low is the lack of demand.

As regards the second semester: as I said, we still expect robust growth -- less flattering than in the first semester, which was absolutely exceptional, but it would remain substantial growth, certainly around potential, perhaps hovering a little over potential.

And we were the first, as perhaps you remember, to embark upon very audacious and bold measures, including the unlimited supply of liquidity at fixed rates.

Well, actually someone said it was one of the best discussions we ever had, perhaps the best discussion we ever had, because we discussed the public accounts.

As regards the money market, we see this market functioning a little bit better -- the volume of transactions in the overall money market has increased significantly, perhaps even doubled.

And we trust that it is a way not only to better anchor inflationary expectations, because in the long run inflation is a monetary phenomenon, but also a way of perhaps taking more closely into account phenomena like asset inflation and bubbles because they are fed by monetary expansion.

The credibility, perhaps, of the transparent interaction with you and, through you, with the full body of observers, savers and investors.

Some are perhaps even decreasing in price, because of strong competition.

We can look back, and perhaps with a little bit more optimism than was implicit in your question, in the sense that we can say that most of the work has been done and that we are on the path to -- as this press conference also indicated in the initial statement in the answers of the President, that everyone feels confident that we are on the way to the normalisation of our objective regarding price stability, and meaning that most of the way has been achieved.

Perhaps things will have to change a bit for two main reasons.

Monetary policy trying to influence only the overnight rate perhaps will not be enough.

Together, we signalled to the market that we would perhaps sell gold under a certain ceiling over a period of five years.

Perhaps this is less clear for other countries.

There are no indiscreet questions but only indiscreet answers, perhaps !

It is perhaps the particular responsibility of central banks always to say more or less the same thing.

Perhaps the first success of the euro.

It is true that it looks to be very much less acute and significant in comparison with what we observed perhaps twenty years ago, or even perhaps ten years ago.

I gave you one explanation, perhaps we have other explanations.

That is a reflection of the fact that the market itself, in its own functioning -- at least if you consider that this is a pertinent indicator -- was thinking that it was not only a short-term episode but, perhaps, a longer-term episode -- an ongoing process which would take more time.

Perhaps one day you will tell me: inflation is at this level, you should do this.

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.

Some criticisms implicitly go in the direction: you should be perhaps a little bit less orthodox, quote unquote.

Then you can adopt, perhaps I would say, a more positive attitude as regards consumption and investment.

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.

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.

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.

We know that it will increase on account of base effects over the months to come, perhaps.

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.

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 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.

Perhaps you have noted that I have mentioned in my introductory remarks an analysis of the situation which is extremely close to the analysis we made in our last meeting, which is not surprising, because everything that we have observed since then has confirmed what we had envisaged in our last meeting.

If you eliminate all those prices that are pushed up and maintain in your understanding of inflation those which are pushed down, perhaps it is not fair ; perhaps it is better for demand-driven change in relative prices to look at the full picture and not only at part of the picture.

I will confirm what I said, perhaps when responding to one of your own earlier questions.

Perhaps it would be better if you put the question to those who will have to take the decision, and not us.

That 's what we are talking about ; some of them are a little more confident perhaps because they live in jurisdictions where inflation and developments are a little more encouraging, or the labour market conditions are tighter.

I trust that, for the sake of clarity, transparency and simplicity, it was perhaps useful to make these two remarks.

If I am not misled -- but perhaps I was reading things too rapidly -- they were divided: ten on one side and eight on the other side.

Perhaps I am too impressed by the beauty of the play because I can not really make pertinent comparison.

Taking into account the fact that there is perhaps the feeling that the euro area in particular, and Europe in general, is in a less favourable situation, I would draw your attention to the following: the second quarter in the euro area is likely to be significantly better than the first quarter.

We perhaps have a phenomenon of re-intermediation, even if we are not sure that it is visible in those figures.

On your last point: we have confident and close relationship with the central banks of Hungary and Poland, and I will only say that it is, perhaps, up to them to say exactly what they want to say at this stage on the nature of our very close relationship.

Previous to having the euro, many central banks, perhaps all of them with the exception of one, had lost completely national sovereignty.

And this would have several, in my view, benefits: first of all a political process that is perhaps easier than it would be if only at national level.

These effects are not only to be found in the wage settlements -- although wage settlements are a very great, perhaps even a dominant element.

Perhaps my definition is unduly limiting the movement that we had.

A number of market participants are mentioning liquidity to characterise the situation where they see" capital chasing investment '' or" money chasing ideas '', something which they note as being a little bit exceptional, because in other times, and perhaps in more normal times, you see the contrary, you see" ideas chasing money or capital '', you see" investment chasing financing or capital ''.

And I do not want to elaborate too much on these reasons, but publicly, yesterday, on the occasion of the International Monetary Conference, together with Ben Bernanke and Toshihiko Fukui, we had elaborated on that and I had myself said: Look, you have perhaps five reasons why we are observing that ex ante savings are at a global level superior to ex ante investment.

That being said, it is clear that we have the letter of the governance that we have today, we have the spirit of the governance that we have today, and we have governance tomorrow and perhaps the day after tomorrow.

I mentioned the fact that in the case of other economies, perhaps, this engine was not important.

It was perhaps more difficult to explain at a time when you did not see the confidence channel functioning.

I mention that because from time to time observers are perhaps losing the sense of what is going on in the real economy.

Perhaps, some people are simultaneously asking for more price stability and a more accommodative monetary policy, because they are not called on to be coherent necessarily.

Let me add one thing, because perhaps I am not being completely clear.

So the thing is not adding perhaps too much to what the IFRS 9 would impose so -- which means that the targets as they were defined are important, but are at the same time reasonable and in complement with the change in the accounting rules.

Perhaps some private sector projections are significantly better, but this is not necessarily the case in general.

I would say, however, that the information and data we have -- including those data which are, I would say, less flattering than had perhaps been expected -- certainly confirm that growth is ongoing.

I would say that it is close to potential, but perhaps at the lower end of growth potential.

Perhaps some people mentioned the figure" 25 '' at a certain moment, but the two main options were 50 and 75 basis points, with the substantial difference being that, ultimately, taking everything into account, we were unanimous in judging that 50 basis points was appropriate in the present circumstances.

I am not thinking of any particular economy, but I think that, among the lessons to be drawn from the present episode in global finance and the global economy, we have to take into account the need to introduce -- through different means, a new framework, perhaps peer surveillance, perhaps other means -- a way of avoiding the persistence of very large imbalances, both domestic and external.

Perhaps the encouragement -- the strong encouragement -- that I mentioned earlier will work.

Perhaps those of you who were in Frankfurt also have a memory of that.

The portfolio rebalancing effect, namely if you buy euro-denominated assets, people who will get cash, will buy perhaps non-euro-denominated assets, and you have a portfolio rebalancing effect through that channel.

Other central bankers have changed their rules because they had, perhaps, fewer instruments and fewer tools available than they would have liked, taking into account their own traditional practices.

We had to cope with a period of perhaps two quarters or seven months of a free-fall in the global economic activity, as well as in each individual economy.

Let me first say something that perhaps is not entirely known.

Others can pre-commit, perhaps, either to go up or to go down or to stay at their level for a considerable period of time.

As regards housing in the US and the US economy as a whole, you know that an order of magnitude which would perhaps be considered by economists as a good order of magnitude would be that the trade coupling, plus the" echo '', the reverberation of the US economy on the rest of the world, which impacts also indirectly on the euro area would perhaps be summed up by the fact that if the US economy slows down by 1%, more or less, we have ourselves an impact on our growth, taking everything into account, of minus 0.2%.

Perhaps in this room we also have editorialists that are very keen on advising us to increase rated and even perhaps think that we should have increased rates for quite a period of time.

If you have the intention to embark on an increase in consumption and you are still hesitating because you have some lack of confidence, you can do it -- perhaps it is time to consume.

I am telling them: perhaps it is time to invest.

Then I tell you the contrary, I tell you that we have inflation which is low, perhaps even lower, but then it will go up again and that for arithmetical reasons that everybody can check.

Again, I do not draw from that a definitive conclusion, but I want you to know this, to have these figures and to see the extent to which there is perhaps from time to time an over-amplification of issues.

Seen from the perspective of the medium and long-term inflationary expectations, we trust that, in the long run, inflation is a monetary phenomenon and we trust that our two-pillar approach is precisely what permits us perhaps to be more assured that our medium and long-term inflationary expectations are fully in line with our definition of price stability.

It is also true that the oil price increases are so important and visible that they perhaps have a tendency to hide other commodity increases a little, elements that are there and that we have to take into account.

Perhaps you want to add something because you have also been quoted.

Perhaps you read that, but it is not what she said.

At the global level, it is not particularly the sentiment of the Governing Council of the ECB, it is perhaps rather the sentiment at the level of the G10 and of the global economy meeting that we regularly have in Basel - which I have the privilege of chairing - that progressively the very powerful dampening that you mentioned on global inflation stemming from globalisation itself, and the increase of the share in the global economy coming from very low unit labour cost economy, that this is perhaps gradually diminishing.

I used the word several times, perhaps three times if you counted well.

These will be our contribution, perhaps a modest one, because we are not largely imbalanced, as you know.

And it is clear that those countries that were growing very fast in the past now have growth which is more modest, and those that were not necessarily growing very fast -LRB- Germany, for instance -RRB- will perhaps demonstrate that they are now growing more dynamically and actively.

Perhaps you have noticed that we said that we will be, when next year starts, in a euro area with 13 economies instead of 12 sharing a common destiny with a single currency.

You have to correct a little, perhaps here and there, there was a slight disappointment.

Oil is perhaps of a different nature.

I would not like to comment further on their entry into the ERM and then afterwards perhaps the euro.

Perhaps we need a little more confidence.

There are both difficulties which are obvious and also elements which are perhaps more encouraging.

We now see that the objective of having an inflation rate for the whole euro area that is close to but below 2% will be met in 2013, or perhaps even before then, but do not ask me the exact date, day and time when this will happen.

We should n't forget that -- perhaps today is the first time I say it, usually by now I am in the fifth time -- We should n't forget that our mandate is price stability, price stability defined as keeping inflation rate close but below 2%.

Again, we are more explicit and I hope that you understand perhaps a little bit better what our permanent attitude is, which is that we have a magnetic north in our compass and incorporate all the information that comes in, to the extent, of course, that it is pertinent and informative.

Perhaps it was something felt by a part of the market, but it was not what we intended to communicate.

Perhaps the overall environment has been quite negative at a certain moment, more positive at another moment, which is understandable, because it is a gradual recovery and we have mixed signals.

A small part perhaps, or a bigger part -- it has to be checked, it is very delicate -- of this insufficient level of consumer confidence can come from the fear of inflation in the future.

When you ask people all over Europe, they still have this idea that perhaps price stability will not be delivered.

My second observation, and I will not expand too much on this, is that, as you know, in the case of Germany, a correction is made for the number of working days, which perhaps plays an important role.

It is important for us to perhaps take advantage of this press conference to say that households in Europe should not be frightened by the fact that we are tackling necessary structural reforms.

In the euro area, the financing through banks amounts to perhaps 75%, with the markets making a much more modest contribution of perhaps 25%.

In the United States the contribution of the markets is perhaps 75% and that of banks 25%.

As regards the first question, we have had a collateral framework since the setting-up of the ECB which was more comprehensive and more complete, perhaps, than others.

I think that all of us -- and this is perhaps going to be the main message of the upcoming G20 summit, which is going to take place in a few days in Los Cabos in Mexico -- all countries and all areas have to work together.

There is an international consensus that has been going on now for years -- for decades, perhaps -- about abstaining from competitive devaluations, so that 's the answer.

Perhaps we use the word too much, but when we say" vision '' we basically have in mind the path towards an objective with all the conditions that have to be satisfied in order to achieve this objective.

In other words, the transmission that takes place through financial channels is perhaps stronger than the transmission that we see through the traditional multiplier effects.

But I do n't know enough about the specificities of this statement to elaborate more than that ; perhaps I will know more tonight.

But perhaps we want to come back on this next time to have a definite view on that.

We perhaps had an additional reason to think it was useful, given that we are issuing a currency for what are now 17 different countries, and this calls for appropriate unification of communication.

But I have explained a number of things that perhaps clarify what we had said in saying that we were in a state of heightened alertness.

And perhaps also one needs to look at the space, the fiscal space the government has.

After all, before the financial crisis, we have seen several countries in the eurozone increasing their government expenditure, and really drawing very little benefit in terms of output growth and employment, showing perhaps that size is not the first thing one should look at, but rather how this money is being spent.

It is also clear, as you noted, that I said that we knew we would perhaps have a hump in the HICP in the months to come.

But I will perhaps protect myself by saying that it is too soon to tell !

That being said, of course, I think it is important to understand why we are observing those differences and, of course, to do all that can be done -- both by the various interested parties and particularly, of course, the governments themselves and the parliaments and social partners -- to understand why we are observing certain things and why, perhaps, on a country-to-country basis, improvements would be appropriate.

One is to recognise that the flexibility within the euro area in terms of cost competitiveness is perhaps superior to what some had envisaged before the euro area was set up, meaning that there can be some important moves up or down in the relative cost competitiveness of the various economies.

When Bulgaria has entered the European Union, then the first question which will perhaps be asked of the ECB will be whether or not it is opportune to enter the exchange rate mechanism, and I can not respond in advance, so I can only confirm what I said.

And from time to time advice going in both directions in the same media, as is perhaps normal in the very vivid opinion-based democracies of Europe and the world.

And as for monetary policy and interest rates, we are very careful to do what is necessary, without pre-commitment, without being obliged to behave in too lax a manner, or perhaps on the contrary in too tough a manner, because we would have made a commitment previously.

Now, there have been, of course, some concerns regarding the perceived impact of the changeover on price changes and perhaps you are referring to this.

So, I am perhaps best advised to stop saying anything, although, for once, you have not exaggerated.

It also indicates that perhaps the EONIA means more today than it meant before, because before perhaps only a very small fraction of the institutions had access to this very low interest rate refinancing.

Observers -- as lucid and vigilant as you -- perhaps concluded that we were increasing rates every three months in the first half of 2006.

As regards the percentage of counterfeit banknotes, the latest information that I have is that we are in a situation which is of the same order of magnitude as we had before but perhaps even better.

Furthermore, Germany, because of its international position, was also touched, perhaps more than others, by the collapse of the global economy.

I 'm taking advantage of all the Greek questions, and perhaps also the Irish questions, to re-state that we are an institution that is responsible for price stability at the level of sixteen countries -- and as of 1 January next year, seventeen countries -- with the size comparable to the United States of America.

Here perhaps the lesson that we can draw is that in order to have a level playing field, we have to make progress in terms of consistency and coherence among different countries with respect to insolvency regulation.

Given our assessments of all the forecasts we have available, both internally and from the outside world - from many, many institutions, both national and international - we do expect economic growth to continue at a rate above 3%, both in this year and next year, perhaps even in the year thereafter.

{'possibility (303)', 'assumption (263)', 'may (1031)'}

In reply to your second question, it is absolutely clear that under a working assumption that the price of oil remains at the present level and may even rise further, which is a possibility that we hate but that we have mentioned, clearly the impact on inflation is upward and the impact on growth is downward.

{'possibility (303)', 'could (2094)', 'probability (40)'}

But it 's a question of probability ; it 's never a question of 100% certainty and I do not exclude the possibility that we could surprise the market.

{'possibility (303)', 'may (1031)'}

I would exclude completely -- you did n't say that, but you may have thought about this in your mind -- I would exclude completely any possibility of monetary financing.

{'possibility (303)', 'might (766)', 'speculation (54)'}

So it would be pure speculation to go into further detail about the various scenarios which might develop, without knowing which one has the greatest possibility of being realised.

{'possibility (303)'}

Certainly the discussion about this possibility has already produced some significant consequences on the markets, for example a depreciation of sterling, quite significant.

Therefore, I would only say at this stage that, even with the recent slowdown in the price of oil, there is still the possibility of new spikes, which I hope will not be observed as it would be very bad for the global economy, for inflation and for all parties concerned.

The second point is about whether the simple fact of having discussed a possibility would weaken the union: well, I mean, if you phrase it this way you can see that that is not an issue.

We discussed the possibility of negative deposit rates, but our objective is maintaining price stability.

We also consider the possibility of adverse developments in the European financial system stemming from the tensions that we are currently observing.

But again, a number of possibilities are being examined on a permanent basis.

And it is also true that as the recovery gains momentum, we also see the possibility of a return to our inflation expectations level.

And so, the possibility of having imbalances was always being looked at and considered.

What is correct is that, as always, we reserve the possibility to act any time, as I said, we do not pre-commit for two, three, four, five, six months later.

This is across the board and I would say a first step would be to exploit all the possibilities that the secondary legislation of Europe permits in all domains.

On the first point, we weighed the assets and liabilities, the pros and cons, associated with various possibilities: zero increase, 25 basis points and 50 basis points.

There are n't special limits to the possibilities that the ECB has in gearing up monetary policy.

That is just to give you an order of magnitude and the possibility to make a comparison.

Bail-in rules are in place and they have enough flexibility that would allow to cope with a variety of possibilities.

Having said that, I do n't see at the present time any such outcome or any such possibility.

There is the possibility of unemployment increasing because there are lags.

The various savers and investors have various possibilities.

To the first question: yes, we have discussed the possibility of doing it.

We are still working hard on the possibility of publishing forecasts in the future.

We discussed the size of the programme or better, we discussed the trade-offs between different possibilities about length and size and the pros and cons of different scenarios and the transmission channels of that.

Second, we had a very nice discussion, again, weighing the pros and the cons which were associated with the two possibilities I already mentioned, and we came to a consensus.

There are, I would say, pros and cons as regards this possibility and we will look at these very, very carefully.

And, third, again years later, there will be the possibility - provided all the convergence criteria, both quantitative and qualitative, have been met - of entry into Monetary Union and also of adopting the euro as their currency.

First, just a reminder that this possibility, which is indeed in the information note that we published, is subject to several conditions.

Regarding the possibility of the ECB purchasing such instruments, it was never discussed and I think it will never be discussed, let alone decided.

And it was expected to be very slow, but increasingly we are getting signals that countries, especially central banks of countries, are beginning to realise the possibilities they now have to diversify their reserve holdings.

First of all, there has always been discussion among us on the assets and liabilities of all possibilities but there was no discussion of any 50-basis point interest rate increase.

We will continue studying various possibilities for action, but you should always remember that both our institutional set-up and the experience of other countries tell us that we have to think deeply before we can come up with something that is useful, feasible, and consistent with our mandate.

On the monopoly issue, central bank money is a product which can be offered by central banks only, but the possibility of providing the necessary securities for settlement will remain open in the future, because the T2S system will not be mandatory.

On the first question, the combination of LTROs with the possibility of using additional credit claims as collateral -- which we had before the Bank of England actually launched the scheme -- is very much the same kind of action.

We always reserved the possibility to judge and assess the situation in line with our definition of price stability and our monetary policy concept.

It is a way of protecting notes against the possibility of being stolen.

There are several aspects of the ABS market that need to be taken care of before it becomes a realistic possibility, and both institutions are actively working on that.

We have the national backstops and we have the possibility for countries to apply for an ESM programme.

And, as I said on behalf of the Governing Council, we call upon them to take advantage of the possibilities, including recapitalisation, which exist at the level of the euro area.

We also call upon them to take full advantage of the possibilities which are being offered to reinforce their balance sheets.

We can, of course, within the framework of this accord, where we have internal arrangements, have one participant deciding not to use his option, in which case there is, of course, the possibility for the option to be utilised by others.

So it is much more the possibility for arranging the timing.

And I see this as a likely possibility in the future.

We should n't forget that we have kept the other reference to such a possibility when it says: the Eurosystem will continue to reinvest the principal payments for an extended period of time after the end of net asset purchases and in any case for as long as necessary.

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.

I can mention that Article 105 -LRB- 6 -RRB- of the Treaty itself explicitly mentions the possibility for executive branches to decide to confer upon the ECB additional responsibilities in the domain of banking surveillance -- not insurance surveillance, but banking surveillance.

The answer to the second question: we are trying -- that 's why what you say is absolutely right ; you have that as a possibility.

On the first question, I would say that there was no discussion on an increase in interest rates today, and as always, we weighed up the pros and cons associated with various possibilities.

The fact that negative rates push down the whole yield curve, because by opening up the possibility in terms of expectations for future rates that the rates will be very low, the whole yield curve is lowered.

So, the debate, the discussion we had was on the pros and cons of two possibilities and not three possibilities.

What is changing is that instead of eliminating it at the end of the year, we will maintain the possibility for these investment-grade instruments still to be eligible as collateral.

The only way I would describe it is that first we discussed those different possibilities and we agreed by consensus on both the decision and the message.

It was a possibility.

We had a possibility of either going back to the normal tenders or maintaining these non-standard measures, which is to have the full allotment.

We had two possibilities -- they were obviously open -- and we decided, as you know now, to maintain this full allotment fixed interest rate.

The position of the Portuguese government -- and the position that I have also expressed myself publicly several times -- is that Portugal should not take advantage of this possibility.

So there is a reference here to a specific value, which is not an automatic guarantee that it will be accepted as a good reason for violating the 3%, but -- as is written in the regulations -- it creates the possibility.

First of all, let me confirm that we were unanimous in considering the interest rates to be appropriate, and all the decisions that were taken as regards the phasing out of the non-conventional measures were taken by consensus, after we had carefully weighed the pros and cons of the various possibilities.

We decided by consensus on all these issues and we looked at all the possibilities as regards the various refinancing operations.

On the second question, we discussed several options and at some point someone advanced this possibility, not on this occasion, on another occasion.

We 've discussed, amply, monetary policy measures and today we have discussed the possibility of doing QE where the central bank would buy government bonds as one option, but also other types of bonds and other types of assets.

So I do not exclude the possibility that some changes will be proposed in order to be less procyclical.

But, in any case, you always have the possibility, on the basis of an assessment made by the surveillance authority, to increase the capital requirements.

We also have the possibility, when things are run correctly in good times of the automatic stabilisers able to function.

These possibilities, in particular, have by far not been fully utilised.

Again, as I have said on behalf of the Governing Council, they should do whatever is necessary in order to reinforce their capital base -- including, of course, taking advantage of the possibilities offered by public authorities.

We still have in some cases the possibility of using the recapitalisation option that is offered by governments.

This includes putting aside earnings, being moderate in the field of remuneration, turning to the private sector for a reinforcement of the balance sheets and recapitalisation, as well as, where necessary, going to the backstop of the governments, including the EFSF possibility which has been offered after the meeting of the Heads of State or Government on 21 July.

I had the possibility of expressing the view of the ECB in the IMFC meeting, so I respond to your question, it has been the case as we had called for.

We did provide the Governing Council with an analysis of the events in Turkey and the possibility of spill-over effects to the euro area, which concludes that such spill-over effects are not to be feared.

So, you will have all possibilities to compare statistics of the highest quality on a state of the art professional basis.

We have been lucky enough to have the possibility of 3-months refinancing since the very beginning, which was not the case on the other side of the Atlantic or over the Channel.

Second, as always, we have weighed thoroughly the assets and liabilities associated with various possibilities, and we did that as thoroughly as usual.

We will then certainly look into the possibility of accepting it as collateral.

This does not mean, however, that we do not continue to call on all our financial institutions to be very attentive, in particular to retain earnings and take all possibilities to strengthen their balance sheet position.

We will examine the situation very carefully and we will, in our next meeting, not exclude the possibility of increasing rates by a small amount.

Fortunately, the Commission 's proposal does foresee the possibility of the Governing Council delegating all the supervisory tasks to the Supervisory Board.

This question implies a possibility that I am going to tell you exactly what we are going to do about the main refinancing operations.

Second, I would say there were a few members of the Governing Council who hinted at the possibility of acting today, but I would n't say it was a prevailing theme of our discussion today.

Interventions are always a possibility and the only time you will hear me speak about interventions, and the deliberations concerning them, will be at the time we intervene.

We have obviously not done so today and I will not exclude, as I have said before, the possibility of our switching to that technique at some time, some day.

Let me remind you that, last month, President Trichet said that the possibility of a rate cut was discussed in the meeting, so the decisions today are not something that are out of line with the continuity of analysis and, as the President explained, the indicators since then have only aggravated and justified today 's decisions.

We finally decided on the basis of a consensus after having exchanged all views and weighing up the two possibilities very, carefully.

First, the Governing Council welcomes the draft article, which provides that the Governor will have a fixed term of office of seven years, without the possibility of renewal.

I am not sure that you will find any other place in the world where such possibilities are offered !

So, I will not comment on any such possibility.

I have the honour of being invited every month, together with the Vice-President, to the meeting of the Eurogroup, so this makes three times a month that we have the possibility of a physical encounter.

We are working hard on it, we are investigating various possibilities and we will finalise those investigations, I expect, in the course of this year -- so well before the final ratification of the Treaty of Nice by the 15 Member States.

The Maastricht Treaty provides for the possibility of the Council of Ministers giving so-called general orientations for exchange rate policy.

Now, the information that we have is that one of the alternatives of the Latvian law on insolvency is the possibility of self-liquidation.

I think that now the authorities have given the go-ahead to this possibility and it 's going on.

{'possible (785)', 'almost (134)', 'risk (3278)'}

And the downside risks come from a continuing high output gap, from the possible further fall in oil prices, from the fact that the nominal effective exchange rate has appreciated in the last three or four months, if I 'm not mistaken, by almost 6%, and, finally, from the fact that we continue to observe a high degree of correlation between headline inflation and medium-term inflation expectations, which means a high degree of correlation between oil prices and inflation expectations.

{'possible (785)', 'appear (202)'}

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.

When we look at the precise figure, I think we have signalled three times in the Monthly Bulletin that we were working on the limited, but still possible, revisions of money figures because of one or two factors, mainly the importance of money market instruments owned by non-EMU residents, which should not appear in M3.

{'possible (785)', 'believe (492)'}

Yes, we believe that it is in the interests of a central bank to be transparent, especially for a new institution, and thereby to be as predictable as possible.

And I firmly believe that it is very important to be as convincing as possible in explaining how our economy works and why we would be better off in all respects -- growth, job creation, prosperity.

We are not in a normal situation in this respect and, as you know, the international community -- and the ECB as member of the international community -- believes that progress can be made and must be made in the functioning of the market, particularly as regards higher levels of transparency of that market, so I would take advantage of your question to call again for as much transparency and responsibility as possible by all partners.

And that is why we believe that we are directly and indirectly helping all countries, but especially those that most need to be in the best possible environment.

We believe that it is fundamental not only because it makes it possible to avoid either inflation or deflation, but also because it solidly anchors the confidence of our fellow citizens and of economic agents.

You have seen what we said today, which is completely in line with what we had said before, as has already been mentioned, and we are sticking to our own analysis, where we have been as level-headed as possible and where we have stated that we indeed believe that what is in the Treaty and what is in the Stability and Growth Pact is very important for all the reasons that I have already mentioned.

And that is possible only if markets, if investors, if savers, believe in the capacity of the ECB to deliver a very low level of inflation over thirty-two years.

{'possible (785)', 'cautiously (8)'}

To sum up the situation as cautiously as possible, I would say that there is no need for alarm at this stage.

We are looking at the situation as cautiously and attentively as possible.

{'possible (785)', 'conditional (51)'}

Everything that we do is conditional upon our own analysis based upon as robust as possible information, analysis, data, facts and figures, as I always say.

{'possible (785)', 'could (2094)', 'possibility (303)'}

As regards your question on the one-year refinancing, we could have had a fixed rate, namely the MRO rate, as was done the first two times, we could have had a rate with a margin, as had always been indicated very clearly to the market as being possible ; and we had the possibility of having this indexed rate.

{'possible (785)', 'could (2094)', 'risk (3278)'}

As I have said over and over again, I think that through the OMT programme, the ECB has done everything possible and it could certainly create an environment which is conducive to reforms because it could remove what we call the redenomination risk.

In addition, we advocate proceeding in the best fashion possible against protectionism at a global level, and that is because we think that protectionism at a global level could be a major risk to global growth and global job creation.

And to the second question: no there is n't such a risk, because we announced about the interest rates that they would be for all practical purposes at the lower bound, but technical adjustments could be possible, and that 's what we did.

{'possible (785)', 'could (2094)'}

I would also mention that I could see one of the producers had decided to produce as much as possible without any other limit than its own capacity.

We will try to help as much as possible ourselves, and it is obvious that we could do much better if we were to improve our structural position, which gives us a very powerful motivation.

It could have been a possible interpretation, because, as you know, another major central bank had embarked upon such a concept.

Let me only say that, as far as we are concerned at the ECB, the Governing Council considers that if we could continue to be active in implementing these structural reforms that we all agree to, we would certainly be able to much better exploit the potential for total factor productivity increases and labour productivity increases that are made possible in particular by technology.

We could see the impact that they had on the markets themselves, which we consider -- I am being prudent also on this point -- had the kind of impact that we were looking for, even if we still have to -- if it is possible -- improve, in particular, the behaviour of the secondary market.

We will not change the way in which we operate for such possible spreads, which could be decided for all the term refinancing that we are carrying out.

On the question on whether or not we discussed it -- we discussed clearly the situation and we envisaged advantages and inconveniences associated with the possible decisions we could take.

That being said, we constantly reflect on what we could do in order to be as efficient as possible in terms of our relationship with you.

We are all taking extremely seriously the presence of these six currencies in ERM II and we will continue to carry out our actions together with the newcomers as responsibly and professionally and efficiently as possible to prepare, when the time comes, when convergence has been achieved and when criteria have been met, for what could be the next step.

To your first question: any indications that could be given in respect of a possible weakening of the fiscal consolidation would be against, I repeat, against the decisions that have been taken by the various governments themselves, against the recommendations and decisions that have been taken within the framework of the Stability and Growth Pact upon the proposal of the Commission and against the Berlin Agreement I referred to in the introductory remarks.

According to the best possible expertise, but all this is of course disputable, filtering out the portfolio shifts could bring back notionally the increase towards 5%, close to 5% instead of 8%.

Each of us weighs up all the pros and cons for the various possible decisions that we could take.

Of course, improvements could always be possible.

We are working at this stage in Europe and at the global level on what could be the best possible avenues.

I will only say that in the analysis of the ECB, of the Governing Council of the ECB, of the full body of the Eurosystem, and of -- to my knowledge and I am speaking with the Vice-President here -- all institutions, observers and academics analysing the situation, we could improve the growth potential if we were to embark as actively as possible on the structural reforms we have mentioned.

It was the worst possible challenge for the world 's central banks since World War II, and it could have been even worse.

For the time being, we think that it could very well be that the allotment ratio will come up again, to a certain point of equilibrium, but it is not possible to make a final judgement.

{'possible (785)', 'depend (251)'}

But it depends on us, on our capacity to improve the level of confidence of all economic agents that these ` green shoots ' will be greener and greener, and that will permit what we all want: the recovery to operate as well as possible and without hampering in any respect the long-term future of stability and the long-term confidence of economic agents.

{'possible (785)', 'dependent (40)'}

And this is dependent on the wisdom, determination and courage of all those who have responsibilities in this area -- on it being corrected in the best fashion possible.

{'possible (785)', 'deviation (40)'}

There have been deviations, there will always be deviations from the capital key due to the liquidity conditions due to the fact that we 're going to be as market neutral as possible in our purchases.

{'possible (785)', 'instability (30)'}

And I would also tell the European households who are hesitating -- and a number of them are reluctant to consume because they fear future possible price instability -- I would tell them" No, we are here to ensure that you have price stability and you have your purchasing power protected.

{'possible (785)', 'may (1031)'}

I would add that, when I was in Washington on the occasion of the recent annual meetings of the International Monetary Fund and World Bank, I participated on behalf of the ECB in the deliberations and discussions of the G7, and you may have seen that in the G7 Communiqué we called upon oil producers to be as responsible as possible.

As far as your other question is concerned, it 's about, I would say, the possible execution difficulties that our QE programme may have to face.

{'possible (785)', 'might (766)', 'believe (492)'}

This is the first point - The second is that to some extent we believe that the possible weakening of the economy of the euro area might be due to a credit contraction that actually started last year.

{'possible (785)', 'might (766)'}

And this of course is an element which might make it possible to explain why financial markets are under the influence of this very abundant supply of additional savings.

As usual, we discussed all possible instruments that might cope with these two broad scenarios and our discussion will continue, is taking place as usual.

If and when particular countries might have major difficulties, it is always possible, as has been proved in several cases, that there is help available from the European Union itself and from the European Commission and which is backed by governments.

We 're still assessing what possible likely impact sanctions might have on the euro area economy.

It might come from the fact that a number of firms want to be as liquid as possible and so are drawing from their credit lines, standby credit, confirmed credit.

{'possible (785)', 'perhaps (538)'}

However, we have a lot of teleconferences in the course of the year, something of which you are perhaps not fully aware, and decisions are always possible via teleconference.

And perhaps you have noted that the Governing Council also says that we should eliminate all traces of indexation in our economies, including wage and salary indexation, and we should reinforce as fiercely as possible competition for price-setters so that there are no second-round effects.

We are in a position where we feel, perhaps more intensively, the importance of having the economic union functioning as well as possible.

So all I can say is that, as you know, we already consider Bulgaria and Romania as friends, as observers in our committees and meetings, including those of the General Council, so as to prepare in the best fashion possible for their belonging to the European Union, and tomorrow, and the day after tomorrow perhaps, if criteria are met and if everything is in good order, to the euro area.

Harmonisation is perhaps not the proper word, but they have exchanged their calendars what they foresee to issue, to avoid as far as possible to have a lot of issues on the same day.

{'possible (785)', 'possibility (303)'}

As regards your second question on loans I would take advantage of your question to mention that we consider it extremely important at this stage that the decisions that have been taken at the level of the governments, and I have to say that we ourselves called for those bold decisions to be taken, in particular the possibility of recapitalisation, the possibility of granting guarantees, is something that is very important to implement as soon as possible.

We also call for the banks to take advantage of all possibilities in terms of improving their balance sheets in order to be able to finance the real economy as well as possible.

{'possible (785)', 'possibly (112)'}

Regarding my plans for after 9 July 2003, except in the case that the Council were to ask me to stay on a little bit longer: I have no plans whatsoever, except to enjoy life a little bit more intensively than was possible up until now, with my wife and in the midst of my family, possibly partly away from the Netherlands, in France.

{'possible (785)', 'probability (40)'}

We certainly have a higher probability than before, taking into account what we have seen in the past month, of having positive growth, but again a bumpy road is also pretty possible and we have to be fully aware of that.

{'possible (785)', 'probably (249)', 'perhaps (538)'}

We probably have very complex phenomena, including the fact that it is possible that a number of corporations are more inclined to be more liquid, perhaps to draw on their lines of credit.

{'possible (785)', 'probably (249)'}

We probably remain the only ones among comparable central banks to have a press conference in order to be as clear as possible and as transparent as possible.

What is clear, in my opinion, is that we have -- through the banking prudentials as well as through all other possible grids -- to look at what is procyclical in the present set of rules and behaviour and try to avoid procyclicality, because one of the lessons of the present observations is that there is probably a tendency for parts of global finance to be much too procyclical.

{'possible (785)', 'revise (215)', 'speculation (54)'}

So these are the facts, and any speculation concerning possible choices is unfounded because decisions have not yet been taken and the revised plans have not yet been assessed.

{'possible (785)', 'risk (3278)', 'possibility (303)'}

I see a" menu of options '': after the recapitalisations, after the guarantees, we now see the need in some circumstances for additional possible tools, namely the possibility of purchasing, or putting aside, toxic or vulnerable assets, and also this idea of having a" tail risk '' guarantee for assets that would remain on the balance sheets of various banks.

{'possible (785)', 'risk (3278)', 'volatility (407)'}

It is possible that, with the benefit of hindsight, we would say that this has been an episode of correction of the pricing of risks in the global economy and in global finance, and that we have finally been through a hectic period, including episodes of overshooting and intense volatility ; but that has driven us to a better appreciation of risk and risk premia, both in general and in terms of global finance, making global finance healthier and global economic growth more sustainable in the long run.

But you know that behind all this stands a theory quite sophisticated, because you have the inflationary expectations themselves, and then you have risk premia for the possible inflation volatility, and also liquidity risk premia.

{'possible (785)', 'risk (3278)'}

I would not embark on any kind of" gossip '' in answering the part of your question which relates to how we should act in view of possible risks stemming from a slowing down of the global or US economy.

But what we mean is that it has to go through the grid of the balance of risks to price stability, taking everything into account, as clearly as possible.

We try to be as comprehensive and to understand as much as possible, and we go then through our own balance of risks.

But basically, we 've been accepting ABS in our collateral for ten years, so it was quite natural to have as much similarity as possible with our collateral rules when we come to risk assessment.

To sum up our view in the best fashion possible, it is clear that we still have upward risks, that is absolutely clear.

The other thing that is related to the letter -- and, incidentally, I do n't think that the leak came from Jens himself, I am certain that it was not him -- is that the substance, the content of that letter is present in all our minds: the possible risks of our monetary policy, the complications -- which are largely communication-related, I would say -- created by the use of additional credit claims, and the TARGET2 balances as well.

Our aim is to be as certain as possible, with the best analysis possible, that we are at any given moment in time putting our monetary policy stance in line with what we feel the risks are for future inflation.

That is something important and it would permit the evolution of the market to be as effective as possible in terms of going back to a normal assessment of risks in general.

As regards your question why we do not have any bias, we have just increased interest rates and we increased them precisely to be sure that, taking into account the risks that we see, we can cope with those risks, offsetting them as much as possible.

So, I would have a relatively positive judgement on their awareness that they are living in an environment which includes risks and that it is their duty to take into account those risks and to be ready to weather a possible materialisation of those risks.

And the hedge funds themselves are called upon to work out benchmarks on what would be the best behaviour possible as regards transparency vis-à-vis core intermediaries and transparency vis-à-vis their own investors -- those individuals or entities that are giving them their capital -- and a benchmark for their own internal risk management systems.

So the supervisory authorities would be called upon to ensure that the core intermediaries, particularly the big commercial and investment banks that are in direct contact with the hedge funds, have the best risk management practices possible, are correctly enlightened on all the risks they are taking and have a correct understanding and a correct information on what the hedge funds are doing.

I think there is nothing really new in the message of the Governing Council in this respect ; it is an elaboration on that kind of possible risk that we see in the global economy.

There are possible combinations of concerns with overconcentration of sovereign debt in the portfolio of some banks, by changing the risk weights accordingly and creating then a price disincentive for the accumulation of possible excessive holdings.

We consider that by ensuring price stability -- price stability meaning less than, but close to two percent -- we are guarding against inflation and against the possible risk of deflation, which never materialised.

If the price of oil and commodities is going up we have both risks, indeed the worst possible risk, that is to say a risk of falling growth and rising inflation.

As a matter of prudence, we also decided at the level of the Governing Council, that the NCBs should establish their respective shares of an appropriate total provision in their annual accounts for 2008 as a buffer against possible risks arising for the monetary policy operations.

The provision would be used to cover possible losses arising from the risks that I mentioned.

On your first question, we are looking very carefully and constantly at the possible risk of deflation -- as the OECD and the IMF are doing.

I would say that the possible increases in oil prices and commodity prices certainly constitute a very large downside risk.

In this context, the possible repercussions of both geopolitical risks and exchange rate developments will be monitored closely ''.

You know that when I mentioned the risks that we had in front of us, coming from the international environment, I mentioned explicitly the possible rise of oil.

We have outflows also caused by a possible re-pricing of risk in some other parts of the world following changes in monetary policies.

And there are some downward risks now, and the risks have to do with the possible weakening of global demand, have to do with geo-political risks that are of serious significance and have to do with the exchange rate.

Our main aim is to have an appropriate functioning of the money market and to diminish the various risk premia on this market as much as possible.

{'possible (785)', 'seem (653)'}

It seems to us that it would be very important that the negotiation drives Cyprus and consequently the euro area in the best and soundest position possible.

It seems to me that it has been an exemplary cooperation with us in particular and with the other European institutions to pave the way for the best transition possible.

On a possible European Monetary Fund, I would just say that to use the adjective" monetary '' still seems absolutely inappropriate to me.

When I call for the restructuring of the balance sheets of commercial banks to be as proactive as possible, this is something which seems, to be appropriate considering the challenges that we face.

{'possible (785)', 'variable (72)', 'could (2094)'}

Now, finally, we have found out that the best possible way to use it would be relatively close, in terms of signalling procedure, to the fixed rate tender, so that we could shift from one to the other without blurring market players at all, i.e. a combination of the variable rate tender with a minimum bid rate.

{'possible (785)', 'variable (72)'}

For variable rates, by contrast, we had said from the beginning that we wanted to have that tool available and we have studied the various possible features of this variable rate system for many months.

{'possible (785)', 'volatile (65)'}

The speed limit itself has to be elevated and that is why we always mention structural reforms as being of the essence Thanks to our own mandate of price stability and to the extent that we deliver price stability, we have a very important responsibility in permitting growth to be as close as possible to the speed limit and not to be volatile ; in avoiding the stops and goes that are associated with inflation.

{'possible (785)', 'volatility (407)'}

That needle of our own compass, which is our mandate, is extremely important because it permits us to be as close as possible to the speed limit of growth in the medium to long-run perspective and to diminish the volatility of output.

On the second question, you 're right: one of the lingering questions was, how is it possible that with all this volatility in oil prices and exchange rates and interest rates, is n't there any financial stability problem?

As regards what I would call the present episode of market correction, with its hectic episodes, elements of overshooting and increased volatility, I would say we have to be pragmatic, as realistic as possible, and we have to do our job as well as possible.

{'possible (785)'}

As you know, as member of the international community, we are calling for oil markets to function as well as possible and for this price to go down and we are strongly calling for that.

And the growth-friendly way means lower current government expenditure, lower taxes, to the extent that it 's possible within the stability and growth pact higher capital goods expenditure, higher public investment and all this should be accompanied by structural reforms.

My preference in respect of this stability mechanism -- but this is my preference -- is for the EFSF, the EFSF first, and the ESM later, to be fully equipped and operational, and made operational as soon as possible.

I do hope that we will one day achieve the goal of having a single currency for as large an area as possible, certainly encompassing all members of the European Union.

We are faced with the dilemma of, on the one hand, being as open and transparent as possible, and on the other hand, with what we would see were we to have fewer press conferences.

We want to be as comprehensive as possible.

I therefore urge them to be as responsible as possible because there is a common interest in the global economy.

I invite, on behalf of the Governing Council, the President of the Eurogroup and the Commissioner to each meeting of the Governing Council, i.e. twice a month, which allows as much contact as possible.

We are all aware it 's clearly in the interest of the Greek economy to have these capital controls last as little as possible.

Indeed, I think it is important that what we communicate is adapted as much as possible to various circumstances.

It 's been elaborated by the European Commission, which I want to thank for their responsiveness, for the designs capacity, and I want to thank also all the members of the European Union that have made this possible.

As I have already said, there is no contradiction between price stability and the best environment possible for growth and job creation.

I do not want to pre-empt the result in any respect, but the principles I have mentioned are very strong, which calls, of course, for as thorough as deep and strict as possible an examination of what has happened.

And I will certainly not mention anything in advance of our meeting other than say what we have already conveyed to the Chinese and they know exactly our sentiment on a possible better functioning of the global economy, if some moves were to be made.

The Vice-President and I have a special responsibility for that team spirit to be as good and deep as possible.

My answer to your first question is no, meaning that we had a brief discussion which was not in any great depth and did not touch on any technical aspect of this possible measure.

So, in a sense it was our duty to protect taxpayers ' money in any way possible.

Because what is important, is to go back to the market as soon as possible.

That is the reason why we are so strong in calling for appropriate governance, in calling for the reinforcement of governance by all means possible, and in calling on governments to fulfil their responsibilities and to have a sense of direction.

So, we have a very strong message for banks: to do what is necessary to put themselves in a situation as healthy as possible to be able, of course, to do their job, which is to finance the real economy.

So, it is, by necessity, only a partial analysis that is possible today.

The ECB has done, I think, what was possible.

The Eurosystem has always been very alert in following everything that has happened as efficiently as possible.

We would be as public as possible.

And, I would say as candidly as possible, we have no bias.

On today 's meeting, I will only say that it was a meeting as usual where we looked in-depth at all situations and we exchanged all possible views.

But this is, in my opinion, proving that by being as explicit as possible on our definition of price stability, we are helping the anchoring of inflation expectations in the medium term.

We are looking at all possible views and angles of vision for inflation expectations.

I said already that I did not exclude other possible non-standard measures.

First of all, as soon as possible means fixing, together with the Commission the appropriate medium-term target and a credible pace for reaching the medium-term target in order to restore confidence and to consolidate confidence.

They ask us to be as transparent as possible ; they ask, in particular, that, in this candid exchange that we have, we be even more transparent.

I try to be as transparent as possible, as you know, and we are proud that our predecessors, Wim Duisenberg and Christian Noyer, gave us -- to Lucas Papademos and me -- the concept of this interaction, because it did not exist before the setting up of the euro, as you are aware.

And we also decided to embark on a swap of 50 billion dollars with the Federal Reserve System in order to be able to deliver dollars in Europe to cope with possible problems of counterparties in New York.

So, we take the appropriate decision on the interest rates ; then we look at what is or is not necessary to help restore the monetary policy transmission mechanism as correctly as possible.

We are following the present geopolitical tensions with extreme attention: it is our duty ; there are possible repercussions, and we remain permanently alert to the extent that it has an impact on our primary mandate and an impact on the functioning of our monetary policy transmission.

We have a joint interest in both our economies for this to be managed as well as possible.

On your second question, I would only say that these new stress tests are being prepared in the best fashion possible by the appropriate bodies, and we are following that very very carefully -- to the extent that we at the ECB are concerned.

As regards the decision that will be taken by governments in respect of the EFSF and, tomorrow, the permanent fund, we call for the utilisation of the EFSF to be as flexible as possible, and as effective as possible in terms of magnitude.

On the first point, I would only say that we are welcoming Governor Liikanen when he comes -- I have already paid homage to Mr Louekoski and his invitation, and spoken about Matti Vanhala -- and we are absolutely sure that we will work in the best possible fashion with Mr Liikanen.

At this stage we do not have a Governing Council position on Slovakia and I strongly encourage Slovakia to embark resolutely on a convergence programme that would be as active and responsible as possible.

Well, we are doing everything possible to counter it by continuing to explain our monetary policy actions over and over again, as I am doing today.

This was the case in Berlin with the 0.5% reduction in the structural deficit year after year and with the commitment to reach the MTOs -- the medium-term objectives -- as soon as possible, in any case by 2010 at the latest.

So, by being as vigilant and credible as possible in delivering price stability in the medium and long run, we make a decisive contribution to growth and job creation.

We are speaking of the possible functioning of ERM II and whether it was ERM I or ERM II we have never embarked on a policy of pre-announcing or pre-commenting possible future decisions.

I will say that it is our collective and collegial responsibility to have ERM II function in the best possible way.

On the interest rate moves of other countries, I can not comment, with the exception that, as the Danish Governor told me, truly, it has become possible for the Danes to lower their official rates partly as a result of the successful launch of the euro.

They do not reflect only unfounded fears of possible reversibility, they also reflect the quality of the outstanding credit of these countries.

So, everything that permits this market to function as smoothly as possible is welcome.

But we did have such analyses and you can imagine what the various consequences of various possible scenarios would be.

But what we can say is that we urge the oil producers and all partners to maintain the highest possible level of responsibility in the present circumstances.

We have to work on that and we have to be sure that what we are doing is really effective, and that is the reason why I insisted on the fact that the decisions that have been taken -- not only by us but also by governments -- have to be implemented as quickly as possible, including the guarantees, including the recapitalisation.

And incidentally, outright purchases of bonds are identified, in Article 18 of the Statute of the ECB, as one of the various possible tools that our monetary policy has and can use.

As regards your second question on the outright purchases, I think it is possible.

We have to do all that is possible in order to get the money market functioning normally again, to get commercial banks granting loans and credit normally again.

And we call on them to take fully into account all that has been decided already, which will be implemented as soon as possible by authorities.

It is vitally important that we get back to normal as rapidly as possible.

That being said, the worst possible attitude would be to make anybody a scapegoat.

First of all, they very wisely thought about possible measurement errors in HICP data, so they wanted to keep a significant cushion between price behaviour and deflation.

Again, we have to be as clear as possible: that particular interpretation would not be correct.

We also said that they have to embark on issuance of new shares and stocks when possible, and to have recourse to governments and to the recapitalisation options that were established in the past and are still necessary in a number of cases.

As regards your second question, we are looking at all possible instruments, but there is absolutely nothing immediate in this domain.

As regards your second question on debt reduction, I mentioned the fact that in the past it has proven possible to go from very high levels as a proportion of GDP to sustainable levels.

And I have confidence that they will manage this difficult issue as well as possible, as they did in the past.

It is our hope that we will proceed as rapidly as possible with this market normalisation, which should be part of the normalisation of the overall situation.

So the main discussion was whether to act today or not, with a view to some possible action in the future.

We briefly touched upon the complexities that such measure would involve and on possible unintended consequences.

Yes, I say" yes '' again... and they should start as soon as possible.

And that is the reason why we are so determined to take any occasion to say: let 's embark resolutely on structural reform, let 's complete the Single Market, let 's have an integration of financial markets which would be as complete as possible, let 's let the workers of Slovenia go to the rest of the euro area...

And that includes the statements made by the ministers -- I should say by all but one minister -- and the ECB that the adjustment has to start as soon as possible, that is, in 2003, to be precise.

Let us see and wait a little bit to analyse that as closely as possible, see what is cyclical and what is structural in the recent evolutions.

But we expect of course that the active pursuit of structural reforms, if they continue to be implemented as actively as possible, will permit us to have a better position as regards labour productivity and then, by way of consequence, as regards the growth potential.

Our position is that not only the ECB but also national central banks should be involved in all layers of the structure to the maximum extent possible or feasible.

And this is because of what I said before, namely that we do n't see, with the possible exception of Germany, any substantial pressure in the wage and price mechanisms.

And then as a micro-supervisor, the SSM will establish plans to have supervisory actions to individual banks to speed up the work-out of NPLs in order as quickly as possible to address that problem, working on the balance sheet of the banks, which of course implies that it will take some time.

But at the same time, in the midst of what one would qualify as good news as far as growth and employment are concerned, we still see no substantial pressures on the wage and price-setting mechanisms, with the possible exception of Germany.

We are responsible for the" M '' and we do our own work as well as possible, and I am speaking of course on behalf of the whole Governing Council.

There is no contradiction at all between being faithful to our mandate and preserving an environment as favourable as possible for growth and job creation.

To the extent, however, that the authority for supervision would be taken further away from the national central banks - this is one aspect of the plans - if true, this would be of the greatest possible concern to all central banks, including the European Central Bank.

It goes without saying that, to fulfil that mandate and also the mandate to guarantee financial stability in the system in practice, it is much easier if the ties between supervision and the central bank - and here I mean the national central banks, which are our natural channel of communication to the markets - are as close as possible.

We asked market participants and investors to be as keen as possible to avoid sharp and abrupt corrections.

This is, of course, part of the reason why we have to be as active as possible in improving confidence, because this scenario is a result of an absence of confidence.

It is absolutely clear that our non-standard measures have been designed to facilitate credit -- the loans and the financing of the private sector of the real economy -- as much as possible.

I think it 's an important sign, and we should certainly encourage this as much as possible.

In addition, we encourage governments very strongly, as I said on behalf of the Governing Council, to be as sound, reasonable and credible as possible, because again it is their way of reinforcing confidence and ensuring that their own financial environment is as good as possible.

And of course it is the responsibility of the executive branch and parliament to be as credible as possible, in order to facilitate the financing of their own economy ; not only the financing of the treasury, but the financing of all other entities -- including private entities -- in the economy.

I said we did not decide today that they were at the lowest possible level.

Let me only say that we rely upon the extreme vigilance of all national surveillance authorities, and we have always encouraged them to be in as close cooperation and collaboration as possible.

And add to this also possible negative surprises in some emerging market economies: that 's also a source.

So it is not surprising that we have concentrated our attention on commercial banks and on being as forthcoming as possible as regards this channel.

Again, we are studying possible additional non-standard measures.

As regards further non-standard measures, on top of the two measures I have mentioned, on top of what we have decided today -- to say that we would continue as long as needed and beyond the end of the year -- we are discussing and studying possible new non-standard measures.

Well, there are many possible technical devices.

I should like to remind you that from the outset we had said that we had two possible tools.

So, by implication, that means that we hope these extra revenues, as they come in, be they from privatisation or licensing of GSM features or from cyclically higher tax revenues, will be used to the maximum extent possible to strengthen the process of consolidation of the public finances, in other words, to reduce the deficit and to reduce the burden of debt.

But that being said, your other question was:" Was it possible to avoid the crisis? ''

The possible announcement that we meet by teleconference is usually made the Friday before the meeting, but next time we will in fact meet physically.

We wanted the move to be as convincing as possible and we were afraid that a smaller move would only have led to further expectations for the future, that this would only be a first step in a series.

We have by all means possible tried to avoid that impression.

We were very proud because, as you know, it was a unanimous decision of the Governing Council of the ECB which made it possible to get out of a situation which was obviously very difficult.

We also agree that we have to correct them in the most resolute way possible.

That being said, we will continue to monitor all information very closely and to be as pertinent as possible in our economic analysis and our cross-checking with the monetary analysis.

We ourselves hope that Poland will go as far as possible in this direction.

From that standpoint we are looking at all possible information, particularly the break-even inflation.

We try to do as well as possible, thanks to you also, in terms of being transparent and communicating in a world which is complex.

We are very keen on having the closest possible harmonisation and cooperation between the various authorities concerned.

We consider the monetary pillar as being very important for us, particularly as we had to organise the transition to the euro in a fashion which was extraordinarily ambitious, because we had to ensure that the euro had the highest possible level of credibility.

It is always time to be as sound and reasonable as possible in terms of protecting real wages.

Third comment: banking supervision is organised in all possible ways in industrialised countries and the rest of the world.

Monetary policy has been clearly as easy as possible and will continue to be until the objectives are reached.

It improved the financial conditions of banks, so as to make it possible for banks to loan money to the real economy.

I have to say that the work which has been done by all of us, -- I 'm speaking in particular of the ECB 's Governing Council as a whole and of a number of members of the Governing Council in various positions, and also of the international community -- was as good as possible a job.

I have to say that all Council meetings with ministers have to work as well as possible.

Regarding possible sales of gold by the IMF, this is indeed an issue that is discussed in the IMF.

I think it is our duty to be as clear as possible on that.

I myself signed the G7 communiqué calling for the oil market to function better and to improve transparency, and I will reiterate that goal: as high a level of responsibility as possible from all partners concerned, whether they are producers or consumers.

I also think that it is important for consumers to be as good energy savers as possible.

So we have a feeling that, by ensuring price stability and by taking the decisions we have taken in the past, we are really paving the way for, I would say, the financing of growth in Europe to be as easy as possible.

The third point is that we want to be as inclusive as possible.

From that standpoint, I confirm that, from our own perspective, the message has been well-received and interpreted, including as regards what is presently in the market for possible future decisions.

Yes, it is possible.

A decision will be taken in due time about the possible successor programme.

On the second point, on Greece, the current adjustment programme for Greece expires at the end of 2014, so this leaves some time for the Eurogroup to decide on a possible extension of the current programme and to assess the prospects of Greece regaining access to capital markets.

We exchange all possible views.

Now you will ask me how it is possible that there are such very low levels of long-term interest rates.

I am sure that the European Commission has done a splendid job on both accounts and the Council is now called to sign these two proposals, so that they can enter into force as soon as possible, because we have seen that they are crucial for stability.

We want instead that growth should be sound, without inflationary tensions so that it will last as long as possible and be as strong as possible.

But then I want to repeat - we do want to be predictable, to the maximum extent possible, because only in this way can we also succeed in being credible on the markets.

So it 's very difficult to assess what is the medium - / long-term consequence of a possible -- possible -- change in the US administration economic policy.

But I should stress the possible, because we are still at a very early stage.

So, our message remains absolutely the same, telling the financial sector in general that it would be very appropriate to repair the damage as actively as possible and to make it possible for the financial sector and the banks to do their job, which is to lend.

That being said, there are certainly also supply aspects, and we are as active as possible in trying to understand what can be done to alleviate these supply constraints.

We would like the supply side of the financing not to be a constraint, or as little a constraint as possible.

I confirm what you have said, that in view of the Governing Council this law 's provisions on the taxation of Banca d'Italia 's gold reserves raise very serious concerns as regards possible infringements of Community law.

As regards our profit and loss it is very likely we will post a profit which will go to a reserve position in order to permit us to face up possible future challenges.

As regards your question on the counterparts of M3, one of the great advantages of our own methodology with the two pillars is that, when we look at the monetary pillar, we are bound to try to understand as thoroughly as possible the dynamics of all components, and not only M3 alone.

And so the only possible path is to cure and proceed and carry out surgery if needed.

As regard supply, we are doing whatever we can to keep our banking system as active as possible.

I would echo all that has been said in the run-up to the important meeting, the G20 which is taking place in London, namely that a great number of decisions have been taken by the authorities with respect to support in the financial sphere and that it is extremely important for all those measures to be implemented as soon as possible, measures that are very important for enabling the banking system to lend, which is the task of the banking system.

And to the extent that moral suasion is important in the present circumstances in which we find a lack of confidence wherever we look, I would certainly echo what I have said before and what the Governing Council has said, namely that we call on our banks to be as active lenders as possible in the present circumstances.

It is worth remembering that, a few months ago, I told you that we would make every effort to revive our money market and to allow it function as well as possible.

In response to your first question, as always, we had a very in-depth discussion, we looked at the situation from every possible angle and we took our decision by consensus.

Again, we looked at the situation from every possible angle and we decided by consensus.

It is not our intention to do anything at the moment I am speaking, unless to apply and implement previous decisions as effectively and professionally as possible.

I will only tell you, although you know that, already that I participated as actively as possible in the ministers and governors ' meeting that took place in Brighton.

We are encouraging all possible means for the commercial banks to reinforce their balance sheets.

We mentioned that we are being very vigilant and my understanding of the position of the Governing Council -- fully in line with assessments made in the past - is that an increase in interest rates at the next meeting is possible.

To sum up our message, it is that you have to put yourself in the best possible situation because everything relies upon the governments themselves.

The issues we are speaking about are associated with the signature of governments themselves and so governments should do their own job as well as possible, apply and implement fully what they are committed to do and be ahead of the curve.

What we are saying when we speak of" automaticity '' is, in particular, that the excessive deficit procedure should start as automatically as possible in order to avoid interference, with all the considerations involved, which has proved in the past to be extremely counterproductive.

So, it is not certain but it is possible.

Given my own understanding of the attitude of the Governing Council, we have expressed our judgement as clearly as possible.

As regards your first question, firstly an interest rate increase at the next meeting is possible, but it is not certain.

On our website you have our opinion and you have a summary of our opinion in ten points that are the points of particular importance, including in particular automaticity -- as much automaticity as possible -- in the procedure for excessive deficits and for the sanctions, a judgement on the fiscal and economic situation which is as independent as possible, and so forth.

I will not say anything on the timing of possible changes as regards the persistent bidders.

I think that the success of the stress tests has demonstrated that the Governing Council of the ECB was wise in recommending stress tests, in recommending the publication of the results at the level of individual banks and in recommending as much transparency as possible.

We keep our composure as much as possible in all circumstances.

With regard to the first question, we had an extensive discussion about a possible interest rate cut.

So, not only do we try to be as transparent as possible but also we, more or less, contributed to changing, for the sake of transparency, the state of the art of communication in central banking.

We consider that on top of the possible interaction between asset inflation and possible bubbles and the monetary policy oriented towards price stability, which is the rule of the game for all central banks, we are keen ourselves on having a monetary analysis.

That has made it possible to generalise for 306 million inhabitants a level of market interest rates that was previously the privilege of only a fraction of those 306 million inhabitants.

And then we take a decision, which has to be explained to you as well as possible.

So I would interpret such ideas as aiming at having the best functioning possible of the executive branches within their own constituencies and of the Commission itself.

We want to clarify as much as possible our assessment of the medium term outlook for inflation and what our reaction functions are.

You had a second question on the liquidity injections: again, as I said, we ensure that money markets function as properly as possible ; we did that in the past in a fashion that has been observed very carefully the world over.

I always ask all commercial banks -- all financial institutions -- to be as transparent as possible and as responsible as possible.

That being said, we are asking for competition to be as intense as possible in the euro area.

It would also be in the interest of sustainable growth and job creation and help to keep inflation as low as possible.

Well, some of these factors are the exchange rate and the possible weak domestic demand and weak employment figures.

Then we discussed the possible causes of this or how to read through -- to read this normalisation.

Well, I do n't know whether it 's possible or not.

And I am referring to market reinforcement of balance sheets through, in particular, a possible issuance of new capital, which would be subscribed by the private sector.

I note that the market has, thanks to this accord a full understanding of the possible interaction between the central banks and the gold market, as far as the signatories are concerned.

Yes, we are doing our utmost to underscore the confidence that the world has in this young form of money, the euro, and we would certainly hope that not only the ECB, but also politics would help us to the maximum extent possible in supporting this confidence-building process.

We all have our responsibility, but it is important that we understand each other as well as possible with mutual respect and mutual respect for independence, which goes without saying.

Our will has never been to have a Eurogroup which is as weak as possible -- it is exactly the contrary.

On the first point I would say, that we are very eager ourselves to have the best possible exchange of views between the Eurogroup and the ECB.

We are as comprehensive as possible, as you know, in our economic analysis and we are also, and this is very important, never prisoner of a particular equation, of a particular system of equations, or of a particular algorithm.

And the part for which we are responsible we try to deliver in the best fashion possible.

I would only add that we are proceedings with our work regardless of what the timing is for possible regulatory changes in this area.

And the other news is that we are about to hire -- I ca n't disclose any names, because the thing is n't finished yet -- but we are about to hire a consultant who will help us to design this programme in the best possible fashion.

And this is done by all central banks on both sides of the Atlantic, for instance, because it makes it possible to gain the confidence of investors and savers.

But all this is possible only if the better conditions are complemented by structural reforms.

Not because there is any possible consequence, but because we have the technical knowledge and habit of doing this with the help of all the national central banks of the Eurosystem.

As long as there are no so-called" general orientations '' being issued by the Council of Ministers, which is possible according to the Treaty, albeit that the Council of Ministers said at the Luxembourg summit three years ago that the issuance of such general orientations would only be considered in very exceptional circumstances.

Now, is the liquidity to accommodate possible second-round effects already there?

This clause would make it possible in the future, if the number of members of the Eurosystem - not of the European Union, but of the Eurosystem - were to increase significantly, to change the procedures of the decision-making bodies of the Eurosystem.

If this were the case, I would tell you that we are at 2% and now we consider that we will stay at 2% and will wait for the possible future increase.

At the same time I told you that we will not fall into what we consider to be a possible liquidity trap, which is something that we would deem dangerous for our own economy, taking into account our own circumstances, and that we also have other means, other ways, if necessary, of embarking on" non-standard action ''.

On the handling of the money market, you know that our main aim is to revive the money market, to help it to function as well as possible.

The main aim of this re-widening of the corridor is to push the banks as much as possible into returning to their own intrabank transactions.

So we will continue to be as pragmatic, effective and efficient as possible in this domain.

We will discuss the matter as expeditiously and professionally as possible.

Well, on the first question, as I said, it was a unanimous decision and there was n't much discussion about other possible changes in monetary policy for the coming months.

Another part was devoted to assessing the progress of -- well, the possible progress we 've made -- about inflation, where we said that basically, inflation, headline inflation, will hover around 1.5% for the remaining part of the year.

This is not possible legally now so it 's an evolution of the system that at present time I judge unsatisfactory and needs to be changed.

We are confident in the medium run, we have to remain as vigilant, alert and pragmatic as possible.

And it is, of course, for the US to look at it in the most appropriate manner possible.

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.

In terms of anchoring inflation expectations, which is very important from both perspectives, it is important to avoid expectations of very high inflation -- which we have done as responsibly as possible -- and it is also important that inflation be anchored close to 2% -- as it has been since the start of the euro -- in order to avoid the reverse counterproductive effects.

We will continue to be as active as possible in the various international groupings, both informal and formal.

As regards a global approach to banking regulation, we are certainly in favour of as close as possible cooperation between banking surveillance authorities at the global level.

As regards M3, I would say that, as you know, we look at the monetary pillar with a view to understanding as much as possible the complex dynamics that underlie it.

Collegial wisdom implies that you exchange all possible information, arguments and analyses.

What we are telling Romania is that we encourage Romania to reform as efficiently as possible.

I also mentioned explicitly the possible unwinding of global imbalances.

We discussed all possible arguments and exchanged views to be sure that we were taking the best decision.

It is perfectly possible that 2.25 has the same characteristics !

It is our responsibility to be as clear and transparent as possible with market participants, investors and savers.

We try to be as transparent and predictable as possible.

I have said, as clearly as possible, what we thought and what our own understanding of the situation was.

As regards the money market, we acted when needed to permit the money market to function as well as possible, in line with our decisions as regards the interest rates for which we are responsible.

We have to do whatever we judge necessary to continue to help the money market to function as well as possible.

That does not have any impact on any possible increase in MRO rates down the road, in particular three years from now.

And, it is also very important for us to maintain confidence as much as possible, because confidence is the key ingredient at the moment.

On your second point, we have mentioned what was, in the eyes of the Governing Council, the appropriate way to respond to a possible need to increase capital and, of course, we expect all parties concerned, including governments and public authorities, to take that into account when the stress tests are published.

I would only like to add that at the end of the year there will be a number of operations that are possible today which will no longer be possible.

So my general advice is to have policies that are as sound as possible.

But we have no particular message in this respect apart from saying that it is in the interest of all countries concerned to have the soundest and wisest possible policy both on the fiscal side and the monetary side.

I would say that we permanently encourage Bulgaria to have the best possible control over inflation and over the other elements that characterise the present pace of the real economy in Bulgaria, and the financial and monetary economy.

As regards your second question on the statement of the Heads of State and Government I would like to say that I consider it to be a workable statement that would -- in case it is needed -- make it possible to have joint efforts -- which are not subsidies, but loans without any element of subsidisation.

The start of the activation of the possible loans is, as far as I understand, in the hands of the Greek government itself.

And we are, as you know, working actively on that in the Basel Committee, in the Financial Stability Board, in order to be as sure as possible that we draw all the lessons from the present crisis.

We 've said this on all possible occasions, because it 's true.

And now we are at the lower bound, where technical adjustments are not going to be possible any longer.

It is good to enter when you are as fit as possible.

This is considered by us as important, enlightening and as something which allows us to take the wisest possible decision on the basis of this binocular approach that we are very attached to.

We have the same vision of the monetary analysis as being deep, broad, as aiming at having as profound an understanding as possible of the various dynamics that are inside the various components, the sectoral breakdown and the counterparts.

Of particular importance are the commitments undertaken, and I have mentioned that in the introductory statement: delivering on their fiscal policy, the improvement of governance and of the surveillance of various countries, the re-affirmation that they will all honour their signatures and the flexibility that they have decided upon regarding the EFSF and the ESM, given the various areas where they have decided to create additional capacity, including interventions on the secondary market through the EFSF which should, in our view, become operational as soon as possible.

A lot of things are being done but it is our duty to encourage all participants, including the private sector, to be as active as possible in doing a good job in this respect.

What we are doing together, the central bank constituency on the one hand, the banking supervisory authorities on the other hand, as well as the industry, is to be done as seriously as possible to weather the adjustment when shocks materialise.

And we have to remain particularly vigilant as regards possible second-round effects.

We are committed to it because it is required by European law and also because, in our opinion, it is good for the economy of the euro area, for the European Union and for the best possible functioning of the level playing field in this sector.

That being said, whatever the national arrangement, we are strongly in favour of the closest possible cooperation and coordination between banking supervisors.

On the first point, I have to tell you that the Governing Council of the ECB is pursuing its own responsibility as clearly as possible.

There is no reason to be specific as far as further non-standard measures are concerned because the other part of the guidance is that the relevant committees should examine the other possible measures.

I think that this indicates as clearly as possible the Governing Council 's position.

I repeat what I just said about the SMP, which is ongoing and which is observed closely by the markets: it is designed to permit the best possible transmission of our monetary policy under the present circumstances.

I have been asking for a" quantum leap '' on behalf of the Governing Council, in order for both the Stability and Growth Pact itself, which monitors fiscal policies, and for macro policy surveillance, the surveillance of competitive indicators, the surveillance of imbalances to be given a legal basis and to be as strong as possible.

But certainly, those countries which have a weak budget position and low growth and lack of structural reforms will be, certainly, more affected than others by a possible increase in interest rates.

We have discussed possible reductions in interest rates, but the Governing Council in its entirety decided that this was not the time, and that 's it.

You know that our main message is that we do not want second-round effects, and when we say second-round effects, we are addressing two major possible destabilisations.

As regards your second question as you know, because we published it -- and we were very prompt to publish it because we wanted to have this bank lending survey as soon as possible -- we observed that there was a tightening of credit conditions.

The worst possible attitude would be to say that, now that we can see that the financial markets are functioning much better again, now that we can see that asset prices are going up again, now that we can see that we have a number of indications of our returning to normal, it can be" business as usual '' again.

I would say that each of us, each member of the Governing Council, very carefully weighed up the advantages and disadvantages with regard to every possible decision.

It is urgent, and we are totally determined at the ECB and in the Eurosystem to contribute as effectively as possible to this necessary improved resilience of the financial system.

We discussed the fundamentals as far as possible, starting very clearly with what we considered ourselves to be in the best interest of all parties concerned.

When you try to understand what that means, you will see that we extract all possible information from the financial markets.

The overall decisions and orientations, taken by the G20 have made it possible, on the basis of a broad consensus at the global level, to avoid the materialisation of these threats that were extremely dangerous.

We hope to be able to come up with a proposal shortly, as the Heads of State have asked us to do as soon as possible after the ratification of the Nice Treaty.

So, it 's a good methodology -- that does not exclude that if it is impossible for the private sector to deliver, or if the delivery is not convincing or if, again, it is impossible to have a consensus of the market participants and of the private sector entities, then, of course, it is always possible, and in some cases, very important and useful, to embark on regulation, that 's clear.

If we were all in Europe behaving as properly as possible according to the rules, then the functioning of the automatic stabilisers would be very substantial.

I give you a rendez-vous for future possible decisions when the time comes.

This is something which has to be as much as possible resolutely improved.

And finally, markets have to be as transparent and as competitive as possible.

Confidence will be hampered and what we want right now is to improve confidence as much as possible.

As you know, we do everything that we can for the supply of credit to be as forthcoming as possible.

Not only our monetary policy and interest rates, but also the non-standard measures that we have decided upon and which have been extremely bold, are aiming at permitting the banking sector to continue to finance as well as possible the private sector and the economy in general.

We said clearly last time that it was possible but not certain that we would increase rates today.

I do n't underestimate that when I said clearly on behalf of the Governing Council that it was possible to increase rates today, it was considered an important message.

Everybody sees that we do all we can by being faithful to our mandate to have an environment which would be as favourable as possible to growth.

So I would say that we have to look at it from all possible angles to be sure that our final judgement is well founded That is exactly the reverse of when the prices are going up.

That is, otherwise we can provide as much credit as possible.

I think that it is clear that as far as structural reforms -- reforms in general -- are concerned, we all have to explain as well as possible, to convince the people of Europe that everybody would be better off with the reforms.

Our colleagues -LRB- including from Romania and Bulgaria as observers -RRB- are represented in all our committees in the ESCB, and we consider it our duty to facilitate things in the best possible fashion.

It represents a transformation, which of course from time to time encounters real difficulties ; and as you know we are doing all that we can to pave the way for the best possible outcome.

We know that we have important responsibilities and we know that with a great level of responsibility comes possible criticism, possible observations of any sort.

All this is important and we work a lot to understand as well as possible the dynamics of the counterparts, the dynamics of the components that are making up M3 in a context which is very peculiar, in particular with this low level of long-term rates the flatness in the yield curve being the mark of the present situation.

These non-standard measures are there to allow the transmission of the monetary policy of the ECB to be as effective as possible in the circumstances.

As regards your first question on the ECB, let me only say that the issue of a possible insolvency of the ECB is absurd.

I refer also to the G7 Communiqué from Washington which is calling for all partners to be as responsible as possible.

I have mentioned a possible increase of oil and commodity prices.

It is not something which, in our opinion, fits with the idea of encouraging the best behaviour possible.

Second, the SMP is ongoing, and we do expect that the EFSF will be up and running as soon as possible, with the capacity to intervene on the secondary market, which is one of the very important decisions of 21 July.

But everything is possible.

The non-standard measures are there to help the transmission of the standard measures in the best way possible in the circumstances.

And not surprisingly, for the first time since World War II, the crisis is very much concentrated in the advanced economies -- the United States, Japan, Europe -- and we all have to try to adjust in the best fashion possible.

Second, I said very clearly that banks should reinforce their capital base, and we rely on the EBA and the decisions taken at the level of Europe as a whole to ensure that they do that in the best fashion possible.

Regarding your second question, fiscal consolidation makes it possible to regain the appropriate creditworthiness and reinforces confidence by clearly demonstrating to economic agents, savers and investors that things are going in the right direction.

First, when the EFSF was decided on, we did indeed call on governments to leverage the EFSF as much as possible in order to ensure financial stability.

I was referring to the domestic measures that the government has to take in order to continue the adjustment in the best fashion possible, and I do not have any other comments on that.

On the first point, as you know, we are as comprehensive as possible in our economic analysis.

So we will continue to look at it but we are very mindful of the need for our money market to function as well as possible.

On the stress tests, I would confirm that the ECB has been calling for the stress test to be as well-conducted as possible, not only at the level of macro stress tests, as had been envisaged since a long period of time, but also at the level of individual banks.

I would say that as orderly and smooth evolutions as possible are certainly welcome in this respect.

We synthesise our understanding of what is happening, we examine various models of the economy and of the behaviour of the euro area economy to have as robust analysis as possible, and then we make up our mind on the basis of all this information.

We will have just the right environment to be as cool as possible in judging the situation !

Second, profits, in our opinion, should serve not to distribute enormous amounts of dividends to shareholders ; not to distribute enormous amounts of bonuses, packages, remunerations to the members of these institutions ; but to reinforce their balance sheets, to reinforce their own position as financial institutions that have a role to play, which is to finance the real economy as actively as possible.

And such peer assessment, peer judgement and peer decisions -- including decisions on possible sanctions -- are at the heart of the Stability and Growth Pact.

I mentioned additional increases in prices -- I am not mentioning past increases that have already been decided and fully incorporated in our own projections, but rather the possible future increases in administrative prices and indirect taxes -- and I mentioned the traditional -- in this press conference -- second-round effects, in particular wages and salaries increases.

On the fiscal side, I would only say that we have always told our interlocutors, the Commission and the executive branches, that in delivering the appropriate fiscal position required by the Stability and Growth Pact, in an overwhelming majority of cases, to be as sound and reasonable as possible on the expenditure side is the first best option.

Since 1 January 1999 we have had the same collateral policy, which we have not changed, and we are certainly eager to have the best possible collateral checking at all times.

And, as you know, the European concept is a decentralised concept whereby the national authorities have their responsibility and we have ourselves a particular mandate to pave the way for the best possible functioning of that system.

So I am looking forward to our continued cooperation ; and, of course, within the Eurosystem, the Banca d'Italia is a very important member of the team, and we will continue to maintain the closest possible relationship with this institution, in line with the team spirit which characterises the Eurosystem.

I am sure that this will be done as speedily as possible.

I was very happy to congratulate him when he was nominated and then appointed, and I am sure that we will continue to have the closest possible relationship on both sides of the Atlantic.

We want to be as comprehensive as possible in the economic analysis.

But the fact that we said it was appropriate a month ago did not mean that a month ago -- and I have to say this because it is important that our dialogue is as clear as possible -- we were excluding anything in the months to come.

We wanted to be as clear as possible about our present analysis, and that is the reason why we were more explicit.

We are encouraging a solution that goes as far as possible in reinforcing governance, without, because it is the rule of the game at the moment, necessitating a change to the Treaty.

We have called for this to be done in the best, most professional fashion possible.

On your last question, when a country is determined to practise cost monitoring in the best fashion possible in order to regain competitiveness -LRB- and do n't forget that at the start of the euro Germany had a current account deficit and a low level of competitiveness considerably hampered by reunification -RRB-, when a country is very attentive to its costs, when nominal costs and prices evolve in a sound and orderly manner over time, you obtain the ensuring benefits, and the benefits are growth, as well as diminishing unemployment and increased employment.

First question: I have already explained that we wanted to be as clear as possible.

Then you are financing the adjustment with a view to going back to normal creditworthiness and normal market financing as soon as possible thanks to the rigorous implementation of the adjustment programme.

So you have a possible exception to the rule at the global level.

And we feel very much akin to those central banks that want to incorporate all possible elements.

I have already mentioned that we were as comprehensive as possible.

Again, what we do is analyse, as comprehensively as possible, every month -- as we did this month -- the overall situation.

Again, I explain that we were in a position to analyse the situation as comprehensively as possible.

This is not to say that we are living in the best of the worlds possible.

So, we are giving our own advice to governments as clearly as possible on the subject of private sector involvement, namely:" Do n't depart from the global doctrine.

We would explain candidly -- as transparently as possible -- our monetary policy.

In all continental economies, including the United States, it is possible for some states to be booming while others have a much lower level of growth.

And we are pragmatic and keep as close to the facts and figures as possible.

We call in any case for an evolution that would be as smooth as possible.

But the encouragement I can give is to say: be ahead of the curve and implement everything as rapidly as possible.

As regards the advances towards a single market -- a real single market -- for financial services, we are as you know very much in favour of advancing in that direction as far as possible.

That being said, we are not calling for changes in the overall framework that exists today, and where the Treaty gives responsibility to national authorities, what we do is to call on those national authorities to engage in as close and intimate cooperation and coordination as possible.

So, we work and we will give our opinion as soon as possible.

When I compare the order of magnitude of the theoretical overall potential eligible collateral, which is in the order of $ 13 trillion, and the liquidity that is provided, which is a little over $ 500 billion and oscillates between $ 530 billion and $ 550 billion, clearly it is possible to obtain liquidity which is a multiple of what we are supplying.

My second observation is, as I said in the introductory remarks -- there is a paragraph on banks -- that we consider it to be absolutely essential that banks are as solid as possible.

This makes possible what we have today -- a fantastic asset of the European economy -- namely a financial environment which is very favourable, with medium and long-term interest rates that are very favourable and -- I would say -- are" crystallising '' the performance of the best legacy currencies prior to the euro.

It is a phenomenon which is very far-reaching and calls for us to be alert and act as soundly as possible in these circumstances.

Our reasoning in this regard was very simple: do everything possible to improve your creditworthiness, meaning of the authorities and of the banking sector.

I do n't say it is certain, I say it is possible.

That is the situation which we are in: it is not certain, it is possible.

We ourselves would call for all possible measures to be taken to save energy.

I 'm quite surprised, frankly, by the attention that a possible early exit of the programme receives, when we 've been in this programme only a month, and like a colleague of ours said today, during the discussion in the Governing Council, he said, you know, he has run several marathons, it 's like asking yourself, after 1 km, are we going to finish this marathon?

We consider that this framework has served us very well and, of course, we apply this collateral framework as efficiently and effectively as possible.

Well, I 'll quickly and readily answer the second question immediately, saying that I do n't even want to contemplate that, and based on the Greek government leaders ' statements, this option is not contemplated by themselves as well, so I 'm not ready to discuss any possible situation like that.

It is not certain ; it is possible.

Our primary mandate is price stability and we think that if we achieve this objective in the medium term with all our necessary instruments we really contribute in the best possible way to growth.

In any event the ECB will closely monitor this possible strategic response by issuers.

A change in the monetary policy stance is possible at any moment when our analysis -- which is based on a well-defined monetary policy strategy, as you all know -- leads us to decide on such a change - war or no war.

We hope to underscore public confidence by our actions and by an appropriate policy to preserve the people 's confidence in their currency to the maximum extent possible.

We apply a plan, and the plan is, as soon as possible, to get the country concerned into a situation in which it has a primary surplus in its own fiscal position.

Let me add one thing about the possible changes, possible cuts in the rate on the deposit facility: the issue there is how come we announced a year ago that that was practically the zero lower bound and now we 're thinking of going into further negative territory?

On the first question, as always, we examine all pros and cons, all assets and liabilities associated with the possible decisions, the possible decisions being increasing rates or maintaining rates as they were.

The ECB commissioned Promontory Financial Group to conduct a study on a possible organisation of the future supervisory function.

So, I agree with you that separation is essential, but frankly I do n't agree with you about MPS and the future SSM being linked in any possible way other than me being former governor of Banca d'Italia and now being president of the ECB.

On your first question, the answer is no, because basically, and this also holds for all the other possible questions on this issue, negotiations are proceeding at this point in time, so there is no point in me commenting on different aspects of these negotiations and different proposals.

On the second point I will only say that our position is crystal clear: we really think that implementing structural reforms all over the euro area will make it possible to elevate the level of the growth potential of the euro area, and this elevation of the growth potential is necessary if we want to have, again, more growth and more job creation.

So we call on the whole of the euro area -- not any one economy in particular, but the whole of the euro area -- to reinforce competition, having competition which is as fierce as possible, in the interests of consumers, in the interests of the economy as part of the completion of the Single Market, and of course in the interests of avoiding second-round effects.

We considered all possible factors that are guiding our own judgement on the monetary policy stance.

And today we confirmed that 4% is what we think is appropriate, but we have also the responsibility of having the money market functioning as properly as possible at that level.

So we have a joint interest in this convergence exercise being as successful as possible and as well checked as possible.

But, simultaneously, I would call on all partners to be as responsible as possible, for the producers to be as responsible as possible, as well as the consumers.

We will exert it as well as possible.

As regards the organisation of the executive branches, I see very favourably the best possible organisation of the Eurogroup.

Your first question was:" do I regard it as possible that the exchange rate would reach the level of one to one to the US dollar? ''

We judge the pros and cons of all possible action.

Now, let me say the following: any kind of comments from my side about a possible change of our own mandate is totally out of the question.

We were not in exactly the same environment in terms of oil prices, with all the effects that oil prices have on both growth and possible future inflation.

What the EU Council has done in the Nice Agreement is to include an enabling clause which makes it possible, after the Nice Treaty has been ratified, to make quick changes if necessary.

Well, it is not exactly within the competencies of the European Central Bank, but I fully sympathise with all the efforts being made at the moment in the context of the World Trade Organisation to try to prevent, to the maximum extent possible, the world from slipping back into an era of protectionism.

It is good to look at all ideas on possible initiatives, but I have no particular comment at this stage.

We are telling all countries, without exception, to implement as completely and convincingly as possible all the measures necessary for them to attain the fiscal goals that have been fixed for next year.

I trust that we will remain in permanent contact with the authorities in question, namely the governments, so that they can demonstrate as clearly as possible that they are living up to their own responsibilities.

All that has been asked of us is to come up with a proposal, if necessary -- that has also to be judged -- to come up with a proposal as soon as possible after the ratification of the Nice Treaty.

As regards our own framework and the possible decisions that we will take, bearing in mind what we have always said, which I repeated today on behalf of the Governing Council, the non-standard measures that we have taken are, by definition, of a transitory nature.

We address the aspects that relate to liquidity and funding, and we can not and do not want at all to replace either the fiscal actions of the governments or to address a possible lack of capital held by the banks.

But I can assure you that there was the maximum possible degree of consensus of today 's decision that is imaginable.

However, it is not to say that we are living in the best of all possible worlds.

It is designed in particular to permit the monetary policy transmission channel to function as well as possible.

This is not a new message -- it is a message that the ECB constantly conveys through all possible channels, including, of course, directly to Ministers of Finance when the Vice-President and I participate in the Eurogroup meetings.

We are looking at all possible options, we are aware of the importance of this and we are also aware of what we can do and what we can not do.

Finally the private sector involvement that everybody would prefer would be to go back as soon as possible to spontaneous private sector market financing.

The aim of the programme, as I have already said several times, is to help the monetary policy transmission mechanism to function as correctly as possible.

Let 's not forget that the countries concerned have the immense responsibility to cope with their own problems and demonstrate as clearly as possible to all partners and observers that the programme is working.

{'possibly (112)', 'believe (492)'}

And I believe that in my statement of two days ago and in today 's statement, which is basically a statement by the Governing Council, I have been as open and transparent and forward-looking as I possibly can be.

{'possibly (112)', 'maybe (396)'}

Maybe that will be final, maybe we will need another discussion two weeks later -- we are rather flexible on that -- but I can assure you that I will be in a position to answer all your questions, possibly before the end of May.

{'possibly (112)', 'sudden (31)', 'volatility (407)'}

When you see that the bid-ask spreads reveal a profound lack of liquidity in certain markets, when you see that levels of volatility are abnormally high and when you see that you have the inversion of the yield curves all of a sudden, which then disappears right after an announcement, then you say that you have a reasonable and possibly unacceptable level of fragmentation in the euro area.

{'possibly (112)'}

And inflation remains very low, will possibly be negative in the coming months.

So this will say that interest rates will stay low for long, possibly longer than previously foreseen.

An additional factor is that we are seeing, in particular, a drastic decline in the circulation of large-denomination Deutsche Mark -LRB- and Guilder -RRB- banknotes coming possibly from the black economy.

Until the end of the year we expect inflation to hover close to or possibly slightly above 2%, in 2004 and 2005 to fall below 2%.

Also, what is most important in this latest agreement is the medium-term commitment to possibly providing new money if Greece were to have a primary surplus, but for some reason things were not going well, and not because of a lack of compliance with the programme.

In this present situation it 's lower because of supply effects and because demand from China and possibly other emerging market economies is lower.

We still have a lot of work to do on that front, but we are possibly starting to see the first signs that this significant improvement in confidence and in interest rates is finding its way through to the economy.

And this certainly involves a revision of existing personal and corporate bankruptcy legislation, but also other actions, and possibly also having a public backstop when at times of exceptional circumstances the NPL market is not well functioning, and certainly we want to avoid fire sales.

We do not pronounce on whether or not it should be the concept applied in Italy, Spain, France or possibly Germany or, tomorrow, in other countries in the European Union, but only that there should be a close relationship.

Yes, we do intend to be as open and transparent as we possibly can.

Namely, based on tax cuts, current government expenditure control, and possibly public investment with a high return, and accompanied by the structural reforms which will make potential output grow.

So lower taxes, lower current expenditure, and possibly higher government investment, government investment expenditure, public investment expenditure.

Another one is to sort of motivate the business managers to keep vacancies open and possibly until the objective is reached.

There is a list of various options, which you can actually find in our previous press conferences or in the ECB bulletin ; that will be studied, explored, reviewed and possibly utilised if needed for a formal decision.

Regarding the level of the second LTRO the specialists in this field say that it should be substantial and possibly around the level of the previous one.

So there is possibly room for manoeuvre there.

We have already conducted two LTROs, which have prevented more serious credit crunches and possibly more serious disruptions to the financial and banking sectors.

We see that headline inflation will stay low for a protracted period of time, although as I just said in the introductory statement, we expect some pick-up, due mostly to base effects and possibly projections of higher oil prices.

And to the extent that these conditions change and possibly worsen, we will have to adjust our QE programme or in general our monetary policy stance.

It is quite obvious that we can not afford to have our own separate legislations ; we will eventually have to converge on one rule for the euro area, and possibly for the European Union.

It is in our interests to be as open and transparent as we possibly can and are capable of being.

In the light of the changes to the shareholders ' composition, the election procedure for the members of the Board of Directors -LRB- the" Consiglio Superiore '' -RRB- should be clarified and possibly simplified.

{'precaution (1)'}

They simply increased their collateral for the future as a precaution.

{'precautionary (23)', 'possibility (303)'}

It was basically the common view that in addition to the precautionary programme you also have the possibility of a full macroeconomic adjustment programme, and I would consider that the two forms have broad conditionality and require involvement of all the other euro area governments.

{'precautionary (23)'}

There is also a precautionary consideration here.

The ECB and the other institutions -- the IMF and the Commission -- would say that it would certainly be useful to have a precautionary programme in place, although it is also true to say that the success has been quite significant.

They know they will have to have in place either a full EFSF/ESM macroeconomic adjustment programme or a precautionary programme.

{'predict (30)', 'risk (3278)'}

Incidentally, we have not seen any of the awful, terrible risks that were predicted at the time.

{'predict (30)'}

So we are not in a position to predict precisely when we will reach the magic 2%.

But the answer to the first point: it 's hard to predict.

But then, as Mr. Greenspan used to say, it is very difficult to predict a bubble.

I have been invited by Jean-Claude Juncker to participate in the Eurogroup meeting and I do not want to predict what will be said there.

As regards your second question, I will not comment in any respect on what the market is predicting at a certain distance from now.

When making a judgement on growth, you can see that all institutions are predicting growth for next year that would obviously be quite flattering.

The European Commission, the IMF and the OECD predict growth in the euro area at 2% or more.

But I am not a prophet and I can not predict precisely when.

Again, before the euro was set up nobody was predicting that we would be as credible as the most credible central banks.

But what I can say is that it 's 1.4%, so it 's lower than previously predicted.

And I am not sure that it is exactly appropriate in the present period: first of all we have a number of other indicators that are also supposed to predict future episodes in the cycle and they are not at all giving the same indications.

How this is going to affect their business decisions or their convenience decisions is very hard to predict.

I do n't want to predict what is likely or not likely to be decided tomorrow by the European Commission.

It will undoubtedly be discussed at one of the forthcoming meetings, but what the result of that discussion will be, I can not predict.

{'predictability (14)', 'could (2094)', 'perhaps (538)'}

On predictability, we were very proud to be one of the most predictable central banks of the world, perhaps I could say" ex aequo '' with a great sister institution -- perhaps the most predictable -- and we will continue to be highly predictable.

{'predictability (14)', 'could (2094)'}

As regards your first question, I commented that I would attribute predictability to the wisdom and lucidity of observers, but I never comment on immediate reactions that the introductory statement could trigger in the market.

{'predictability (14)'}

The predictability is to be attributed to the extreme acuteness and lucidity of the observers.

We consider that, unless there are exceptional circumstances, a reasonable level of predictability is not to be rejected.

But, at this stage and in the present circumstances, I think the rather high level of predictability that we have as regards decisions that are taken on the very day of the meeting -- is appropriate for us.

... no, I am not sure it is an increase in predictability It is an implementation of predictability.

Again, predictability for us lies in the fact that, at the moment of the decision of the Governing Council, surprises have been extremely rare -- and that will certainly continue in my opinion.

But again, predictability does not mean that we will pre-commit in the medium run.

{'prediction (7)', 'probably (249)'}

We are entirely pragmatic, and predictions of the future prices of commodities are probably the most difficult exercise you can imagine.

{'prediction (7)'}

And that would be totally independent from the long medium-term prediction by the market of what is likely to happen in the economies concerned.

As regards your second question on our forecast at this stage, I would not change in any respect the predictions that we made last time.

{'predictive (4)', 'seem (653)'}

But I would say that it seems to me that there are a number of economists who are concentrating only on the predictive capacity over the cycle of the slope of the yield curve.

{'predictor (10)', 'possibility (303)'}

We also have to recognise, even if we do not have any other objective possibilities but to take future prices in account that these future prices are not a good predictor.

{'predictor (10)'}

Of course, this does not mean that the futures market is a good predictor.

And we have particular difficult - as you know - because the futures market for instance is not a good predictor.

It is therefore very misleading to trust that core inflation -LRB- of which there are various definitions -RRB- is always a good predictor.

However, there are a lot of cases where core inflation is not a good predictor.

There are cases where core inflation is a good predictor.

In the introductory remark, we mentioned the fact that, from time to time, we hear voices mentioning that core inflation -- that is, their definition of core inflation -- is the best predictor of future inflation.

A good predictor of inflation tomorrow is what our definition of price stability is.

It is not a good predictor for inflation tomorrow.

It would be abnormal precisely to take into account inflation today as if it was a good predictor of inflation tomorrow.

{'preliminarily (2)'}

We know, preliminarily, what the Swiss authorities intend to do, but I would like to emphasise that the Swiss have never announced either when they would start or when they would end.

{'preliminary (37)', 'may (1031)'}

If I refer to the most recent surveys of consumer and industrial confidence, they have at least stopped falling and there are first, albeit very preliminary, signs that we may have reached the bottom and that confidence may be returning, at last.

{'preliminary (37)', 'seem (653)', 'cautious (120)'}

All I can say is that we have had some kind of first hint, but I am very cautious and prudent because we do not have the survey itself yet, although we have some preliminary sentiments which were given and which seem to confirm that there is an ongoing increase in the net tightening of credit, I would say, both for loans to enterprises and for housing loans to households.

{'preliminary (37)'}

Let me make two preliminary observations in this respect.

I should say just before you ask me other questions, the discussion was very, very preliminary and was meant to ask questions about the different scenarios and what the transmission channels or different scenarios was rather than expressing policy options or policy preferences.

So the discussions about different scenarios concerned the length of the programme, the size of the monthly flows and so it was, as I said, a very preliminary discussion mostly geared to ask questions.

That was the very preliminary, provisional information we were given this morning.

But before taking action we need more conclusive evidence confirming our preliminary assessment.

We are in a quite preliminary stage of our analysis so what I 'm going to tell today is just very provisional.

Again, as I said, these are preliminary observations and we have to be very precise, very professional in such matters, which are highly technical.

So, within that context, the IMF has publicly stated that their preliminary view is" that the Bank of Italy took timely and appropriate action, within the limits of the legal framework, to address problems at MPS.

Again, I must be clear on the fact that what I am mentioning are only provisional and preliminary observations.

But for the moment our preliminary position is what I have said it is.

As I said, our present position, which is only a preliminary, provisional position, because we are waiting for the official proposal of the Commission -- and for that of the Council, which will decide as a last resort -- is that our preliminary, provisional observations are fully in line with what we have said before.

We, of course, also compare those forecasts with our internal preliminary forecasts, which will ultimately be published in the course of next year, as I have often announced.

By the way, let me say that our thinking is very much in a preliminary stage, given the complexity of the issue, so we have not reached any conclusion either way.

{'presumably (14)', 'could (2094)'}

Presumably we will talk about exchange rates and certain regimes that one could envisage for exchange rates.

{'presumably (14)', 'unexpectedly (8)', 'almost (134)'}

But what we do see - as far as inflation is concerned, insofar as we pay attention to current developments - is that inflation is slowly creeping up, but - and not unexpectedly - due almost exclusively to the increase in oil prices which is working its way through into consumer prices and which will presumably continue to work its way through.

{'presumably (14)'}

We are looking of course very carefully because it 's different to deal with presumably the new NPLs and deal with targets for the whole stock.

{'presume (6)'}

Those higher inflationary expectations, as augmented, would be incorporated in market rates, and then this" good advice '' would lead to a result which would be exactly the contrary of the result which is hoped for, I presume.

Again, you can not eliminate a failure, eliminate a drama, but you can not presume that it is a normal situation to have this kind of private sector involvement.

{'presumption (2)'}

But as you know, it is also in the regulations of the Pact that if the recession is over minus 0.75% this can create a presumption that the ECOFIN Council can consider this as a special circumstance.

As regards the so-called" global doctrine '', the presumption of the international community is that if you have a particular country problem, you do what is necessary to have a very, very strong and credible conditionality which is part of the global doctrine with the adjustment programme negotiated by the IMF.

{'probability (40)', 'cautious (120)'}

So, I think we have to remain cautious, even if there is a probability that we will have confirmation over the last half of this year that we are in positive territory.

{'probability (40)'}

At the present time we do not see a high probability of deflation.

We do not know what will be or is the law of probability of future events.

And I mentioned both September and October because, according to all that I have seen, there are certain probabilities that are attached to September and other probabilities that are attached to October, and, on behalf of the Governing Council, I do not want to change in any respect what you saw this morning in the various computations.

I refer to the probability that one would extract, oneself, with very sophisticated tools from the present market, and nothing else.

If I read the report correctly, he referred to a probability.

It 's a question of appreciation of probability.

And this time, I am telling you again exactly this: we are not pre-committed, we will do what will be necessary and I even went a little bit further in saying that I did n't see the necessity to change present expectations as regards probabilities as regards the future.

I would say on the first point that my reading of the market rates and of the expectations that can be extracted from the money market was that they saw a probability of 50% for a decrease of 50 basis points and 100% for a decrease of at least 25 basis points.

I would say that the current suggestions regarding the high probability of an increase of rates in our next meeting do not correspond to the present sentiment of the Governing Council.

I accept that there is, de facto, a great signalling value in the word" vigilance '', although I always said -- and we proved it in the last months -- that it did not mean that there was a probability of 100% that we would do something, because I always accompany these words with" we are not pre-committed ''.

We are free to do what we would judge appropriate when the time comes, but at the present moment, I do n't want to comment any more on probabilities.

There is a certain probability that the confirmation provided by these better hard data and soft data will permit us to be a little bit more optimistic.

Now, as I said, the probability of an expectation that will actually materialise into lower level has gone down, given what I just said about the rest, about the progress we 've made.

Let me also add that all the evidence we have about probability of deflation measures, for example, they have not increased.

{'probable (7)', 'appear (202)'}

Very specifically, in the English translation in the Parliament the translators used the word" probable '' in a certain context, whereas the word" probable '' did not appear in the French text.

{'probable (7)'}

So we think it 's certainly less probable.

And the lesson of the first oil shock was precisely that because there were a number of probable errors in the diagnosis of the situation, in Europe you can date from the first oil shock the start of much lower growth and mass unemployment.

{'probably (249)', 'believe (492)'}

As regards the European economy today -- and this is the assessment not only of the ECB, but also of other authorities, and here I am referring to the Lisbon consensus -- clearly we believe that more efforts being made in research and development, in technology, in creativity, innovation and so forth, would permit more rapid progress in productivity and would, therefore, increase the growth potential, which -- as I have said -- is probably one of the main challenges that we have here in Europe today.

I believe that they were right, and I take it that this is probably what the Minister of Finance was alluding to.

I believe that we will have a good second quarter and that we will have a third quarter that will probably be better than previously expected.

{'probably (249)', 'cautious (120)'}

I have always said that we have to be cautious and prudent, and that we probably have a bumpy road ahead of us.

{'probably (249)', 'likelihood (25)'}

So I warn you that there is the likelihood, as far as we understand the consequences and, I would say, the passing-through of the oil price impact that we will probably see.

{'probably (249)', 'may (1031)'}

We, of course, also have the past appreciation of the euro, which -- as I have also mentioned -- has probably contributed to the fact that the impact may have been smaller than it would otherwise have been.

{'probably (249)', 'perhaps (538)', 'volatility (407)'}

As regards carry trade at the global level, it is clear that we do have that phenomenon -- perhaps more visibly for other currencies than for ours -- and it is true that it is a phenomenon that is probably also triggered, or fostered, by the low level of volatility that we are currently observing in the global financial markets.

{'probably (249)', 'perhaps (538)'}

You know that our present action, according to the mainstream academic research, would probably start having real influence over a period of perhaps 18 months, perhaps two years, and will continue to have influence over a longer period of time.

We all agree on the necessity of these structural reforms and the problem is to implement those structural reforms, which is being done in some countries before your eyes, and before the eyes of the Governing Council, but which is obviously not very easy because of the sentiment of perhaps part of the population because of the fact that public opinion in general probably has yet to understand why it would be extremely important to make those reforms if we want growth, job creation and diminishing unemployment.

{'probably (249)', 'possibility (303)'}

And you probably know that we 've discussed for some time the possibility of having a tiering system, so an exemption system for this operation, and in the end the Governing Council decided not to, exactly for the purpose of not signalling that we can go as low as we want on this.

{'probably (249)', 'probability (40)'}

Then you can go back to exactly what I said when you asked and give some probability to which one of the three is probably the surer to happen.

{'probably (249)', 'risk (3278)', 'volatility (407)'}

We know that this will not last for ever and I have myself said a number of times that I trust that part of the phenomena we are observing today -- the low level of spreads, the low level of volatility, the low level of risk premia -- are probably characteristic of a transitory period in the financial market, corresponding to an under-appreciation of risks in general.

{'probably (249)', 'risk (3278)'}

So, you have a high level of the risk appetite in all of the financial markets, and that risk appetite probably wo n't last forever either.

But there are reasons for that: foreign demand, the very low level of short and medium-term interest rates, and the extraordinary improvement in the risk environment, which if it is maintained, is probably going to be the main factor that we can count on.

So there is a danger, there is a risk, but it is not at all clear that debt issuers will actually move in this direction because it has a cost, namely of unbalancing a maturity structure which was probably balanced to begin with and has taken many years to achieve.

{'probably (249)', 'seem (653)'}

But more generally it seems to me that verbal discipline is probably appropriate in the present circumstances and I am speaking of the euro area as a whole.

{'probably (249)', 'volatility (407)'}

I expect that at the end of the year and beginning of next year, when we have the figures for December, and then those for January, that we will probably be at a substantially higher level, because we have those base effects, and a number of phenomena that create volatility in this domain.

{'probably (249)'}

You probably refer partly to what we extract from index bonds and the extraction from index bonds gives figures that are a little bit over and above 2%, and this is something that we have to examine very carefully.

But attributable to this programme, it would probably take three or four quarters.

In my understanding, the relationship that the ECB has with the executive branches, in line with the provisions of the Maastricht Treaty, is probably the best organised at the global level.

And not only in that, because as you know, much of the equity, probably more than 50% of the equity of the Greek banks -- or the largest Greek banks, at least -- is formed by credits to the state.

Probably the higher term premium is one that receives attention.

First of all, some of them, probably both of them, are not in place yet, so they are not laws.

Also, when I compare some expectations on either side of the Atlantic, I see a big difference, obviously, between those expectations, and I take it that this is probably partially due to the fact that we ourselves are very clear on what our definition is.

Second, in the present framework I guess that the reasoning of the European executive branches -- I take the Council as a college -- would be that they have the European Investment Bank -LRB- EIB -RRB-, which has its own capacity to finance the European economy, which has its own capacity to borrow on its own signature, which is a European signature, and that they probably consider that the instruments exist already.

But I have noted that what is - at the moment I 'm speaking - present in the market would probably be more the first figure that you have mentioned.

It 's probably worthwhile spending a word on that.

We are seeing this already now, with the latest information, and I mentioned that we probably would have inflation over 2% in the next months to come.

These differences will probably diminish over time.

As you 've seen probably from the paper that we published together with the Bank of England, the outstanding amount of securitisations in the European Union at the end of 2013 was about $ 1.4 trillion, which is one-fifth of what 's in the US.

In fact, you probably have noticed that also there is an improvement in the data showing a negative trend for growth but less negative than it was a month ago, two months ago, three months ago and so on.

We discussed this report last weekend in Basel, and I would say the following, which probably is not going to surprise you, because it 's very much the same that other monetary policymakers in other jurisdictions have stated.

It is true that this probably will be the third year where we will miss or at least only come close to our stated objective.

Probably not ; probably there are other things if we look around.

Well, if the Governing Council had decided to define autumn as 7 September, we probably would have said that 7 September is going to be when we 'll decide.

What we are observing is that a large number of institutions, agents, investors, savers, are displaying attitudes of fear and of an absence of confidence which are probably due to a large extent to an absence of sufficient transparency.

I would myself call for increased transparency across the board as part of what we should probably do.

That is one of the differences, and I think it is probably the most important.

If you look at the euro area from a distance, you see that the fundamentals in this area are probably the strongest in the world.

It is not really technical ; it is mostly political and is probably the most important.

And this is probably the best way to address your question -- be clear, be sincere, be straight with yourself and with others.

At the same time we had data on core inflation for the first few months of this year, probably the first three months of this year, which came out weaker.

We briefly discussed it in the knowledge that the ECOFIN Council will next week probably go in the direction of taking a decision on the future co-operation of supervisory and central bank authorities.

Our mandate compels us to include in the discussion of the ministers the relevant provision in the Treaty, and we try to do that by incorporating our Banking Supervision Committee in the structure that will probably emerge.

And at the same time we have incorporated in today 's decision all available pieces of information and analyses, including the fact that we know in advance that we will have a level of projections, concerning growth in particular, that will be substantially lower than the previous staff projections and in line probably with what we see as the overall analysis based on the already known facts and figures.

And that 's going to be another factor which gradually, by the year end probably, will also contribute to this recovery.

There probably is, but not for the central bank.

We are presently at a level which some are saying is a bit lower than what they had in mind and then it will probably go upward only for the arithmetical reason that it will incorporate the most recent upward move.

Probably the bulk of these decisions will be taken in October.

It is probably unavoidable that some sentences have been tougher than others and so forth.

Finally, there is another piece of information which we do n't have yet and which is going to come out probably next week, and that 's the GDP figure for the last quarter of 2013.

And some of it is probably due to the weakness of demand and the high levels of unemployment which are still much higher in the programme, and in the stressed countries, than they are in other parts of the euro area.

But I can just confirm that this move that we expect is not an objective per se, but that what we expect to happen will probably take place in all fields.

So first of all, we know one thing: markets were more resilient, and this has probably many reasons, many causes, one of which is certainly the good work that regulators have done in the last seven, eight years to strengthen the intermediaries and the markets.

There are probably -- at the moment we speak -- more than 315 million people in the euro area including Slovenia ; and it is for these more than 315 million people that we have to deliver price stability.

On the VAT, just as the Fed has been vindicated by facts, figures and its own assessment of what was likely to be observed in the US as regards the conjuncture -- as we ourselves were vindicated in respect of our judgement at the end of 2005 and in 2006 on what was going on -- all the information we have until now more or less confirms that the reasonable assessment we had on the VAT impact on the German economy and, of course, on the economy of the euro area as a whole was probably well-founded.

But let me tell you first that to the extent that we are looking at fiscal issues, I would say that in practically all of the areas concerned, and in practically all countries, we would probably say that we judge that further efforts should be made to diminish public expenditure.

That being said, I fully accept the consensus of economists that the potential growth of all economies of the industrialised world is probably now significantly lower than the previous estimate.

It probably has to do with the phenomenon of the completely free single market in goods, services, people and capital.

The third, which is probably the most important, is to give information to the markets on how to better interpret our monetary policy decisions.

From time to time we really have to tell a number of market participants that they are probably wrong in their immediate assessment, what is the real situation in our view.

Of course, we have had recently good indications, from both hard data and soft data, and we consider that both the second quarter and probably also the third quarter are likely to be better than had been expected.

Yes, probably.

This puts us in a situation where the hump will probably be a little bit longer, and certainly bigger in terms of absolute magnitude, than what we would have had, had we not had to incorporate the two elements that I have mentioned.

Probably the best way to respond to both questions is really to give a flavour of what sort of discussion we had today.

Let me say that our communication -- well, you probably notice that as far as I myself am concerned, I abstain from making comments about markets, abstain from blaming markets, as such.

Whether they 're going to be transient, short-term movements, or whether they 're going to be persisting ; whether the markets will adjust to a different level or not: these are all questions that probably market analysts are better positioned to answer.

And if we came to the judgement that the exchange rate developments are really seriously out of line with the economic fundamentals of the various large areas in the world - Europe and the United States - then we would probably react, but I can not elaborate on that any more than I have done right now.

We trust, as I said, that investment will now probably be observed, and we trust that the growth that we have in mind, and that all observers have in mind, will be fostered by consumption, and also by investment.

Now, we 'll probably make further progress in creating what the new President of the Commission, Jean-Claude Juncker, called a ` capital markets union '.

And that 's where I said several times that it 's probably high time now to start sharing sovereignty in that area as well, taking the structural reforms area in the marketplace, product reforms, Single Market legislation, implementation and labour market reforms, under common union discipline -- in other words, trying to replicate our success in the budgetary area also in the structural reforms.

The resolution fund owns this bank and probably, and hopefully soon, will sell it back.

So there is probably a certain degree of substitution.

And if we were to restart this exercise at the level of staff at the moment, the figures would not probably be exactly the same, because a number of factors would have to be taken into account: parameters would have changed in a number of directions.

We live in a world where wisdom based on experience, the accumulation of experiences is probably more important than ever.

So, this is probably a question which should be raised at a later occasion, once we have new evidence.

The first time that a reference to stock was made was at the end of 2015 in a press conference I had where there was, I remember, a vast disappointment about the measures that the Governing Council had just decided and I pointed out that even though the measures were probably not fulfilling your expectations, we still had the stocks that were going to go up over the oncoming period of time.

We said very clearly that for some areas in the world there was probably a good reason for a certain re-balancing.

Probably, what I am telling you now is an emerging consensus amongst our own constituency of central banks.

Others, as you probably did, there would be a gradual tapering.

I remember when I said, on behalf of the Governing Council, that we would probably do something in December.

As regards the first point, I would say that it is probably normal behaviour to consider the last indication that you have received as a very important indication.

If the banks had asked for more, we would probably have a lower level of market rates.

And this has to be well understood ; to explain particularly these upside moves of the break even inflation, there are probably market elements, that are more or less associated with some kind of market corrections.

On the impact on the real economy of the significant market correction that we are observing, I would say that it 's an ongoing process which has been envisaged for a long time as being probably unavoidable and probably also in many respects a necessary correction.

The biggest challenges, again, are probably the structural reforms and the overall sustainable delivery of a good macroeconomic policy -- that is what really counts.

A number of events have been observed in the past and will probably continue to be observed in China.

And today we had a meeting, we discussed, and we have given guidance which will probably concretise certain decisions that will be taken.

And I trust that if you were to ask a question which would try to check whether it is a real question or a fancy question, you would probably see that nobody really thinks that it is a real question.

But those of you who are the most lucid will probably see that you would be wise to take everything into account when making your own judgements, including the information I have just given, which is a little bit of an underestimation in my opinion.

And the pass-through of our monetary policy decisions has probably never been as effective as it is today.

So in some sense it 's probably working, but through different channels.

Fiscal policies in several euro area countries are going to be probably less neutral than we had expected some time ago.

But I can not say what we can do about this until tonight, probably after the Eurogroup meeting.

So, with a credit claim of about 9, strong over-collateralisation would yield around four -- or three, probably -- as acceptable collateral.

On the first just let me answer, saying that there were two issues that were not discussed today -- well, probably many others -- but as far as relevant to our today 's decisions, two.

So what has been observed -- and I do n't want to speak for all the central banks, but I think that on the other side of the Atlantic you would probably observe more or less the same evolution in the turbulent episode which started in August and that we still are experiencing -- I would say is that Treasuries were less utilised by banks as collateral, and other paper, including private paper, were more utilised.

In the United States, it would probably be more of a problem for consumers.

The best summing-up I can give from the Singapore meeting and the confrontation of various analyses is that we were experiencing an extraordinary period of very robust global growth, around 5% for the fourth consecutive year probably in 07, so a very impressive episode of growth in ' 04, ' 05, ' 06, and probably ` 07.

And I can say that the third quarter will probably not be particularly flattering either.

If we did not have that needle in our compass and instead had another needle, the natural consequences would probably be that inflation expectations would go up.

So, all this basically poises the euro area for a recovery, which should be, or probably is going to be, slow, gradual but also solid, looking exactly at these fundamentals.

The interest rates of 50-year treasuries -- as I mentioned before -- which at the moment of speaking are probably around 4.9%, would be much higher with the unanchoring of inflation expectations.

At this stage, all that I can say is that, according to all information I have, in 2007 it would be probably as an average over and above 2%, but there is of course a great influence from various parameters, including the price of oil as regards headline inflation next year.

This country you are mentioning is probably a country, which is growing rapidly.

2010 is a year, at least in the view of the majority of forecasters, including our own staff -- the staff of the Eurosystem, not only the staff of the ECB -- when the first half of the year will probably be at a level of zero and the second half positive, and the year will have a profile which would pick up.

It is probably our main asset, because it served us extremely well in the period where we had very significant inflationary pressures.

I expect that in this episode of the recovery, Germany will probably have more orders and more exports, which will contribute to its growth.

There are other elements that we also have to take into consideration, elements that are probably associated with differences in various bonds liquidity, as well as the across-the-board correction that we see in spreads in financial markets in general.

It is probably because observers, economists, and market participants understand this so well that we have succeeded until now in anchoring inflationary expectations in line with our definition of price stability.

Allow me to mention what it is for other major industrialised countries: it will probably be a little bit more than 10% for the US according to the IMF, and also a little bit more than 10% for Japan, which is more than 4% above the consolidated fiscal deficit of the euro area.

`` Wrong '' is probably too strong, but certainly both ideas are very, very hard to implement, requiring us to make sure that the banks do certain things or do n't do certain things.

We also have the issue of labour productivity progress that is lower probably precisely because the single market has not been achieved in this domain.

Even before the crisis, ABSs for SME loans were very little, probably the smallest component of the ABS market, if I am not mistaken.

When we all look back at what OMT has produced, frankly when you look at the data, it 's really very hard not to state that OMT has been probably the most successful monetary policy measure undertaken in recent time.

It is also clear that a small group, a small oligopolistic structure, is not what is probably desirable at the level of global finance.

I think if we are to run the same survey now we would probably find a better number.

Well it 's probably the most difficult question I got today.

I would therefore say that one of the advantages of our present situation is that we have probably a large capacity to do much better in terms of productivity, which is one of the major goals of Europeans.

It 's clearly a very significant increase in labour supply ; however, there 's also probably a need of significant investments in this labour supply, and also to see how these public investments in knowledge, education and so on are going to be financed is also going to make a big difference.

You have seen spreads going down for Ireland much more than for probably any other country.

Other parts of this concept of financial market union, -- like everything that really entails mutualisation -- is probably more medium-term or long-term.

You probably were not born yet, but, unfortunately I remember that and Vítor does too.

At the moment I am speaking, we consider that our decision today was a good decision to take and we consider it 's probably our duty to tell you in what state of mind we are, as regards the next meeting, but we will take our decision in the next meeting on the basis of all information we have at the moment of our decision.

Also, probably one of the most important differences across the euro area is, the degree of indebtedness, both in the public sector and in the private sector, of different countries.

I do not know whether" legalistic '' kind of belittles this concept -- it is probably not the right word -- but what it is meant to say is that we are using the Treaty as our reference point for decisions in areas as important as this one and, in that sense, it is the right word to use.

Right now, the Chinese economy, even though it is mildly slowing, is probably one of the few sources of growth in the global economy.

So what we are observing, namely that there are indeed differences in economic behaviour and in inflation from country to country in our own continental economy in the euro area, is probably something natural in such a wide continental economy.

Now, if you study this very, very carefully, you will probably discover that - when you take into account all flows, not only FDI, but also portfolio flows - we are in a slightly better position than before.

And I make the point regularly here and this was probably the intention of my colleague.

First, it pays very little attention to the conclusions of academic research concerning the fact that at around 2% you probably minimise the counterproductive effects of inflation.

Probably most of the explanation is linked to that.

We will see if there is a specific demand for liquidity that is clearly related to this period, that will probably show up in the last weeks of this year and the very beginning of next year.

It would necessarily be something which will be profoundly original, because it would probably be a new type of confederation of sovereign states.

On your last question, let me say that I am really confident that the referendum will pass and that the fiscal compact will be approved, because Ireland is probably one of the programme countries that has made most progress, under conditions that have been very harsh.

Second, the euro area will probably post -- at the end of the year -- a public finance deficit in the order of magnitude of 4.5% of GDP or less, when Japan and the United States will probably be in-between 9.5% and 10%.

I wanted to make clear that we know in advance, on the basis of present information as regards the price of oil, in particular, that we would probably have a particular profile in the course of 2007, with diminishing yearly inflation rates month after month due to base effects and then a picking-up at the end of the year.

The third thing to consider is the information provided by the survey of small and medium-sized enterprises -LRB- SMEs -RRB-, which is in a sense to me probably the most important source of information.

I think in another press conference I stressed an effect which is in a sense harder to quantify, but it 's probably the most important one.

{'random (2)'}

It 's very difficult to answer about my expectation of a market reaction following kind of a random statement made by somebody who did n't have any clue or information about that.

If we have a low level of interest rates, it is not due to a random behaviour of markets ; it is because we were skilful enough to pass on the best yield curve available in the euro area before the euro, to the euro.

{'reassess (25)'}

As you know, when we clarified our monetary policy concept, which was done in 2003, we said that the reference value of 4.5%, which of course exists, was a medium-term reference value, so we would not reassess the reference value every year.

And, as we meet every month, we reassess carefully and comprehensively the situation.

This, of course, will lead us to reassess the outlook for the future.

On your second question, I just simply reiterate what I said before: I said that over the coming months, when we have more information, including new staff projections, we will be in a better position to reassess the underlying macroeconomic conditions and likely paths and so on.

As I said before, we discussed the general economic conditions and we concluded that we did n't have yet information to take decisions, and we decided, as I said, that over the coming months when we have more information, including new staff projections, we 'll be in a better position to reassess the underlying macroeconomic conditions.

Then we will certainly reassess the situation after that, and we will see whether the steps we have taken are really satisfactory, because, as I said at the beginning, we are taking this very seriously.

So we 'll reassess the monetary policy stimulus achieved, the expansion of the balance sheet and the outlook for price developments.

It says in this context, early next year, the Governing Council will reassess the monetary stimulus achieved, because we do n't want an unwanted tightening of our monetary policy stance due to a decrease in medium-term inflation expectations.

There is a lot to look at and to reassess, and to look at the medium-term outlook for inflation.

And they will lead us to reassess the prospects for reaching price stability ; currently those prospects are fairly benign.

So it is clear that we are looking at what is happening and taking into account the facts and figures and data to the extent that they are available and reassessing the situation along the lines that I have just said.

So these rules are being applied and they are being regularly reassessed as developments in the financial markets unfold.

{'reassessment (10)', 'risk (3278)', 'believe (492)'}

All this taken into account, I would say that we are -- all of us, because we were in very good agreement -- saying that we believe that we have to pave the way for some kind of orderly and smooth adjustment associated with the reassessment of risks.

{'reassessment (10)', 'risk (3278)', 'volatility (407)'}

I also said that, in circumstances that are characterised by increasing volatility and by the reassessment of a number of risks in a number of markets, it was important that the market participants, investors and authorities, keep their composure, maintain their" sangfroid ''.

{'reassessment (10)', 'risk (3278)'}

On the overall assessment of the situation on the markets, I feel that we are observing a reassessment of risks.

{'reassessment (10)'}

In as far as we already have results of such reassessments available internally at the ECB, we expect that the period of robust economic growth - i.e. growth in excess of what we would call long-term potential economic growth - will remain on the cards, so to speak.

The second point is that certainly markets are in the course -- not us, but markets -- are in the course of reassessment of the US fiscal policy.

{'reconsider (12)', 'may (1031)', 'possibly (112)', 'volatility (407)'}

The answer as far as our monetary policy is concerned, if these market developments and this heightened volatility in financial and commodity markets were to persist longer than in the short run, it may well become a factor in unwanted tightening of the financing conditions, and therefore that 's one of the reasons why, as I read before, we will review and possibly reconsider our monetary policy stance in March.

{'reconsider (12)', 'possibly (112)'}

Here I 'll read again these quite important words:" It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in early March, when the new projections will become available. '' '

So now these conditions have worsened, and I think, to respond to your question, the credibility of the ECB would be harmed if we were not ready to review and possibly reconsider our monetary policy stance when we have full information.

So that 's what we are looking at, what we are monitoring, and that 's why I said we will review and possibly reconsider our monetary policy stance.

{'reconsider (12)', 'risk (3278)'}

What I said before is that, if need be, if there were other factors which would, for example, create an unwanted tightening of monetary policy or, when we discuss growth, we said there were downside risks to growth and price stability, then we will have to review and reconsider the size, the timing, the design of the programme.

{'reconsider (12)'}

Now, what I added today is that if - indeed, also in response to the first question - if potential growth were to rise in the course of time, and if there were convincing evidence that this was happening as a result of structural reforms in the functioning of the various markets, if the potential rate of growth were thus to go higher, then that would also be a reason to reconsider our reference value.

{'revise (215)', 'almost (134)'}

And the effects that forecasts will have, which will have to be revised almost continuously, whereas we will not publish them continuously, is a normal fact of life.

{'revise (215)', 'believe (492)'}

We do believe that we will have to revise that figure downwards.

{'revise (215)', 'may (1031)', 'likelihood (25)'}

We cross-checked the two and we concluded that there was basically a weakening of the business cycle and also the likelihood that we may have to revise downwards our projections that will be presented next month.

{'revise (215)', 'might (766)', 'possibility (303)'}

I do n't exclude the possibility that in the latest review of growth potential for various European economies and for the euro area as a whole, for the European Union as a whole, we might discover that the consensus of economists goes in the direction of revising down previous estimates.

{'revise (215)'}

When I look at the projections, the changes in the growth projections for next year, which have been revised slightly downwards, are fully in line with other projections, for instance the Commission projection.

And so we are in fact revising our communication about ELA, because there 's absolutely no reason to keep things secret now, when we 're addressing a massive systemic problem, a macroeconomic problem.

We feel no need to revise our own intentions or targets.

It is something which must be significant, but we have no position of the Governing Council on a new revised level of growth potential.

We have revised absolutely nothing at this stage.

This suggestion has already been made in the past and it was examined during the discussions about revising the Stability and Growth Pact in 2004.

I quoted, in my introductory statement, a range of forecasts - effectively - and not the German ones in particular, which, if I look at the forecasts as we know them - they have not all been published yet - of the IMF, of the OECD and of other international organisations, they all revise the expected growth in the euro area and will, and they will also revise the euro area downwards.

It is likely that the figures will have to be revised slightly towards the end of this year.

All this explains why our staff has revised projections significantly upward in comparison with the June projections, not only for this year, but also for the next, because of the carry-over.

In our Eurosystem staff projections we have a large range which has been revised upwards.

But we stand ready to upgrade the strategy or to revise the strategy as needed.

And some say," Oh, you should revise it upward and go to 3% or 4%, because in this way you will elicit expectations that you will go up with your policies. ''

Some people say we should revise it downward and simply accept the fact that we 'll never reach 2%, and we should take 1% or 0%.

`` Why do n't you revise the inflation target? ''

If we are to ask what is the main source of the revised projections, I would say the main source is the change in the oil price.

Just going back also to -- well, it 's partly related to that ; going back to the previous question as well: you see, the difference in June is that in June there was no need to revise downward our projections at all.

You gave a lot of attention to the fact that the IMF had revised up global growth and euro area growth.

The short-term outlook was revised down due to lower oil prices and a weaker starting point for underlying inflation.

In particular the fact that the first quarter was much less flattering than projected by all observers and institutions, and that we already know that the new staff projections, which will be published in June, will be revised down significantly compared with our previous staff projections three months ago and will very likely be in line with the most recent projections published for 2009 growth, in particular by the Commission and the IMF.

It 's so important that the medium-term outlook for inflation was revised downward in the staff projections mainly due to the appreciation of the exchange rate, which means that we will have to take into account this element in our information set in our future policy decisions.

We had a staff projection here that basically revised downward the inflation rate by some amount based on the appreciation of the euro.

First of all, as I said today, reiterating what we said in real time -- and it is very important for me to stress that -- on 21 March, it is imperative that Member States, the European Commission and the Council of the European Union implement the revised framework in a rigorous and consistent manner conducive to prudent fiscal policies.

I can not quantify that, but you will be able to judge for yourself when next week you see our revised projections, or I should say the revised projections by the staff of the ECB and all NCBs.

And I will not be surprised if they have to be slightly revised downwards.

And we have a number of elements to substantiate that, particularly the fact that the private sector, private observers, have more or less revised upwards their overall judgement on growth in this economy, and particularly in the present year 2004.

The outlook, however, for the euro area following these developments has been, as I was saying before, revised downward, and the effect of these developments on the commodity markets is quite visible.

And so the fact that the Governing Council of the ECB always calls on Member States to stick to the revised Pact is fully backed not only by the legal consideration that the Pact is the uniting framework on which the executive branches were unanimous, but also by financial consideration and by economic consideration and, particularly, the Ricardian effect that I mentioned on behalf of the Governing Council in this Introductory Statement, namely the fact that confidence in the sustainability -- the long-term sustainability -- of the fiscal position is very important for the economy -- for the confidence of economic agents, whether households or corporate.

At the present moment, no, I can not tell you that in our judgement we have to revise the growth potential for the euro area upwards.

Incidentally, the IMF announced today that they are going to revise downward during the spring meetings their outlook for global growth.

Some are good, such as the revising up from 0.7% to 0.8% of growth in the third quarter, as I said earlier.

And you can see clearly that the staff of the ECB, have revised our growth projections slightly down for this year and down also for next year.

We have also revised upwards our inflation projections.

So we have revised our projections upwards, and the results, when they have come in, have been a little better or substantially better than what we were expecting and what international institutions were expecting.

I 've just said, by the way, that growth has been just revised from 0.5% to 0.6% in the first quarter, and so the annual growth for this year is projected to be 2% rather than 1.9%.

Certainly the outlook is being revised ; as you know, the European Commission has released its forecast, and there is a picture of a weaker economy, as I had the chance to say yesterday.

The Governing Council is expected to discuss and evaluate the revised designs of the three prize-winning competitors in the middle of November.

No decision has been taken either by the Governing Council or the Executive Board concerning these revised plans, which have not yet been submitted to the decision-making bodies.

Over the last few months the three prize-winning architects from the architectural design competition that was completed in the spring have been preparing revised plans which aim to meet fully the requirements of the ECB and to address certain recommendations of the jury of the architectural design competition.

But as I said, both the growth figures and the inflation figures had, sorry to say it, to be revised downward and not insignificantly.

You have a hard figure at a certain point in time, then one month later it is reviewed and revised and it goes up or down, and then two months later it is again revised up or down.

You can call this what you like, but I would say that these are projections that are revised downwards.

This is based on a baseline scenario that has been revised downwards as regards growth.

We opposed and expressed our grave concerns publicly in 2005 when the Stability and Growth Pact was revised.

It has been confirmed by all the international institutions, and the IMF itself is revising growth in Europe upwards.

{'risk (3278)', 'anticipate (153)', 'seem (653)'}

We said -- and it seems to me that it is a very important observation -- that we are anticipating bad news from the real economy and a further alleviation of inflationary risks.

{'risk (3278)', 'believe (492)'}

Further administered price increases are one of the risks that we are regularly quoting because we really believe that it is a threat that we have to take into account.

What we do is, we assess the situation, we make a judgement on the inflationary risks and we do exactly what we believe to be correct in order to counter those risks.

And let me say that, if inflation expectations have been correctly anchored, I believe that this was because the Governing Council is trusted to be able to avoid the materialisation of the risk of deflation in the short term.

And some of the members had, I would say, a more sanguine view of the economic situation, and others, while acknowledging that there have been improvements, on which I will say a few words later on, in the growth outlook, believed that such improvements would not warrant any change in communication as far as the balance of risks is concerned.

But at the same time, the market more or less believes that there are also risks in the other direction.

We believe that our monetary policy decisions have avoided this risk.

This is a risk that we believe needs to be mentioned in the overall balance of risks for inflation.

{'risk (3278)', 'cautious (120)'}

I was cautious, I am cautious because we have risks that have to be considered, both for growth and for inflation.

{'risk (3278)', 'could (2094)', 'may (1031)', 'somewhat (273)', 'tentative (14)', 'perhaps (538)'}

We could say that one thing, perhaps -- but one has to be very tentative in this -- one thing that may have come out of the meetings is that perhaps the risk of protectionism, trade protectionism, may have somewhat receded.

{'risk (3278)', 'differ (47)'}

Let me also add that as far as inflation or risks to inflation outlook are concerned, there were n't really differing views.

{'risk (3278)', 'may (1031)'}

Well, we all, of course, have assets and liabilities, if I may, chances and risks on the various continents, in the various big, or small, economies.

It looks more at the medium term and at the risks that may arise if a number of improvements are not pursued and if there are adverse developments in the medium or long term in, for instance, the real economy.

First of all, the Governing Council is acting in a pragmatic and flexible way to cope with risks that may materialise in this period of time.

In other words, we do not see risks to financial stability that may originate from the too low levels of interest rates at the present time.

The Governing Council has reiterated it 's this fall as the period when these decisions will be taken because the decisions are many, complex and always one naturally sort of thinks about risks that may materialise in the coming weeks or months.

We certainly are alert to the geopolitical risk that may come out of the Syrian situation and to the economic risk that may derive from the emerging market situation, which are two different things, really.

First of all, it may increase the financial stability risk, but also it causes problems for insurance companies and for other important financial market actors.

There are two considerations: Cyprus ' economy is a small economy, but the systemic risks may not be small.

That 's why we have to be certainly continuing our effort to pursue and achieve the price stability objective, well aware that the surrounding conditions may actually get worse because of these geopolitical risks.

We may have localised risks in different parts of the financial system, and they should be addressed by macroprudential policy measures, certainly not by changes in monetary policy.

Second, whatever the proposal may be, it should be such that the ECB can carry out any tasks assigned to it in an effective, rigorous and independent way, without risk to its reputation.

We certainly closely monitor the financial stability risks that may emerge from a situation where we had very, very low interest rates for a long period of time, abundant liquidity for a long period of time.

Also, one may want to consider -- and I think I made reference to this in the introductory statement -- the geopolitical risk that may materialise into changes in energy prices as well.

In special cases, a Eurosystem central bank may decide to purchase outright covered bonds with an issue size of below $ 500 million, provided that the issue size is not below $ 100 million, where it decides, at its own discretion, that specific market circumstances relating to risk management considerations require such a purchase.

{'risk (3278)', 'perhaps (538)', 'cautious (120)'}

Also as regards the exante levels of savings and investment in the world economy, on top of all that has been said already, on the level of savings in Asia and in the emerging economies in general and also on the behaviour of corporate businesses in the industrialised world -- which is perhaps, in terms of investment, at least until now more cautious and prudent than before -- we have the oil element ; and the oil element not only triggers consequences as regards the inflationary risk but also simultaneously produces a level of additional" forced savings '' in a world which is far superior to what we had observed before.

{'risk (3278)', 'perhaps (538)', 'volatility (407)'}

I would say that it is perhaps also the G10 's sentiment that we are currently observing quite a low level of spreads and volatility in financial markets and, in some cases a certain under-pricing of some risks.

{'risk (3278)', 'perhaps (538)'}

Concerning the recent events that we have observed, it is true that the Governing Council of the ECB widely felt -- and I would say that it was very largely a consensus, a consensus that I myself have expressed on a number of occasions as the chairman of the G10 group of central bank governors -- that we were perhaps in a phase in global finance where risks in general were not necessarily assessed at their real price.

This was materialising in the levels of spreads and risk premia and in a number of other considerations, perhaps including low real interest rates.

It is clear that there is a nuance there and that, if we had the price of oil remaining at this level, it would confirm that we have a downward risk that would be perhaps more tangible.

As I said, over the shorter-term, we have economic growth here in Europe, in the euro area, which, in terms of risks, is broadly balanced, and even perhaps a bit on the upside if I take the immediate influence of the lower price of oil to foster growth.

I do not want to be alarmist, but I must say that we have, perhaps, a rather low appreciation of risks by markets at the European and global level.

But we would certainly have, over time, an increase in the pricing of risks that will perhaps be more in line with a good and appropriate assessment of risks at the global level.

They are broadly balanced overall, taking into account all the risks on the upside and all the risks on the downside, and also taking into account, as you have perhaps seen that we consider the risks for the real economy to be slightly on the downside.

{'risk (3278)', 'possibility (303)'}

I would mention three major risks that the Governing Council sees at the present juncture, the rise of protectionism, the possibility of oil price increases and the possibility of disorderly unwinding of global imbalances.

But I will tell you -- because you are offering me the possibility of making the point -- that what we do is to cope with the risks we see.

As regards your second question on the possibility of having close cooperation with the other central banks, be aware of the fact that when we do something, it is on the basis of our assessment of the balance of risks to price stability.

We have utilised this methodology recently in the domain of the sovereign risks to prevent or tackle a crisis, e.g. we have the possibility of debt risk scheduling and so forth, and it worked well and we have principles that are agreed upon by a very large number of countries and private sector participants.

{'risk (3278)', 'probability (40)'}

But, taking everything into account and with all due taking into account for the various probability distributions, we consider the balance of risks to be on the upside ; that is absolutely clear.

We 've seen that the probability mass of risks has shifted upward, although it 's not a dramatic effect at all, and then we will be in a better position to answer your question.

In other words, what we are saying is that we have the June Eurosystem staff projections, and what 's called the probability mass of risks over the years 2017 and 2018 has shifted slightly upward.

{'risk (3278)', 'probably (249)', 'perhaps (538)'}

What is important is that we probably have a combination of liquidity-hoarding by the commercial banks, by the participants in this particular market, and of credit risk assessment, as well as perhaps some other premia that have also to be taken into consideration.

{'risk (3278)', 'probably (249)'}

This is something which needs to be known and is probably due to a combination of lower risk premia and lower liquidity premia on our own money market rates.

We are in a situation where, collectively, the banks have a tendency, probably, to over-assess the risks that they are taking in engaging in loans with other commercial banks.

It 's probably true that risk premia are higher as well.

But let me say one thing, which is probably the thing that matters most: while in the previous time we had observed fragmentation and we had observed very subdued credit developments, nowadays we can safely say that fragmentation is over ; that credit is growing constantly and has been growing constantly since the beginning of 2014, month after month ; that spreads that were dramatically fragmenting credit between different parts of the euro area, and different companies -- between large corporates and SMEs -- have vastly disappeared in the sense that they just reflect now what are risk differentials and nothing more than that.

And on top, this increase of 100 basis points we would probably have an additional risk premium.

The correction had been identified a long time ago as probably necessary, taking into account a number of phenomena that had been observed by the central bank constituency in particular, but not only by us: namely an underpricing of risks on a series of markets and for a large number of instruments.

{'risk (3278)', 'reassessment (10)', 'seem (653)'}

On top of that, let us not forget that the real economy is performing well at a global level, but it seems to us that it is our duty to say: let us calmly prepare for a smooth and orderly reassessment of risks when the time comes, in order to avoid what would not be good for the real global economy, namely an adjustment which would not be orderly and smooth.

{'risk (3278)', 'seem (653)', 'cautious (120)'}

It seems to me very normal, in the present situation that the banks are more cautious, more attentive, they look at the credit risk with great caution and, so, I am not surprised at all by the response that we are receiving from the banks.

{'risk (3278)', 'seem (653)'}

It seems that the two LTROs have removed the tail risk that was present.

So we are really talking about a very narrowly restricted set, and it seemed only natural, since NCBs were taking all the risk, to grant NCBs freedom to decide whether they wanted to take it or not.

I 'll not comment on the" here '' or the" there '', but they seem to be adding to the upside risks.

At an earlier stage we already indicated that there were instances where wage settlements seem to have been concluded well in excess of the likely rise in productivity and that itself is one of the risks we see for the future.

{'risk (3278)', 'volatility (407)'}

You had, in particular, some parameters that were moved in one day, whereas in the previous episode -- when you had some kind of re-appreciation of risks and volatility in 2006 -- the same levels of corrections took much more time.

What we have been observing for a number of days has been a certain re-assessment of risks on the upside and across the board and a higher level of volatility.

So basically, much of what I 've been saying is that we 'll have to see whether this is actually short-term volatility or is permanent volatility, in which case you would observe an increase in risk premia.

You know, it 's true that volatility is higher so the risks are higher.

With regard to whether the level of interest rates reflects redenomination risks, as I said before, we are considering a variety of indicators here, one of which is the interest rates and then we are also considering those I mentioned, namely the bid-ask spreads, liquidity, the shape of the yield curves and volatility.

Second, and this is clear in the eyes of the ECB as well as in the eyes of the Fed -- even though I do not want to speak on behalf of the Fed -- in the eyes of all of my central banking colleagues: for quite a long period of time we had said that we were diagnosing a level of risk appreciation in global finance that was signalling under-appreciation of risks in general, which was illustrated in particular, but not exclusively, by the low level of spreads, the low level of risk premia and the low level of volatility in a number of markets.

I also said:" Let me also say that we are experiencing a period of market nervousness, a period where we see volatility in markets in general and re-appreciation of risks... We will continue to pay great attention to the developments in the market... '' It was a very short introductory remark to this press briefing and you have everything there.

This is one potential risk of enhanced financial volatility and we 're also monitoring that.

At the same time, risks relating to rising protectionism, vulnerabilities in emerging markets and financial market volatility have gained more prominence recently.

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And we take all pertinent information into account, including the evolution of domestic demand, the evolution of the economy and all other elements, as part of our own judgement of the risks to price stability, both through the economic analysis and through the monetary analysis.

Some are arguing that a part of it is due to risk premia on top of inflation expectations that would justify the fact that we remain a little bit below 2% for the sole inflation expectations.

We have an idea of the global evolution, but there are risks at the global level that we have to take into account.

Since then, broad financing conditions have improved, also in the context of receding risk aversion at global level.

The answer is no, we do n't see a risk of scarcity, and we have not discussed other measures.

It 's in itself a consideration, a reflection, that comes out of the crisis, and a consideration of proper treatment of credit risk in the accounts of banks.

I do not make a" hit parade '' of risks but we have to continue, as we have been until now, to be an" anchor of stability ''.

The assessment of our staff is that the risk of this happening is limited.

We are reacting to a risk of a too-prolonged period of low inflation.

But what is changing and is in the process of changing is what I often say, the longer it lasts, the higher the risks.

The risk is shared, it 's fully shared.

In a way, the re-appreciation of risks in the financial markets also corresponds to a view of the Governing Council.

That view which is shared at a global level by the constituency of central bankers - I say that as Chairman of the G10 -, which thinks that there has, to a certain extent, been an underpricing of risks in the global financial markets.

We only want to be sure that we are optimising the risk management of this collateral.

But I would say that we have been reasoning very much on the basis of our risk control and with a view to optimising our own risk control.

It is complex because it incorporates risk premia on top of inflation expectations, and you know that analysts are working a lot to try to disentangle the information on risk premia and on inflation expectations which are contained in this break-even concept.

We see as regards the inflationary risks that they are on the upside.

As you know, we have a way of reviewing our framework every two years, and the previous reviews were reflected in the risk control framework and the General Documentation that we published in 2004 and 2006.

What I can say on these measures is that they were designed to refine particular elements of our risk control framework.

This was what I wanted to tell you as regards the biennial review of he risk control measures.

We did that with a view to optimising our risk control.

We judged these increases to be the best and most appropriate way of dealing with the risk that we had analysed.

Regarding your first question about credit, what a central bank does and what we have been trying to do is to signal very clearly the need for banks to measure properly the risks involved in lending.

So what we have been asking for is prudence, measuring properly the risks, taking into account properly the risks and in that sense I think we have achieved a lot.

I think the dynamism of the credit reflects to some extent the dynamism of the economy and I think it would be appropriate to have a little bit of a slowing but again, it is a question of each bank deciding and taking the measures necessary to ensure that they can handle the risk that they are taking.

In the Financial Stability Review, we focused on risks associated with the operations of hedge funds.

Hedge funds are, by definition, institutions that are in the business of taking and diversifying risk.

And they have played an important role in the diversification of risks and in contributing to the efficiency of the financial system.

One important issue is how the counterparties of the hedge funds, i.e. banks and businesses, can assess risks that are associated with the products that are being offered, as well as with the hedge funds as institutions.

Of course, one important issue is that the risk management systems are further improved, and they have improved a lot in recent years.

This was the judgement of the Governing Council as regards the level of risks that we have to counter at the moment and it was in line with what -- to my understanding - the market itself was appreciating.

In our opinion, risks to price stability augmented sufficiently during the preceding period to trigger our interest rate increase in last December, a new interest rate increase in March, and the new interest rate increase today.

We always at any time do what we judge to be appropriate for countering the existing inflationary risks and ensuring price stability over the medium run and for continuing to anchor solidly inflationary expectations in line with our definition of price stability.

As I have always said, we think that our interest rates are correct and correspond to what is needed to counter inflationary risks.

In a sense, this is going towards a more" normal '' situation as regards growth and, it calls for countering increased inflationary risks and to progressively withdraw monetary accommodation.

When we list the risks at a European and global level, I would say that we have the risk of a disorderly unwinding of global imbalances, we have the risk of protectionism, we have the risks that are associated with a disorderly evolution of the global financial markets, given the underpricing of risks that I have already alluded to.

We also have the oil price risks that we have now come to know rather well over a very long period of time, and I would say, in that respect, any event that occurs in the geopolitical sphere obviously has an influence.

So, I would say that anything we have that goes in the direction of an alleviation of this combined risk of oil prices, commodity prices and geopolitical risk would go in a good direction, but I have no other comment.

What are the general conditions so as to make sure that we are always there, ready to provide the Greek economy with the needed liquidity, and at the same time we do n't risk a bank run again?

But we have to be doing this in a way that we do n't run the opposite risk which we were about to run before the imposition of capital controls, namely a bank run, which would leave all the depositors being, basically, hit.

That 's very important for an area that does n't share a common budget, or a federal budget, because a Capital Markets Union would be an extraordinary assistance in sharing risks across the Union.

I do n't want to underplay the difficulty that the ECB and the Governing Council of the ECB had in the last few weeks about having to take decisions between making sure the payment system continued to work, liquidity provision, monetary policy and not to amass excessive risk for the euro system all at the same time.

And the dynamism of M3 is partly due to the fact that this yield curve is flat and that a large proportion of investors are not taking the risk to be longer.

As regards the judgment of the Governing Council, I will sum it up in saying that the risks to price stability that we see are exactly what we saw at the last meeting and they are on the upside.

We have upside risks to price stability -- we are clear on that.

So our accommodative monetary policy will avoid this risk of stably lower inflation in the medium term.

I think that what has certainly not changed, and what was always in our minds, is that if we were to identify a risk of inflation approaching very low levels on a sustainable basis and threatening to fall below 1% in a persistent way, then we should of course be extremely concerned.

This still gives money a very prominent role in the assessment of risks to price stability.

We have, of course, considered risks.

We always consider risks, but there is no risk of inaction.

However, having said that, we will certainly monitor any developments closely and let me say that we are fully aware of the downside risks that a protracted period of low inflation does imply.

But if the risk aversion perception is one where you have the sense that your counterparty does n't have capital, we can not take care of that.

But we have to be realistic and when I was mentioning risks, I explicitly mentioned the associated risks for us from this dramatic natural event through the global economy.

I mentioned as a risk the combination of the Japanese event, particularly its nuclear aspect, with what happens in the Middle East and in North Africa, because all this clearly combines to create risks.

The intent of the risk managers is to make these claims equivalent in terms of risk to the traditional claims.

Then we decided that we would not share the risk arising from this type of bond but that each NCB should bear the risk of accepting these bonds.

So, after all this had taken place, it was only natural to say then that each NCB is free to accept or reject these bonds, because, after all, the risk would fall only upon the specific NCB.

On the second question, I can only reread the statement that has been agreed by the whole Governing Council:" The Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation. ''

On the first point, the too prolonged period of low inflation is, by itself -- and I think I have said this -- a risk, because the longer the period of low inflation, the more likely the danger of inflationary expectations in the medium term becoming unanchored.

So this is both a definition related to the length of time -- the time horizon -- but it is also a definition that impinges on the risk of a lower inflation path than we have in our baseline scenario.

It has these two dimensions, both time and risks.

These are many instruments, each one of them will address a specific risk.

For example, an LTRO -- untargeted -- would address liquidity risk.

I think you have rightly pointed to the key sentence in the statement:" The Governing Council is unanimous in its commitment to using also unconventional instruments... '' -- meaning that we have n't finished with our conventional measures --"... also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation. ''

The exchange rate is very important for price stability, so much so that we have made an explicit reference to it in the introductory statement, as you have seen, where we say that"... the Governing Council sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term.

In spite of that, frankly, we do not see the risks of deflation as having increased with respect to our assessment, which basically says that these risks are limited on both sides.

In the course of our discussion, we talked about lower interest rates, we talked about a lower deposit facility rate, we talked about prolonging the fixed rate full allotment, we talked about QE -- so there was an ample and rich discussion, which is confirmed by the statement that I already read about the unanimity of the Governing Council and its commitment to fight risks for price stability.

On the other point, first and foremost, the longer the period of low inflation, the higher the risk in terms of medium-term inflation expectations, which at the present time are firmly anchored and which, in our view of the medium term, represent the anchor towards which inflation will gradually pick up and will converge in the medium term.

As I said, we do not see these risks now in the euro area.

It is quite obvious that the Governing Council is looking at this prolonged period of low inflation and it is quite obvious that the longer the period of low inflation, the higher the risk for inflation expectations in the medium and long term.

So we will continue our discussions, and important thing is that the Governing Council is unanimous, as I have said, in its commitment to using also unconventional instruments -- conventional, but also unconventional instruments -- within its mandate in order to cope effectively with risks of a too prolonged period of low inflation.

Everything that we have observed as regards inflationary risks has fully justified what we have done.

We are in a universe where we see all the risks that I have listed.

They are exactly the same kinds of risk that were listed before.

We see a pipeline effect in a number of other prices stemming from increases in the prices of inputs -- particularly commodities -- and that is something which is ongoing and undoubtedly creates more risks.

We have the risk of second-round effects and the absolute necessity to avoid the materialisation of such risks.

And the second point on private debt is that it is not easy to design a programme of QE on private debt that is large in size and does n't have risk for financial stability.

At the present moment I would say that what we have seen is that as regards the risks that we have listed as the downside risks for growth in the euro area -- I did that last time on behalf of the Governing Council, and also in the month before -- there is some materialisation of these risks that were identified.

We knew that there were risks, and those risks are materialising.

As regards the number of surveys that have come in and that we took note of, I would not say that we were surprised because we had already identified the risks and we had said clearly that the risks we had listed were on the downside.

So, the fact that some of the survey data are very weak was for us the materialisation of risks that we had identified and made public.

Our position is clear on the fact that we had identified risks, the fact that some of those risks are materialising and the fact that we see reasons for the materialisation of those risks that are, as I have already indicated, the slowdown of the global economy in particular, and the drain on our economy as a result of the development of the commodity, oil and food prices.

As regards inflation, once again, we have only one needle in our compass and we take absolutely all information that is pertinent into consideration to identify the risk of inflation in the months and years to come.

I do not see that risk at all.

We have to look, of course, at our own risks, taking into account that one characteristic of the set of non-standard decisions we took already was that it increased our own credit risk -- taking.

And this is not something new because we had said it a number of times, including here on the occasion of these press conferences, the disorderly unwinding of global imbalances having been noted as a major risk in particular in the G7 communiqué and by us of course.

As I said, we see risks downward and we see risks upward, and these are very clear.

So, what we have to do - and in that domain we have still a lot to do - would be to convince them that there are also two-way risks.

We are of the firm opinion that such risks do not exist in the euro area.

There was a risk in being overconfident and that has proved to be a major risk that some of them were taking.

But there is equally a risk of being over-pessimistic and of missing the moment when we will have the recovery, which will happen of course.

So the ground is fertile for these risks.

At the same time, we are not seeing systemically important financial stability risks.

The right answer is to have in place macroprudential instruments that are effective, strong and well-targeted to cope with these risks.

Certainly it 's not to change monetary policy because of a financial stability risk in a certain part or in a certain market of the eurozone.

First of all, because we are" there '' as regards inflation and, as I have already said, we are strongly vigilant and -- and this is a reason why we did not increase rates today -- we take it that the situation, the overall balance of risks to price stability, is such that we have the maintenance of price stability over time in hand.

Certainly we have a risk framework which has served us very, very well since the beginning of the existence of the ECB.

As regards the risk to the inflation, we can safely say that deflation risks have disappeared.

So all I can say is that we have exactly the same analysis as regards the balance of risks.

It is clear that we see these upside risks to price stability augmenting.

The weight of the upward risks to price stability was assessed.

We have noted, of course, that oil prices and commodity prices represent a risk, but nevertheless we consider that, over time, we have inflation under control.

I only wanted to mention that as a risk, but the level of oil and commodities prices that we have observed during the last weeks does not change at all the assessment that global growth is very robust, as I said, and is helping the economies of the entire world to be in an environment which is favourable to growth.

Each of us participated in the discussion and we weighed up the balance of risks to price stability.

It is a risk.

From this and all other elements and inputs that we had, we came to the conclusion that the risks to price stability were balanced.

We analyse that risk.

Everything taken into account, when we extract all the information from these data we see that in the medium to longer term the inflationary risks are on the upside, and this is what I said on behalf of the Governing Council.

The purpose of this programme is to address the impairment in the bank lending channel, to address fragmentation, which translates itself into different funding access conditions and different risk premiums across the euro areas, countries, members.

First, if we thought that the risks to price stability today were lower than they were one month ago, I would not have said that we regard the monetary policy stance which we have as appropriate.

Exchange markets should be aware of the fact that there are two-way risks in any bet.

And that on the basis of all that we have seen since our decision in December 2005 to increase rates to counter the inflationary risks that we were noticing at that time, we have been, at least until now, fully vindicated in the sentiment that we were helping sustainable growth and job creation.

We are listing this risk as one of the important risks that would weigh down on the global economy.

And there are, at the same time, positive upside risks -- particularly associated with positive economic developments and prospects globally.

However, we are at the same time quite sensitive to the formation, creation, to the presence, of potential financial stability risks.

Today, as I indicated, the information from the first pillar indicates that upward risks to price stability have diminished over the past few months.

But fundamentally the answer to your implicit question as to how to deal with the risk of underbidding lies with the whole framework that we have designed: we have this corridor with the deposit facility on one side and, in this case more importantly, the overdraft facility on the other side, so that there is no risk that the banking sector will be short of cash.

So the ECB and the ESCB and the supervisors in the SSM have been actively working -- and the ESRB, by the way -- have all been actively working to address this issue of financial stability risk within a monetary policy stance that remains firmly geared to restore price stability.

And there, we 've taken a number of initiatives to address these risks, from the asset quality review to the stress test to the recapitalisation of banks that are taking place now, as we speak, ahead of the results of the AQR.

So we are addressing these risks as we see them, but the bottom line of this is that the first line of defence against financial stability risk should be the macro-prudential exercise, macro-prudential tools.

In fact, as I said, interest rates will stay low for an extended period of time, and the Governing Council is unanimous in its commitment to use also nonstandard, unconventional measures to cope with the risk of a too-prolonged period of time of low inflation.

With respect to the first question, you understand my reluctance to get into the actual intricacies of the case, but from our viewpoint, the viewpoint of a central bank, of a supervisor, the key thing is that the system is resilient to these risks.

So, certainly, attention will be devoted to adequate provisioning for these legal risks.

By the way, there is already provisioning for legal risks, so the issue to see whether they 're adequate, and also, certainly, there will be attention to where these banks actually carry out their activities.

The decisions on the monetary policy stance are based upon a final judgement on the balance of risks to price stability.

Well, to take the last question first, I did point to some increased risks for price stability.

In the speech in Sintra and before, we said that reflation has replaced deflation -- or risks of deflation, really, better.

We judge the risks for the economy to the extent that they have a bearing on the risks to price stability, because the needle of our compass is always price stability ; and the anchoring of inflation expectations is always the most important thing for us, because it 's what our primary mandate calls for -- price stability and credibility in the delivery of price stability over time.

On your first question: in what I said on behalf of the Governing Council, I was very clear on the fact that, for us, risks to price stability are on the upside, that in our baseline scenario we will certainly have to consider that those risks are on the upside.

For instance, an absence of sufficient transparency as regards the risks that have been taken by institutions, as regards the very nature of the various assets that are backing commercial papers.

And third, as you know, we do not compare the risks to price stability with the risks to the economy, and we do n't weigh these risks against each other.

That said, we will have to draw lessons in all areas, the surveillance authorities, the level of vigilance of the financial institutions themselves and the risk management within the financial institutions.

I said:"... strong vigilance is therefore of the essence to ensure that risks to price stability over the medium term do not materialise ''.

Again, I have said that in comparison with the Eurosystem staff baseline scenario, the risks are on the downside for growth.

And I have explained why we consider that the risks are on the downside.

So, you are right to underline that we are clearly in circumstances where, in our eyes, there has been a very considerable decrease in the upside risks to price stability in a very short space of time, and that is why we have taken these decisions.

It is because we consider that there has been a considerable alleviation of inflationary pressures and of upside risks to price stability that we have decreased rates by 175 basis points over a period which is a very short period of time, less than two months.

We decreased rates by 175 basis points in less than two months because what we had observed was an alleviation of upside risks of inflation.

We considered it was appropriate, taking into account a further alleviation of the upside risks to price stability, as I have explained.

Our analysis was that we had a substantial, a significant further alleviation of these risks, and that, in line with our framework, taking into account our two-pillar strategy and the cross-checking between our two analyses, it was appropriate to take that decision.

What we have put in place today is an effective backstop to remove tail risks from the euro area, and the ECB will retain its independence throughout.

First, in terms of the size, I said there is no ex ante quantitative limit to these interventions because we want this to be perceived as a fully effective backstop that removes tail risk from the euro area.

And these went hand in hand with some other changes in the euro area, especially changes in risk perception which took place in 2011.

All these things have changed the risk perception with respect to sovereign debt.

We are also confident that as the overall economic situation improves, fragmentation will also decrease, because let us not forget that fragmentation began with a very high risk perception, both by the core countries towards the stressed countries for a variety of reasons but also by the very same banks in the stressed countries vis-à-vis the private sector in those countries.

When I mention the risks of further inflation that would be due to indirect taxes or administrative taxes, I am not thinking about VAT.

As regards the changes in the risks concerning inflation, I mentioned traditional risks but, in the case of wages, we have the sentiment that we have to be particularly attentive to this element of risk.

Even if those risks did not materialise, but when they materialise -- it is too late.

We are speaking of risks.

We think that there are more upside than downside risks for price stability.

But I think it would be wrong to conclude that the implicit real number within the range is this or that, because we are speaking of risks and not already of materialisation of risks.

We are not arbitrating between the risks of inflation and the risks for growth.

We take growth into account to the extent that it augments or diminishes the risks of inflation -- an inflation which would not be in line with our definition of price stability.

So I was very clear on the risks for growth, which we see as being on the downside.

As regards you last question on wages I think it is a risk which we do consider to be on the upside.

Again, there is no materialisation as yet of this risk at the level of the euro area as a whole.

And I concluded, we" will monitor very closely all developments '' in risks to price stability.

On the first point: as the introductory statement says, taking into account today 's decision, the risks are broadly balanced for inflation.

When I said that the Governing Council was of the view that risks are" slightly tilted '' to the upside, it was in comparison with the inflation projections themselves which are fully in line with price stability.

We have guarded the euro area from inflation as well as from deflationary risks materialising.

It is very important what I said at the beginning of page 3 of my introductory statement:"... risks to the outlook for HICP inflation rates in the coming years are still seen to be broadly balanced.

Upside risks pertain to higher than expected commodity prices and indirect tax increases, while downside risks relate to weaker than expected developments in economic activity. ''

I said there are upward risks and downward risks.

So the risks are broadly balanced.

I have been clear since the very first press conference on the ECB 's conditions for accepting this task -- namely that it should be in a position to carry it out in a decisive, firm, complete and strong manner without any reputational risks.

On the second question, we said that the main aim of the OMT is to remove tail risk to overcome monetary and financial fragmentation of the euro area that would stem from a redenomination risk.

The ECB should not have the reputational risk that often comes with supervision.

At the other end of the spectrum you have what we call mutualisation of risk.

So the risk of deflation according to any measure has largely disappeared.

I said that, in a sense, it is quite natural that you have different credit costs in different parts of the Monetary Union, costs reflecting the different degrees of risk.

But there is a degree, a range, beyond which I said that there are risks, such as redenomination risks, that make these differences unacceptable.

There is also a risk perception issue, the risk perception that comes from the deteriorating quality of your counterparty that can not be addressed by the funding facilities.

That effect by itself would raise the risk premium, and in so doing it would increase real interest rates and would go against the objective that we have of price stability but also against restoring growth.

We take our decision on the basis of our risk analysis of threats to price stability on the medium run, and we decide accordingly to counter those risks in order to deliver price stability and be credible in this delivery over time on the medium, long and very long term.

Well, I pointed out in my introductory statement that there are still risks but the risks are balanced.

There are upside and downside risks to our primary objective.

To conclude on that we have the sentiment at a global level ; it is true of course in each particular vast economy like the US or us, or the UK or others, that there is presently some under-appreciation of risks in general.

But as I said, the exchange rate is the outcome of several other factors: what happens with other geopolitical risks that we have identified ; what happens with the geopolitical risks that are near to us, concerning the United Kingdom decision ; it 's also the outcome of the behaviour of the price of oil and many other factors.

There it said:" Our conclusion is that risks to price stability are at present balanced.

To the first question I 'll answer, basically, reading again what is in the introductory statement: additional stimulus beyond the impetus already taken into account is expected from the monetary policy measures still to be implemented, namely the TLTRO II and the CSPP, and will contribute to further rebalancing the risks to the outlook for growth and inflation.

I 've commented about the rebalancing of risks, to that picture.

The risks to price stability are still there.

As regards your second question on the evolution of growth, I draw your attention to the fact that I have been saying for a very long time that growth would be very weak, i.e. there would be a trough in the second and third quarters, and that the risks to growth are on the downside.

It is therefore clear today that some of the risks that were clearly highlighted in previous messages from the Governing Council in the previous months have materialised.

We have never hidden the fact that there were downside risks to growth after the trough observed in the second and third quarters of this year.

Our decisions on the monetary policy stance are based upon our assessment of the balance of risks to price stability.

And I said that we were today seeing that there was some reduction in the upside risks to price stability but that we still had upside risks to price stability.

Market participants were underpricing risks before the financial turmoil, and we said that publicly.

Again, I confirm that our judgement is that there is a visible weakening of economic activity and that the risks for future growth are on the downside.

We have seen a reduction in the upside risks for inflation but, in the judgement of the Governing Council, while they have diminished, they have not disappeared.

It is the balance of risks to price stability.

As regards the reason why we increase rates today, it reflects our assessment of all the risks to price stability that we see.

We are doing it to counter these inflationary risks.

The economic evolution is for us pertinent to the extent that it modifies the risks for inflation.

We are reasoning over the medium term and we have to be sure that we are countering these risks.

We will see how the situation develops and whether the new assessments of risks to price stability lead us to take new decisions.

Today 's decision is in our opinion the right decision in line with our present analysis and our assessment of the risks to price stability.

... risks to the outlook for price developments continue to be seen as broadly balanced over the medium term, with upside risks relating to stronger than expected increases in administered prices, indirect taxes as well as higher oil prices, and downside risks stemming from weaker economic activity. ''

We will continue to monitor closely all developments with respect to risks to price stability.

As regards the future, we will decide to move on the basis of the facts, figures and data, and on our future assessment of the risks to price stability.

However, downside risks have increased and emerging market economies ' challenges are unlikely to be quickly reversed.

Let me add that the cut-off date of these projections was August 12, so the events that took place since then are a downside risk to the projections themselves.

So the discussion today basically converged on an assessment that the downside risks to output and inflation have increased ; that we 'll still monitor the risks to the outlook ; and that the Governing Council emphasised, as I said a moment ago, the willingness and ability to act if warranted, by using all the instruments available within its mandate, and in particular regarding the asset purchase programme that provides by itself sufficient flexibility as far as the horizon, the size, and the parameters, as we 've seen today.

I have mentioned the risks to price stability coming from the delay in incorporating in non oil prices the previous oil prices increases.

It is clearly one of the risks that we have to be fully aware of.

We consider monetary analysis to be important under our two pillar strategy not only because it permits us to cross-check the economic analysis but also because it gives us particular information on the risks from the medium to the longer-term horizons.

On the second point, I told you and colleagues that are here that we thought at the level of the Governing Council, and also in the constituency of central bankers at a global level, that there had been in the past a degree of under-pricing of risks, some under-assessment of risks.

In the present episode, we see a process of re-appreciation of risks in general.

The main risk I have in mind is the huge and growing current account deficit of over 4% of GDP in the United States which, I am inclined to say, is a risk to the world economy.

Are the risks to price stability now on the upside rather than on the downside?

As I have said, current data confirm our baseline scenario, and risks are on the downside.

We know that there are several reasons for this: first and foremost, weak economic demand, second, heightened credit risk and, third, continued deleveraging by households and enterprises.

And I would qualify this episode as a process of re-appreciation of risks which can be interpreted as a phenomenon of normalisation of risk pricing in a number of markets.

I said a number of weeks or months ago -- and I said it repeatedly -- that we were calling for an orderly and smooth re-appreciation of risks.

We are in an episode where prices that were under-assessing an element of risk in a number of markets are normalising.

I mentioned already what our judgement was some time ago and, again, I see a phenomenon of normalisation of the assessment and pricing of risks.

The interest rate channel, because interest rates went down, and the confidence channel, because risk went down.

We are members of a 17-country euro area, so it is especially important that any modifications we introduce do not put at risk or call into question the independence of the members of the Governing Council.

To have consistent treatment means to enhance risk equivalence across all eligible assets.

OMT was meant as an effective back-stop that will remove, and has removed, the tail risks from the euro area.

So we monitor financial stability risks ; we have not seen any systemic bubble of any kind.

We were able to avoid the materialisation of deflationary risk in the euro area, because we benefited considerably from the solid anchoring of inflation expectations.

I think this is part of the more general category of financial stability risks.

On the first question, we actually had a discussion exactly on the balance of risks, as far as growth is concerned, not inflation.

In the end, the Governing Council agreed about this language that basically says -- the one I 've read before -- that says the risks surrounding the euro area growth outlook, while moving towards a more balanced configuration, are still tilted to the downside and relate predominantly to global factors.

No, the one that is not equal exactly like in the last statement is the balance of risks sentence, which repeated twice that the risks remained tilted on the downside in the last statement, and you can find it only once on the second page.

The risks of deflation have virtually disappeared.

The headline really is this:" The risks surrounding the euro area growth outlook, while moving towards a more balanced configuration, are still tilted to the downside and relate predominantly to global factors. ''

We are coping with the means we have to handle the money market, with the credibility of this handling and with the liquidity and credit risks incorporated in the money market interest rates.

Basically the spreads do by and large reflect different risk situations, risk premia.

The discussion focused really on the balance of risk concerning growth, not inflation.

In other words, the easing biases are meant to cope with tail risks concerning the inflation rate, not growth directly.

As far as the second point, let 's read it together:" Since our meeting in early March confirmed that the cyclical recovery of the euro area economy is becoming increasingly solid '' -- so it 's a process in evolution --" and that downside risks have further diminished '' -- so it takes stock about downside risks: so far they have diminished, and the cyclical recovery is becoming increasingly solid.

First of all, we have two sets of risks.

One interesting fact is that over the past few months the balance between these two risks has slightly changed.

In a sense, the domestic sources of risk have diminished, and global, geo-global sources of risk have increased.

So no, there is no substantiation of any significant risk of deflation and we are considerably helped by our definition of price stability and by the anchoring of medium-term inflation expectations.

It is the total provisioning we have made in order to face up to potential risks.

We proved that we were able to weather periods which were very demanding in times of upside risks for inflation.

We must take care of that, it is not something which can be taken for granted eternally, but it helps us considerably in circumstances in which there are significant inflationary risks.

The conclusion of the international institutions in general is that such risks are very minimal in our case.

If justified by facts and figures, if some of the risks that I mentioned are materialising, I clearly wo n't rule out the main policy rate being changed, indeed going down.

We have not observed changes in prices that would indicate risks of either inflation or deflation.

The third reason is risk aversion, and now it is quite clear that with the deteriorating economy, the non-performing loans increase and risk aversion by the banks goes up and further restricts lending.

So you risk losing money.

This is very important and we consider that risks are on the upside.

It is also clear that we had already diagnosed a degree of underpricing of risks in the financial markets in general, observed in particular as regards spreads, as regards risks premia.

No, we also see no risks of deflation emerging.

We see some risks on the upside, i.e. mainly the impact of rising energy prices, but that is by definition, as it was when it was on the downside, a temporary factor.

We see some risks deriving from some wage settlements here and there in Europe, those are the upside risks.

We see some downside risks from a rather subdued outlook for general economic development in the entire euro area.

As regards the imbalances, we consider that they are a risk to global growth and, of course, to economic growth in Europe too.

I myself recently expressed the same sentiment on behalf of the G10 at the global economy meeting in Basel: that it was one of the risks that we had to take into account when analysing and listing the risks to global growth and to growth in each particular component of the global economy.

It is clear that if the economy develops and continues to be at a level of growth which is significant, then it augments the risks to price stability that I have mentioned.

Those risks have fortunately not materialised ; but they exist, and that is the reason why we gave this message.

I would n't say we consider it a risk, as you said, but certainly it has to be addressed.

The only thing we can say is that it 's a risk that has materialised, and it 's a downside risk.

So," progressively '' meaning to the extent that we see our baseline scenario developing according to our own projections and scenario, then we will progressively withdraw monetary accommodation in order to permanently keep inflationary risks under control.

As I said before, unless a risk that is not seen today materialises, we should be ready to give the bulk or to take the bulk of these decisions in October.

Now on the potential financial stability risks stemming from monetary policies that are very accommodating for a long time, it certainly is a danger, but do we see that now?

The second thing is that we do n't know exactly if any serious risk materialises which warrants such postponement.

Strong vigilance is of the essence in our eyes and we clearly see increased risks to price stability.

It is also, from that standpoint, absolutely clear that we have to look permanently at the risks, and particularly the upside risks, of inflation.

We will never -- and I trust that no central bank would -- wait for the materialisation of these risks to act.

Today, and as I said in Athens -- and we referred explicitly to the Athens judgement and assessment - we think that present interest rates are still appropriate, that strong vigilance is of the essence in the present situation and that inflationary risks are on the upside.

M3 dynamism is indeed very closely associated with loan dynamism as a counterpart and that is one of the main reasons why we consider the risks to price stability to be clearly on the upside.

We have undoubtedly another risk which I have to mention which is protectionism.

There is a last element which I have to mention which has been mentioned by the financial stability forum as a major risk, which is the under-pricing of risks in the global economy at the present moment, at least till now where we see very low real interest rates.

We see very low spreads, we see very low risk premia and this is of course an element which has to be looked at carefully because it is not necessarily sustainable over the long run.

But our monetary policy has strongly supported the economy with a reduction of the strong risk which characterised the euro area as a whole, and Italy in particular, linked as it was to the euro and the crisis of sovereign debt of 2011-2013.

And I 'll just sum it up on behalf of the Governing Council: we are looking at inflation in the medium term, price stability in the medium term, and we see at the moment I am speaking no risk for a destabilisation of our prices.

Of course, the benefit of good decision is that those kinds of risks and difficulties are eliminated, but you then forget the risks and the difficulties.

And this is the reason why I mentioned earlier that before the euro we had a number of difficulties, drawbacks and very important risks that we had to cope with.

So the analysis of risks and preparing yourself to respond to the risks is really the rule of the game.

The first is that there is a series of measures that mitigate risk for the specific purchases that are to happen there, so that the assets bought there would be risk-equivalent to assets bought elsewhere, so for example, size-wise, type-wise.

I would say that the measures we 've taken have been determined exactly because our medium-term outlook on inflation expectation has worsened and we see that the risks have increased.

But certainly, having said that, I just said how closely we are watching inflation and inflation expectations in the medium term, and I can only reiterate that the Governing Council is unanimous in its commitment to using other unconventional instruments if it were to judge that the risk of too low inflation for too prolonged a time were to deteriorate.

On the inflation side, as you say, this is our baseline scenario ; we do not see deflation right now, but, if we were to have low inflation for a very protracted period of time, it is quite clear that we should be extremely aware of the potential downside risks.

Right now we see limited upside risks and limited downside risks for the inflation path.

Are the risks for inflation bigger in one direction or another?

It 's powerful because it addresses a realistic objective, namely redenomination risk spreads -- the spreads that are derived from redenomination risks.

As regards our discussion: as always, each one of us is weighing the risks to price stability.

Second, I mentioned on behalf of the Governing Council that risks to growth existed and that they were on the downside.

On the two first points there is clearly a risk which we take note of.

On the sentiment of the Governing Council, I will only repeat what I have already said: we will continue to monitor very closely all developments with respect to risks to price stability over the medium term and take the decisions that will be necessary.

We will monitor very closely all developments with respect to risks to price stability over the medium term.

We do not view now movements in interest rates as a realistic way to respond to risks in financial stability that we do not see.

And it is that factor - if those upward risks become stronger or if they do not abate - that would induce monetary policy reactions, not the exchange rate as such.

Well, they contribute to the upward risks to price stability, together with the prolonged period of high oil prices.

I can repeat it again: the position, the level of the euro, as it has now been for a rather prolonged period, is a position, which - over time - contributes to the upward risks to price stability.

First of all, financial stability risks are often addressed by macro-prudential tools.

I just said that low inflation, these levels of inflation for a protracted period of time, are a risk on their own: are a risk for the recovery, are a risk for the weight of debt in real terms, and are a risk for a variety of reasons.

So, let me say one more time that we are alert to this risk and we stand ready and are willing to act.

So this does n't mean that risk perception has disappeared ; risk perception is there, but its effect on tightening is considerably less than it was before.

I am not saying this to ignore the risk of having low inflation for a protracted period of time.

It is quite clear that, first, adjustment with low inflation is more difficult, and second, the very fact of having low inflation for a protracted period of time is a risk in itself.

One factor we look at is risk perception by the lenders, by the banks.

And the fairly interesting thing is that when we look at the effect of a certain risk perception, we see that the effect of risk perception on bank lending in the euro area is by and large at the same level as it was in 2010, and even earlier, even at pre-crisis levels.

It is crucial that an appropriate framework is in place to safeguard the achievements made and to avoid potential risks to full market access once the programme has been completed.

For the adverse scenario, which is a scenario that has some degree of risk of happening but it is not a certainty that it will happen, these other types of hybrid are accepted.

As I mentioned before, risks to inflation are broadly balanced and one of the risks is precisely shocks in commodity prices.

There will be a first full communication on the assets -- also called the" asset quality review '' -- which in fact is a risk assessment, a balance sheet assessment, by mid-October.

In addition, I think the ECB has shown its determination to fight any redenomination risk, and OMTs, with their precise rules, are there for this purpose.

We have had no ex ante concept, but we have always said that at any time we will do what is necessary to counter inflationary risks.

When we extract information from the financial markets, we have a level of break-even for inflation expectations that is in line with our definition of price stability when you deduct the appropriate risk premia, and it is the same with the surveys that are done.

We had PSI in Greece, we had the EBA stress test, we had the redenomination of risks and then we had -- most importantly -- the enormous amount of bank bonds coming due in the first quarter of 2012.

I said that we will monitor all developments very carefully so that risks to price stability do not materialise.

We have to permanently make judgements on the inflationary risks in the medium term and we will do whatever we consider necessary to counter inflationary risks.

Wages are very important for us, as always, because of the risk of second-round effects and, also, because we have to take into account different situations.

It represents a more realistic appreciation of risks in general.

Again, some re-appreciation of risks is welcome ; abrupt moves are not welcome.

As regards the pass-through -- again, it is a risk.

And I would say that the majority of economists -- certainly on the other side of the Atlantic but also on this side of the Atlantic too -- would not say that the present slope of the yield curve means that there is a very high risk of recession.

When you have such capital chasing investment, it creates an environment where capital is abundant, and pushes down the price of risk in general.

As you know, we have the feeling that this can not last forever, and that the present accumulation of the very low level of real rates, the very low level of spreads, the very low level of risk premium that we are observing, the underestimation of risks in general -- will necessarily be corrected.

To give you an idea of how markets have reacted to the events in Cyprus: today 's data show that TARGET2 balances continue to decline and that slightly less than 50% of the net amount injected by the LTROs has been repaid -- proving wrong all those who thought that huge risks were taken with the LTROs.

Being" out '' does n't mean the country avoids the need for action, but exiting entails many risks, big risks.

When we come to looking at the credit risk, it is quite clear that all these actors have a role to play.

As you now know, because I have said it several times, banks do not lend because of lack of funding, lack of capital or risk aversion.

At that time the outlook for a sustained return to our inflation objective was much darker, and deflation risks were not immaterial at that time.

However, all indicators, as we assessed them today, - and I am talking about wage demands, I am talking about producer prices, and I am talking about the liquidity situation - point in a direction that the risks on the upside are increasing and have already increased, i.e. the risk of that figure of 1 1/2% to 1 1/2% being threatened.

And more specifically the risk of deflation has largely disappeared.

No, at this point in time frankly we do n't see risk for the euro area.

The fact that structural reforms and convergence are being pursued in various countries is important, not necessarily because it causes risks for the euro but because it strengthens our monetary union.

We went back to when we increased the size in March, and we asked ourselves what were the conditions of the economy at that time, what were the prospects of a sustained return to our objective of inflation, what were the risks of potential deflation.

And we also saw that the risks of deflation, the inflation distribution are much more skewed towards out of deflation.

Turning to the downside risks, we already took these into account in our decision to lower interest rates by 50 basis points in December.

Those downside risks have certainly not disappeared since then.

The risks to the downside have increased.

So from both pillars we concluded that the risk to price stability had, if not disappeared totally, as the first pillar indicates, then at least, looking at the second pillar, diminished.

And we had said" No, we will not tell you that we will not move in the months to come because we are alert and we will do whatever is necessary to cope with risks and threats to price stability ''.

The size of the ECB 's balance sheet, which is often considered as a source of risk, is continuing to shrink !

Banks do not lend for three reasons: one is lack of funding, the second is lack of capital and the third is either risk aversion or credit risk.

So we are now left with high risk aversion and credit risk -- credit risk caused by the recession itself.

On the second question, we are pleased not so much that the yields are going down, but about the fact that tail risks have been removed and this has led to an improvement in financial market conditions and the beginning of a stabilisation and return of confidence in the financial markets.

I do n't think that 's where the problem is, contrary to what the issue was at the beginning of last year when there was a serious potential for serious distress and systemic risk materialising.

We can not both tell the banks that in the past they took very abnormal risks, exhibited abnormal behaviour and so forth, and then tell them now to forget about their risk appreciation and their judgement.

I do not yet see any risks of exuberance because, after all, we are now back in a normal situation, from a financial viewpoint, but we are not at all seeing an early or strong recovery.

As regards the risks to economic activity, you are right, they stem essentially from a lack of action by the governments on the fiscal side ; by this I mean that not only is continuing fiscal consolidation essential, but it also needs to be implemented in a balanced way, through a proper combination of government expenditure reduction, and taxation.

On you first point the sentiment of the Governing Council is that the balance of risks to price stability is on the upside.

Taking all things into account, it is clear that, for us, it signals series of risks in the medium to longer term.

This does not mean that we have no risks, we have risks and those risks are clearly on the downside.

These are low-probability risks but grave risks.

Again, it 's a risk -- I hope very much that it will not materialise -- but it is a risk.

As regards deflation, we have not changed our diagnosis -- we do not see any substantiation or materialisation of deflationary risk.

This is one of the reasons why we said that we felt that the risks for inflation, in particular, were balanced, because we also take into account the decisions that have been taken since the last set of projections was issued.

Having said that, the risks are on the downside.

Well, I can not quantify how serious the risk is.

Heightened risk aversion is another factor which is very important.

If it were to be protracted, it would certainly pose a risk for the recovery in the United States and the world.

Well, the US budget shutdown is a risk, if it is protracted.

For example, if you issue in foreign currency, you want to hedge yourself against the exchange rate risk.

We have judged today that this balance of risk has moved on the upside and that is why we expressed our strong vigilance.

More seriously, we know the risks are to the downside, and we know we have to be prepared.

The second question was on risk sharing in the ABS programme?

There is risk sharing, It 's normal.

We can not put ourselves in the situation that we faced in 2008, when the public authorities were obliged to take on a level of taxpayer risk that was absolutely gigantic and very abnormal.

And the risk of a depression in the future would remain high if we do not have a financial system which is sufficiently resilient.

Its with enormous satisfaction that today I can read to these people that there is a Fitch ratings document the title of which says ` ECB takes minimal credit risk with ABS ', and it considers the criteria to be conservative.

First, again, I repeat -- and you will pardon me if I say something I said already here -- we have an economic analysis and then a monetary analysis, and then we have a judgement on the balance of risks for price stability.

The judgement we have on the gradual recovery proceeding is something which is part of our own economic analysis, which again has an impact on the balance of risks for price stability.

So you have a number of signals that we are going in the direction of the upside risks for price stability.

That being said, our judgement on the balance of risks for price stability is -- for all the reasons I have explained -- balanced.

It is clear that there are risks: you have exactly the same figures, the same data, you know the environment, you see that the present level of CPI is 2.4 when it was 2.5 last month, you know our definition of price stability of less than but close to 2%.

We also have to say that in the medium term we consider that price stability will be in line with our own definition, but it is obvious that we have to take into account a number of risks and that is the reason why vigilance is warranted.

OMTs were conceived, designed and meant to address tail risks in the euro area.

Having said that, I think we would all agree that low levels of interest rates entail serious risks for financial stability.

But, at this point in time, we do not see these risks and we see all the factors that have led us to express this new forward guidance.

I have just said, it is meant to address the tail risks of the euro area.

I am not sure I actually spoke of risk coming from the strength of the euro.

There are risks, and they are risks that I have already mentioned.

So, it is clear from the cross-checking that the risks are there.

You know that I never respond to the question" How do you balance the risk for inflation on the one hand and the risk for growth on the other hand? ''

Of course, you were right in saying that the risks to growth have their own impact on the risks to inflation.

I have been very clear that the needle of our compass is inflation, and this needle signals risks.

And I have said that our new information fully confirms the risks that we had identified.

We always reserve at any time the right to move when we judge it to be necessary in order to counter the inflationary risk in the medium term.

As regards our own monetary policy stance, we took a decision today, as we do at each of our meetings, based on what we judge to be appropriate in order to counter inflationary risks and to continue anchoring inflation expectations solidly.

That is certainly a unanimous conviction, and it 's also, I would say, reiterated in the introductory statement I read just a minute ago, the Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation.

Some of these flows are caused by, in a sense, the geo-political risk that I was mentioning before.

The geopolitical risk would certainly impact the euro zone if they were to increase and become more material and relevant than they are today.

I think I 've said several times that the longer is the period, the bigger are the risks for a de-anchoring of inflation expectations.

But it is not enough of a risk to make us concerned about the future inflationary developments.

On the first question, the too prolonged period of low inflation, you have a period like that when you see that the risks of de-anchoring medium-term inflation expectations are increasing.

The exchange rate is one of the parameters amongst many, many others that we look at when reaching conclusions on the inflation risk and on our capacity in the medium term to deliver price stability in line with our definition.

The risks are broadly balanced but, as I said, with more prominence to global risks and I mentioned protectionism.

This is why we say there are risks and these risks have acquired more prominence recently.

There are several reasons why a banking union and a capital market union are essential for risk sharing in the future, without even thinking to fiscal capacity or other forms of risk sharing.

I also stated on behalf of the Governing Council that the balance of risks was on the downside.

Risks for growth are in our judgement clearly on the downside.

But it is complex because a risk premium is also incorporated in the figures that you obtain when you extract the break-even inflation rate.

So whether the observed pick up is reflecting or not something happening in the" pure '' inflation expectations or whether there is an increase of this risk premium -- which would not be surprising in the present period -- is a complex issue.

Again, we are qualifying the situation as -- without calling our baseline scenario into question at this stage -- one of growth that would be around potential, but I also said that the risks were on the downside.

That 's absolutely clear, and it is also one of the reasons why we have decided not to take on additional risks associated with the purchase of securities that would increase our risks.

In both cases, we have a double guarantee, which is something that we considered appropriate taking into account the fact that we have a high level of risk, closely related to the fact that we have an accommodating collateral framework.

This is fully in line with the need to be careful regarding risks in the Eurosystem.

It protects us from the longer-term risks of inflation occurring in the future and we are pleased to say that it has also functioned well in terms of protecting us from the shorter-term threats of deflation, which never materialised in our case.

We are reasoning in the medium term in this respect, not in the short term, and it is part of the risks that we have clearly identified.

So that is a question that we have to follow carefully and without undue alarm, but it is part of the risks that we are identifying.

But we all agree that one of the risks at the global level in the economy is the constellation of imbalances.

Now, this is technically quite complex, because you can interpret this break-even as incorporating inflation expectations and risk premia on future inflation.

From this point of view, we are very happy because we can clearly see that we have decreased the risk premia.

We have seen a number of consequences in the term money market, in particular for the one-year rate where the risk premia are lower than in other equivalent money markets.

And - as on earlier occasions - we, and now also the European Commission, have expressed some concern about the determination of, in particular, the larger countries to adhere to the aims of the Stability and Growth Pact and that in itself has led us to say that one of the risks we see of the upward risks is a looser fiscal position which you will find in my Introductory Statement, if you read it carefully again.

We still see risks, but we still see them both on the up side and on the down side.

Not only a risk for prices.

We have carefully assessed that risk and we have come to the conclusion that there are no signs of deflation developing in the euro area as such at the moment.

So, of course, in my statement we say that there is a potential risk involved.

We see risk especially coming from the price of energy.

Also, when again we examine the reasons for the tight supply, we see -- and I think this has been going on now for three or four months -- we see that risk perception, or risk aversion, has lost importance as a factor, reducing supply or increasing tightness.

So our risks to the recovery were on the downside to begin with, and certainly one of these risks would be geopolitical developments.

The second question related to geopolitical risks.

More generally, I think there are two main risks that one can see today.

There is also another risk that is less mentioned these days.

That 's the risk of financial deregulation in other major jurisdictions.

I would flag this as one major risk for the years ahead: that we repeat the same mistake.

So geopolitical risks are heightened, are higher than they were a few months ago.

At the same time, we want to keep a level playing field across the world with a treatment of similar risks.

As a matter of fact, most countries do n't have any specific risk weight with respect to that.

It is very important to obtain this: very low risk premiums on the medium and long-term rates, in particular, and preserving or enforcing the favourable financial environment, which is of course one of the elements that is important for growth and job creation.

But it 's quite clear that if the geopolitical risks materialize, it 's quite clear that the next two quarters will show lower growth.

And the third is risk aversion.

But our risk management is actually very, very careful and we have a very well developed system of haircuts, of risk-pricing and another risk reduction rules.

So, even though I think we are making a substantial contribution to the real economy in accepting this new collateral, we are also quite confident that we will manage the risks entailed.

But it does not point to any risk of such a development in the short term.

So it can not be concluded from this that there is a risk in the foreseeable future.

But it is not pointing at a specific risk of a breach in specific countries.

But it is not pointing at certain countries in saying that there is a special risk of breaching the 3%.

The fundamental issue is that the decision provided all banks in the euro area with an insurance against the risk of being without liquidity.

Let me read to you this:" The members of the Governing Council shall not use confidential information to which they have access for the purpose of carrying out private financial transactions, whether directly or indirectly via third parties, or whether conducted at their own risk and for their own account or at the risk and for the account of a third party. ''

On the first question, taking into account the diagnosis that we made even before the start of the turbulent episode it was clear that an important market correction was both unavoidable and necessary because we had, before the turbulent episode, an under-pricing of risks in general in global finance that was documented.

This, of course, also included the risks of a hard landing and the outlook for the world economy as a whole.

On the second question, I can not quantify how serious the upside risks are, but there are always risks to price stability - in one direction or another.

The main thing I said was that the risks, as we see them, are on the upside rather than on the downside, but I can not quantify the degree.

That 's why we said that the risks to growth are balanced in the sense that we have some upward risks domestically, but some downward risks globally.

We will take into account all elements, the inflationary risks, the expectations.

It 's just that the risk is different.

We 've discussed risks about growth.

Therefore they create reputational and legal liabilities and therefore the supervisor is going to be called in to react to these risks or prevent them from happening.

On the first and we were always -- and it goes back in tradition -- not to discuss risks about inflation.

As I have already said, we were taking into account a significant further alleviation of inflationary risks, owing in particular, but not exclusively, to the slowdown of the global and European economies.

The Governing Council has observed that there was a further alleviation of the inflationary risk.

Most of the new information we have had -- and it is true that it is good -- confirms our positive judgement, in particular on the real economy, and we have the same analysis as regards the risks, both for the real economy and for inflation.

We confirmed the view that risks were on the upside and had augmented at the press conference and in the introductory remarks a month ago, and that was again noted by everybody.

We judged that the risks to price stability were increasing, were on the upside, and I made that very clear in responding to questions.

The fact that we are in a mode of robust growth is evidently something that we take into account as an element which creates an environment for risks that is different from what you would have if growth was not that robust.

I would say it is a way to sum up the risks that we see in the international arena, including, of course, the risks that are embedded in global finance.

We will monitor all developments closely, as I have said, with respect to risks to price stability.

There is a risk of disorderly correction of this situation, which is, again, associated with the disorderly unwinding of global imbalances.

Now, we have as I said downside risks relating primarily to geopolitical and especially foreign exchange markets.

By and large, the risks to growth are balanced.

From time to time, I am told that these risks do not actually materialise.

So, here we are doing something that we consider to be exactly appropriate to cope with those risks and to avoid a materialisation of those risks.

But if a risk materialises, it is no longer a risk !

And then it is added that one should wait for the materialisation of these risks.

In any case, in July we will have an overall review of our risk situation.

And in July we will say how we will apply the rules that will improve our risk management in particular for private securities and private collateral.

We will look at the facts and figures, make our judgement on the risks to price stability and take the decisions we will judge appropriate to deliver price stability.

I will answer the second question, but first let me give the floor to the Vice President on the financial stability risk caused by the negative rates for a long time on lots of assets.

And, as I have said, we will continue to monitor closely all developments with regard to risks to price stability.

I have said that the risks are more or less balanced, both to the up and to the downside.

I do n't know why you say that we have a different view of the inflation risk, and inflation as it is materialising, from last time.

You were mentioning downside risks to growth in a number of countries.

I would say that the Governing Council considers that the risks as regards growth are really balanced at the moment I am speaking.

Today we have judged unanimously that the increased level of risks to price stability embedded in the situation were such that today 's correction was necessary to fulfil our mandate and to maintain the full credibility that we have.

They would represent a high risk, but one which did not materialise.

We see these imbalances as a risk to growth and, as I said on behalf of the Governing Council, we see two major risks to growth: the price of oil and global imbalances.

As regards the discussion on accommodation or neutral rates and so forth, I would only say that what we have always been doing is to counter inflation risks.

I would only say that we are in a process of normalisation, we are in the process of countering inflation risks that we have seen as being on the upside for some time.

There will be other operations where we will, as we see it, improve our risk management.

I said that our baseline scenario was clearly in line with what we have already said, in line with the previous projections, but the risks are on the downside.

But our decisions on monetary policy are based on the risks to price stability.

As I have very often said, we have a needle in our compass, and it is indicating the risks to price stability, because our duty, our primary objective, is to deliver price stability.

And from that standpoint, we see -- in contrast to what we have seen in the real economy -- risks on the upside.

I do not say that these risks have materialised.

I say risks are on the upside.

I do not want to repeat the reasons why we judge that the risks lie on the downside.

And we are never pre-committed, because we can always move when we judge that the risks to price stability command a move from us.

We analyse the real economy and, as I said, on balance, the risks to the outlook for growth are judged to lie on the downside.

On the second question, we do not balance the risks to the real economy and the risks to price stability to make a judgement of which risk is more important.

Again, our message is that there are upside risks to price stability and we stand ready to counter these upside risks, to solidly anchor inflation expectations, to deliver price stability, and to be credible in the delivery of price stability.

As has been done in the past on the other side of the Atlantic, in particular, we are trying to identify the risk themselves and to gain a proper understanding of extreme cases where there is severe deterioration in the situation.

Exchange rates are one of the parameters to the extent that they influence risks to price stability.

As regards market expectations, I will merely say that, at the moment and everything taken into account, risks for price stability are on the upside.

Upside risks are on our radar screen and, as always, we confirm that we stand ready to act whenever it is necessary in order to solidly anchor these inflation expectations and be in line with our primary mandate.

At the present time, we think it appropriate to concentrate on the upside risks to price stability that we see, and to concentrate on the fact that we stand ready to counter these risks at any time.

So, take our message as: -LRB- i -RRB- we confirm our baseline scenario as regards growth, -LRB- ii -RRB- we say that we have downside risks for that baseline scenario, and -LRB- iii -RRB- I will go back because it is your second question, we mentioned that with all this taken into account, we see upside risks to price stability, and we stand ready to counter these upside risks to price stability.

It also calls for benchmarks for best behaviour to be set by the industry itself in order for the risk management of these institutions to be optimal and the transparency of the hedge funds and highly-leveraged institutions vis-à-vis both their core intermediaries and vis-à-vis their investors to follow best practices.

And on the second point, I would say that I was clear in the diagnosis of the Governing Council that we consider that upside risks to price stability are on our radar screen.

I also mentioned that with money and credit growth vigorous in the euro area, monetary policy stands ready to counter upside risks to price stability.

We are very insistent on the fact that against this background our monetary policy stance is weighted to counter upside risks to price stability as it is required by our primary objective.

We underline the fact, that we stand ready to counter the risks.

So it is absolutely clear that our message is particularly strong for those economies where you have, de facto or de jure inbuilt elements of indexation with all the risks that are associated with the hump being transferred to a number of prices and to wages and salaries.

And the risks for the real economy as we see them, stemming from a number of factors including this ongoing correction, are on the downside undoubtedly.

As I said on behalf of the Governing Council, our baseline scenario remains one of ongoing growth, but risks are clearly on the downside.

In this respect the subtle changes that you noticed in the comments of the Governing Council are due not only to the emerging markets themselves but also to the risks that are associated with the developments in the industrialised world and the United States in particular.

So, it will be an improvement from the standpoint of our risk management.

It is for public and private instruments at investment grade level, that we have taken this decision to prolong what exists today and to reinforce the risk management of what exists today as regards, in particular, private securities.

For private instruments, it reinforces what exists today in terms of risk management.

We are eliminating part of what exists today, and we are also prolonging part of what exists today with a view to reinforcing risk management.

In a market economy banks -- commercial banks, banks in general -- have to analyse the various risks -- public risk and private risk -- being very careful not to take undue many risks.

So you are describing the normal preoccupation of the risk management of a financial institution.

And we envisage taking decisions before the end of the year on those very important issues of new appropriate prudential rules and the necessary significant improvements in risk management.

I repeat: we will not tolerate a materialisation of these risks.

I said on behalf of the Governing Council that we were prepared to act pre-emptively, so that second-round effects and upside risks to price stability would not materialise and that, consequently, inflation expectations would remain anchored.

But we 've seen the downside risk increasing of late, and that explains why we have decided to strengthen the measures decided in June and complement these measures with others.

But the answer to this question is: would the truth be a risk?

As I 've said several times, the longer the period of low inflation the higher the risks of de-anchoring.

Well, that is a risk I would be very happy to take.

And that creates the present observation that the pricing of risks is lower than it would be in -- I would say -- more normal times.

As regards the EFSF, it is a decision which I have accepted on behalf of the Governing Council that when the EFSF intervenes in a secondary market, it would be on the basis of an ECB analysis recognising the existence of exceptional financial market circumstances and risks to financial stability.

And you had also among all those reasons the remarkable creativity that we are observing in the global financial markets as regards derivatives and the way of splitting, of repackaging, of reformatting risks with the consequence of enlarging formidably the scope of the investors that are risk buyers.

But one can see that not all central banks are in the same situation from this inflationary perspective and risk standpoint.

And on the basis of our understanding of these dynamics we conclude that risks to price stability in the longer term are signalled by this overall analysis.

Our judgement today is that, for the longer term, there are risks to price stability embedded in what we are observing, even if the dynamics are very different as regards a number of counterparts.

The first is that tail risks have disappeared.

So deflation risks are not there any longer, and that 's why we have removed one of our easing biases, which was exactly addressing the tail risks of the inflation path.

At the same time, since we have stronger confidence in the path of inflation convergence and we 've seen that the tail risks of deflation have definitely disappeared, we felt confident in removing the easing bias as far as the interest rate was concerned.

It is our duty to signal risks, and it is part of the signalling of risks that permits global finance and the global economy to be as impressive as they are.

I do not want to elaborate more on that, other than to say that, in any case, the needle of our compass is that we make a judgement on what is necessary to counter inflationary risks at any given moment.

We judge what is necessary to counter inflationary risks in various circumstances, and circumstances do not cease to change.

They have improved their risk management concepts across the board.

There are, as I said, good reasons for risks to be priced as they are.

We have been working a lot to improve, in particular, risk management and I take it again that it would be equally wrong to be too complacent and to underestimate the risks and also to say nothing is being done.

Because, undoubtedly, the risks have been augmented, not only by the price of oil but also by the increase in the price of oil commodities.

One is our own analysis, recognising the existence of exceptional financial market circumstances and risks to financial stability.

This is the reason why, even in the present circumstances, with undoubtedly a big difference between the previous projections and the present projections, and taking into account all the risks that I have mentioned, it is nevertheless our opinion that there is today no case for increasing rates.

But this does not imply any more risk for the so-called ` creditor countries '.

At the present moment, as I said, we will continue to monitor closely all developments to ensure that risks to price stability do not materialise over the medium term.

To your first question: again, we do what is necessary to counter inflationary risks and to be able to permanently deliver price stability over the medium term, which is the pertinent horizon.

We, again, are making our own judgement, based on collegial wisdom and on experience, on the basis of all information that is pertinent in order to counter the risks.

We are, in the Governing Council, saddened by the terrible events in the United States and that are proving again that risks can materialise in all domains in a terrible fashion.

But there are risks, and of course the oil price increases are one of the obvious risks to growth.

The first point is very important because we want to repair monetary policy transmission channels and we clearly see a risk, and I mean the convertibility premium in some interest rates.

But there are some risks both on the upside and the downside.

As regards your first question, it is true that we consider that the risks are broadly balanced when we look at the medium-term risks to price stability.

There is a technical adjustment to our risk provisions, so the net profit for 2009 amounts to $ 2.253 billion.

So the risk of deflation has dissipated.

On the first question, we removed the interest rate easing bias because the tail risks on the future path of inflation have disappeared.

That is to say, deflation risks have definitely gone away.

If things were to turn out in a way that these risks were to reappear, we 'd certainly be ready to lower rates.

Rather than respond to you on how we measure this risk premium, which is also a task of our committees, let me tell you that our greatest concern is financial market fragmentation rather than assessing exactly a figure.

The answer to the first question, the question is ; was the assessment that risks are broadly balanced shared by all Governing Council members?

Also liquidity management, morale, risk management, governance have all been overhauled by the legislators, by the regulators and by the supervisors.

Well, the answer to the first question is no, we have n't changed the balance of risk about growth.

So the balance of risk has n't changed.

I 've listed just a series of downside risks.

There are also upside risks, one of which is the fiscal policies.

That 's one, but the other much more important consideration is that we are observing an underlying strength of the economy that makes us think that the downside risks are going to be mitigated by this fact, by the -- as I mentioned before - improvement in the labour market and the rise in wages, which are the main drivers that support consumption.

The addition of the change of definition of price stability and the risk premia would immediately trigger a significant augmentation of medium and long-term market interest rates.

Does it mean that we take more risk?

Yes, it means that we take more risk.

Does it mean this risk has not been managed?

And the third part of the reason relates to risk aversion.

We will look -- obviously together with the risk management officers and other very competent staff, -- at the assessments, we will have a discussion and if the Governing Council is not satisfied it will not be accepted.

We, the Governing Council, thought that the amount of risk that was taken on board was perfectly acceptable and very well managed.

We take risks with everything: we take risks with normal monetary policy operations, with LTROs, with the SMP.

The important thing is that once we take these risks, firstly we do n't judge them to be excessive and secondly, and most importantly, we manage them well.

We have full confidence in our staff that these risks can be well managed.

Of this three, the risks must be assessed according to the common guideline and presented to the Governing Council.

But, as I have said repeatedly, these operations address the liquidity risk, not the lack of capital.

To some extent, they also address risk aversion -- to the extent that the risk aversion results from a perceived lack of liquidity on the part of a counterparty.

Therefore, we want to keep the risk related to these assessments with national central banks so they bear the full risk of their choices.

So it 's this decision that was taken and so it means of course that with a stronger economy and better management of credit risk, the levels of NPLs for new loans should be way below what they were during the crisis, of course.

So that 's important to ensure that from now on, the banks are careful enough in managing credit risk so that there is no further undue accumulation of NPLs.

We do n't carry the same risk analysis for inflation as we do with growth.

To conclude now that there will be financial stability risks will be premature ; we have to see what 's going to happen.

On the issue of independence, I think it is very important that the ESRB and the members of the Board perform their tasks in the interest of the Union in order to prevent and mitigate systemic risks.

But we also have a number of very significant risks on the downside, which are, in our view, balancing the risks on the upside.

As you know, the main tasks of the ESRB will be to identify and assess systemic risks and to issue risk warnings and recommendations in order to address these risks if they are considered to be significant.

There are risks associated with acting too early and risks associated with acting too late, and we must balance those risks.

If we have an ex-ante bias in one direction or another, we risk missing the point and ultimately, having to cope with great difficulties.

One of the clear lessons of the past episode, which was a very difficult period, during which we had to take very bold decisions, is that our duty is to be sure that we are correctly weighing up all of the risks associated with each and every decision we take.

We are maintaining exceptional measures that are extremely generous, as you can see, precisely because we want to be just in our behaviour, and because we do not want to create risk in any area.

On the first question: again, what the Governing Council says today by my voice is that we remain committed to preventing second-round effects and the materialisation of upside risks to price stability over the medium term.

With regard to the inflationary risk in the longer term, I can reassure our fellow citizens on behalf of the Governing Council.

I would only mention that we said -- and I said on behalf of the Governing Council at the last press conference -- that the risks that we were perceiving were on the downside.

And if you compare the introductory statement with that presented at the previous press conference, you will see we insisted much more on the risks, risks which were mentioned in the important paragraph at the very beginning of the introductory statement.

So, what I said today on behalf of the Governing Council is that incoming data have confirmed that the risks to the outlook for economic activity lie on the downside.

My understanding is that, in taking the decision it has taken, the Fed has considered the evolution of the various parameters, including the risk of a strong slowdown of economic activity, and the alleviation of inflationary pressures that would be associated with this strong slowdown of the US economy.

It means an additional effort, in terms of risk taken by Governments.

And these should be seen for what they are, namely decisions that increase the risks for the governments themselves and therefore decrease the risks for the banks.

We were determined to raise the rates because the information we were getting from the monetary analysis was signalling that there were risks in the medium to longer term.

Third we have also the permanent threats that are associated with the global risks connected with the disorderly unwinding of global imbalances and the market risks which are embedded at a global level.

I hope very much that these downward risks will not materialise.

We have carefully considered and discussed the risks you draw attention to.

So, we do see the risks you have pointed out, but we are taking the risks deliberately.

Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council remains unanimous in its commitment to using additional unconventional instruments within its mandate, and that 's exactly where the work that 's being done by the ECB staff and by the relevant committees comes in very, very useful, because it 's opened up a very rich, ample discussion on different unconventional instruments.

OMT was addressing the tail risks for the euro coming from redenomination risk and it was necessary to address this confidence crisis in a way that the action of the ECB would be deemed credible by the markets, which was the case.

The policies that we are discussing today address the risk of low inflation for too long a time such that it would feed into lower medium-term inflation expectations.

Normally in ordinary time, which is monetary policy, it 's not addressing the tail risk of a certain situation, so this is pure monetary policy.

So much so that in normal times we would address this risk by lowering nominal interest rates.

Again, when I add up all the risk -- the risk to taxpayers -- that has been put on the table after the intensification of the crisis in mid-September 2008, when you look at the option of recapitalisation, the option of guarantees of all kinds, including for medium-term refinancing, the option of impaired assets in a number of cases and so on, we end up with an enormous amount of public money -- public risk.

But I also told you that the risks were on the downside.

On inflation, I think I have always said, at least in the recent past, that risks are broadly balanced because, on the one hand, you have the downside risks that come from the weak level of economic activity and high unemployment.

On the other hand, you have the upside risks that come from energy prices and the widespread use of indirect taxation, especially VAT, by countries that need to consolidate their budgets.

Whether banks return LTRO because they do not lend it because of risk aversion or because credit demand is weak, I am not in a position to say today.

Let me go back to the question you asked, because the two are closely linked: we saw from our analysis that risks had augmented and this was the reason why we took today 's decision.

The important thing with the LTROs was that, again, we removed tail risks coming from the lack of funding that would have happened in the first quarter of this year.

It is according to the analysis of all the risks to price stability that we take our own decision.

Taking everything into account, where exactly is the needle that captures the risks to price stability?

So, we have to synthesise a large array of information, and that drives us to qualify the situation as one of moderate ongoing growth, taking into account the downward risks I mentioned.

As I have already mentioned with all due respect to the risks that are ahead of us, which I clearly pointed out, our present assessment is of a moderate, ongoing growth.

On the first question: again, if we have increased rates today, it is because we consider that, taking everything into account, risks to price stability had augmented and we had to counter these risks to price stability.

OMTs are, as you know, a fully effective backstop that is devised to remove the tail risk for the euro area, and we stand ready to act.

They are a device to remove tail risk, while -- at the same time -- not removing incentives for fiscal discipline, and delivering price stability.

As regards your second question, the risks that are associated with our enhanced credit support measures are those you mentioned.

But we concentrate very much, as you know, on the risks to price stability.

This is extremely important for confidence, but it also worked extremely well to prevent the materialisation of deflationary risks.

Observe the market risk that we have in front of us.

And everybody knows that if we had to do something to guard against inflationary risks, we would do it.

We can not sit back and let these risks go by without reacting.

I am convinced -- and we are all convinced -- that there are important risks and that is why we have to be vigilant as regards market risks.

But that does not mean, obviously, that there are no risks, and that those risks are not of great importance.

I accept that it takes time to realise that you are in a very different new environment, and I also understand that there is a certain asymmetry between the decisions that you take to toughen considerably your risk management and the decisions that you take to get back to a more normal position.

But, in addition to everything that I have said, that is to say low real long-term interest rates in Europe and in the United States on the best signatures, you have an assessment of risk which, even after the corrections of May and June, remains at a low level.

In our last Financial Stability Review, we had stressed - Lucas Papademos will certainly remember that because he was the one who presented the report - the risks associated with hedge funds and we even had a specific box in that report in order to explain to all the observers how we see the risks posed by hedge funds.

With regard to your first question, the Governing Council was unanimous in thinking that a significant decrease in rates was appropriate in the present circumstances, where we see an alleviation of the upside risk to price stability.

What is important is that we were unanimous in considering that the alleviation of upside risks to price stability was sufficiently clear to permit us, for the second time in less than one month, to substantially reduce interest rates.

So, a very significant reduction, and that is part of the overall sentiment that we have that not only upside risks to price stability have been alleviated but there has also been a significant regaining of control of inflation expectations, which is very important.

From the last figures that I have given you can substract an element of risk premia that would give you a break even which would be very much in line with our definition of price stability over the medium term.

Our monetary policy decisions have significantly decreased the risk of second round effects coming from lower oil prices on inflation.

And from that standpoint I think it 's a bit too early to conclude in which direction the overall addition of the two risks -- one downward risk and one upside risk -- would go.

So you have to have an insurance premium against the risk of seeing further increases in the definition of price stability.

We said more fundamentally that, given the very favourable dynamism of real growth of the GDP which we have seen over the last few quarters and given the strong growth in the jobs market in Europe at the moment, wage and salary increases that would be higher than what expected at the moment - would pose serious risks to price stability.

As regards the risks, I have mentioned explicitly a number of risks.

I mentioned that it is from the international environment that we see the main risks, which would be downward risks for the real economy in Europe.

In Europe we have an economy that is picking up strongly due to the oil prices and the exchange rate itself, with some indications that the risks for inflation are on the upside.

Of course we always analyse risks to price stability, and I have mentioned very explicitly the risks to price stability that we see.

I have also mentioned the risk of a disorderly unwinding of global imbalances.

And, as regards prices, it is precisely because we consider that risks are on the upside in terms of price stability that I have mentioned this posture of strong vigilance.

Again, even if I said that our own sentiment for growth was balanced on a short-term basis, it means that we have downside risks on the one hand, but we have also upside chances on the other hand.

You know that we consider that fiscal consolidation -- at the present level of the risks and dangers that exist in the various economies of the euro area today -- is improving the confidence of entrepreneurs, the confidence of economic agents in general and the confidence of households.

We consider that it is one of the risks that I have constantly mentioned.

The risks to these forecasts are increasing.

But at this stage I would say, we remain very alert, but we do not see a change in the risks to price stability.

On your second question: no, we do not see a change in those risks.

The exercise also envisages adverse conditions in financial markets and a shock on interest rates to capture an increase in risk premia linked to deterioration in the EU government bond markets.

We also have downward risks, to the extent that the new environment that we have had since the two meetings is clearly influenced by the fact that we have had a bad evolution as regards the price of oil.

In French I would say" chance '', the chance of there being upward risks to growth, but we will have to see whether they materialise.

As regards the risks to growth -- upward or downward -- I would not say that we have changed our judgement substantially or significantly.

As to your argument that you have never heard me so hawkish: well, the signs are increasing that risks to price stability are growing.

And when we look at the information we can extract from financial markets, namely the five-years forward five-years break-even inflation rate, which we consider one of the most pertinent indicators of information that we can extract from financial markets, we are at a level of 2.5% which is in line with our definition of price stability taking into account the risk premia that are embedded.

As regards inflationary risks, they are on the upside, and this is a sentiment which we also see fully confirmed by the information we have received.

You can see what conclusions we draw from the changes in our own assessment of the risks to price stability.

As regards the inflation risk we consider that this risk is going upwards and that is why we said vigilance is of the essence.

That is a risk that we always mention.

As regards the most important risk, it 's the constant position of the Governing Council that the most important risk would be second-round effects.

We of course have to prevent this risk from materialising.

This was also my response to your third question: I do not see these second-round risks materialising at the present moment, including in wage and salary formation, but we have to remain vigilant.

The upward move of the ranges is very clearly associated with these dangers and risks.

No, I think that this risk has not augmented.

Second, I have always mentioned on behalf of the Governing Council that the risk of a disorderly unwinding of global imbalances is a risk to growth that we have to be aware of.

Unfortunately, this means that the materialisation of the risks associated with further increases of oil prices that we mentioned earlier is now being observed and this is crystallised in these projections.

On the first point, I mentioned the risks that we saw to prices and I mentioned a number of those risks -- such as the increase in the price of oil -- which we have observed in the past, unfortunately, I have to say, and which are still a risk.

There have been questions in past press conferences on whether we considered the double-dip an important risk and I was relatively prudent, but positive.

We consider the risks for growth to be balanced, on a short to medium-term basis, and to be on the downside over the longer term.

This is particularly the case as regards the geopolitical risks that I mentioned.

I would say that on a short to medium-term basis, the risks to growth are in our opinion balanced.

On a longer-term horizon, we see a number of downward risks.

On the particular impact of geopolitical risks, I do not see, at this very moment that these have contributed in any significant fashion to hampering growth.

But it is clearly a risk that has to be taken into consideration.

As regards our assessment of the risks to price stability and to growth I have told you clearly that we saw the risks to price stability over the short, medium and long term to be on the upside.

Our concept is very simple: we do what - in our opinion - is necessary to counter the inflationary risks that we see, to deliver price stability over the medium term and to be credible in the delivery of price stability.

So the question on how to allocate risks in the euro area has been with the Governing Council since the very beginning.

Originally, in the early times, there were two lists of collateral, one risk-shared, the risk of which was shared, the so-called Tier 1, and one where the risk was not shared, and that 's Tier 2.

Second point: again, we consider that when we take a decision, be it a decision to increase rates or leave rates unchanged or whatever, we are confident that it is what is needed at the time we take the decision in order to continue to cope appropriately with the risks for inflation.

As regards the risks, I explicitly mentioned the downside risks for growth and the international risks that are there and should not be forgotten.

And, as we have always said, and as my predecessor always said, we incorporate all pertinent information to see what the risks to price stability are and what the appropriate response is in order to cope with those risks.

These are the two major risks that I have been mentioning.

Oil prices are on top of the list of risks -- certainly in the eyes of this institution, and also in the eyes of all others -- and there is also the issue of imbalances.

On the first question, we monitor closely any potential instance of risk to financial stability.

On the downside risks -- and there I am not on the external, but on the domestic, side of the coin -- I would say that since Q2 and Q3 of last year we have observed something materialising which had been expected for quite a period of time, namely the pick-up in investment.

In that case, risk-sharing is fundamental for the effectiveness of monetary policy, and by the way, to address these risks, OMT is there, ready to be acted, in case there were risks of that kind, of that nature, tail risks were to materialise, and that programme is under full risk-sharing.

I would say, to the extent that we see the development of this ongoing economic expansion, we see risks progressively augmenting

As regards the risks to growth, I have mentioned that it is on the external side that we see the major risks.

And so, in a sense, the baseline scenario of the ECB has not changed, although the downside risks to that baseline scenario are now materialising.

And we want to do this to keep the risk for the ECB balance sheet -- and I have said this many times -- very, very low.

One is risk aversion, another is a lack of capital, and the third is a lack of funding.

What we said is basically that downside risks are materialising for the economic outlook, and that this would dampen price behaviour in the short and medium term.

There were some risks highlighted but the conclusion was positive.

We still have all our artillery ready to contain inflationary risk in order to pursue the objective of price stability.

Of course, the collateral they give should be acceptable and should not increase the risk of the balance sheets of the ECB.

Of course, if the risk premium is high, then this will be less effective.

We thought, taking into account the trend of the baseline scenario and taking into account the risks to price stability, according to our analysis of their presence and their dynamics, that it was the right decision not to move this time whilst, at the same time, clearly, we have increased vigilance and I also commented on what is presently expected by markets.

On the question of bubbles, one of the reasons for taking the decision that we have taken today is that we do not really see any risks for inflation expectations, on either side, certainly not on the upside in the short or medium term.

So we 're very alert to that risk.

There are people who are convinced that TARGET2 balances are a big risk for countries.

The data should prove to these people that now the risks are lower after OMT.

Finally, I am sure you have not forgotten that, in the early months of 2012, how some people were saying how big, immense were the risks that we were undertaking with these measures.

Have we seen any of these risks materialise?

The answer you get is that the net rate of return, adjusted for the risk of lending, is not high enough for them to lend.

But the perception of macroeconomic risk is still there, and that is a question of time.

Before OMT we had some expectations of deflationary risks, and that 's over.

I have told you that risk sharing or no risk sharing was not a fundamental aspect of the effect, of the effectiveness of our monetary policy measures today, while it is a fundamental component of our OMT programme.

On one hand you want to keep the principle of full risk sharing in place.

We look at the situation with a view to weighing the risks.

We conduct a full examination of the situation through our own grid of analysis -- namely, what is the balance of risks to price stability, incorporating all elements.

Again, as I have said, we look at it every month on the basis of the full body of information available and we analyse this balance of risks.

The rates would not be as low as they are if risk premia were incorporated to take account of inflationary expectations over and above our definition of price stability.

By ensuring and being credible that we are correctly assessing this balance of risks, we contribute massively to helping Europe, because we give credit to the very low market rates that we are currently delivering.

We have to assess the balance of risks to price stability, which is the magnetic north of our compass.

All this produced lower inflation and so we had to recalibrate, and we are going to do this on and on, if the external conditions will put at risk the achievement of our objectives.

It is clear if aggregate demand is much stronger or weaker, then the balance of risks to price stability changes and we are legitimate in changing our interest rates, whether it is up or down.

All the other elements contribute to this balance ; they include of course aggregate demand, which is a major element that we have to incorporate into this balance of risks.

And in my introductory statement I had mentioned risks.

It does not mean that we can not change this policy stance if we have new information and if the balance of risks to price stability changes.

The balance of risks I am referring to is always a balance of risks to price stability, which is the ultimate decision-making step.

And the fact that we have, at the same time, difficulties in some countries such that there are significant risk premia can not in any respective make us forget that the solid foundations underlying the functioning of the euro area are precisely the stability and the confidence that we are preserving.

If the balance of risks to price stability were to change, then we would change our own monetary policy stance.

We incorporate everything and we would change our monetary policy stance upwards or downwards on the basis of this balance of risks analysis.

No, this time I would n't say that we 've discussed the side effects and risks, but it 's a discussion that we have ongoing anyway.

So that 's why, first of all, try to know and learn as much as one can about these risks all the time.

As I said, since the beginning of the crisis, we have n't seen any threat or materialisation of the risk of deflation.

There are risks if the price of oil is above what I just said.

There we of course have a downside risk as regards growth, and this is something which is important to consider, i.e. that we are in a risk environment and of course there are also risks as regards headline inflation.

It is always this balance of risks to price stability that we are weighing.

We have an analysis of the balance of risks to price stability, which leads us to the conclusion that the present level of interest rates is the kind of level which ensures price stability.

That ` s why we have never seen either a materialisation of the risk of inflation or a threat of deflation in the eyes of the market.

As always, based on the staff projections, we qualify the balance of risks.

However, the balance of risks has, in our judgement, changed.

I 've just given to you figures about credit: credit 's picking up, it 's coming back, but it 's very, very subdued yet, and we do n't see especially systemic risks.

We certainly have in mind that the situation ahead is full of geopolitical risks, and that 's why we have to be alert.

Second, as regards the balance of risks for both growth and inflation: if I compare the situation today with what we said a month ago, I would say that a month ago we considered the risks to growth to be balanced, which is not the case today.

The significant change is that today we consider that there is a downside risk to growth.

As regards inflation, last month the sentiment was that there was an upside risk to inflation, while today the judgement is that the risks to inflation are balanced.

As regards the ranges for this year and for next year, we are of the view that risks are not balanced and that we have to take into account downside risks.

We also looked very carefully at the balance of risks for inflation, and again we changed our position, taking everything into account.

It 's quite clear that our monetary policy stance avoided that risk, and it eased the pass-through of lower oil prices into higher consumption and in due time higher investment.

A number of us thought that, all things being taken into account, all information and analysis of risks, we had a case for increasing rates.

We took into account all the information that we had ; the projections of the staff of the Eurosystem and the risks to price stability based on both the economic and the monetary analysis.

Of course, there are risks and I 've dwelt on that but if you have any question I 'll be glad to take up.

As I said the downside risks are still there, but they are diminished.

We 've seen that in the past and we are aware that this is a risk.

Overall the risks to growth have been assessed as still broadly balanced.

Also, when we look at the composition of these answers, we see that the risk aversion factor, which used to be a stronger limit to credit expansion, has lost a lot of its weight, if not all.

Our position, I said it in the introductory remarks, is that the risks for price stability have further increased.

When the OMT was designed, we had the perception and the evidence that there were tail risks in the euro area, namely that there was a bad equilibrium for certain countries in certain markets.

We are fully aware that the most recent soft data point to the downside, which is why you will find several references to downside risks in the Introductory Statement.

The" serious downside risks '' were taken off the sentence, and I was represented as having only said the first part.

It was the" worst is over, but there are serious downside risks ''.

But that urgency that was prompted by the risks of deflation is n't there ; that was the judgement, the assessment of the Governing Council.

Again there was a general recognition that the balance of risk has improved certainly as far as growth is concerned.

The third block was a discussion about risks, about the economic situation, how it has evolved.

If we move to inflation, I would say that risks of deflation have largely disappeared.

That is a fair assessment -- although we 've got to be very, very careful about this assessment because our experience of the last year and a half has been that we were expecting some significant economic impact from the various risks that have been materialising.

Now, these risks, some of them have materialised but we have n't seen yet a significant economic impact.

So we are all asking ourselves -- there are certain risks that are unambiguously negative.

The importance of domestic risk has decreased and the geopolitical global risk share of importance, if anything, has gone up.

But I am saying this because that 's certainly a relevant risk source that we have taken into account in our discussion.

In our introductory statement there is a reference to geopolitical risk or geo-global risk.

If one wants to assess the balance of risk as it has been evolving over say the five, six months we would say that the domestic sources of risk have been more contained.

And it is one of the reasons why we still think that the risks to price stability are on the upside, rather than on the downside.

But all the data that have come out also confirm our assessment that the risks are on the upside, rather than on the downside.

If you are convinced that all indicators, as well as the two pillars on which our monetary policy strategy is based, are already now pointing towards increased risks to price stability - and that does include recent developments in the exchange rate, which can not be ignored and which is one of the main indicators we look at - then we were afraid to wait.

If we had waited, we would have run the risk, honestly, of being forced to do more than we are currently doing in the future.

We see risks on the upside and risks on the downside.

Our present analysis was explained clearly a moment ago and I repeat:" With interest rates across the entire maturity spectrum remaining low and the monetary policy stance accommodative, we will continue to monitor very closely all developments with respect to upside risks to price stability ''.

It is our judgement that there are upside risks to price stability.

And as regards the average, as I have said, we see the risks for the economy of the euro area as a whole as being broadly balanced.

However, we see some downside risk as far as this picture is concerned.

Again, we decide when we have to decide, we take, as you know, at any moment the decision we judge as appropriate to counter inflationary risk.

We are not saying that these risks are materialising, but they are present and as I observed in the course of the last meeting these risks have gone up, and we want to be vigilant, as people used to say in the old times.

Of course, one of the downsides I mentioned before, one of the downside risks to our inflation projections comes from the exchange rate.

That 's the sense of our discussion about downside risks.

Then there are the deflation risks -- real deflation, not what you implied in your question, because to have negative inflation for a few months is not a deflation situation.

Surveys show that risk aversion is no longer a factor in lending, but it 's actually competition between banks that 's driving lending.

The third consideration is that, some people are saying, negative interest rates would carry the risk of cash hoarding, hoarding cash.

We maintain our rates as they are and we are pretty vigilant, because there are upside risks to price stability.

That increased risk aversion among all investors worldwide and made their analysis more perceptive of the different risks in different countries.

There is a strange" schizoid '' attitude because some people say that our balance sheet is at risk, while others say we should expand our balance sheet to help everybody.

In point of fact our balance sheet is not at risk and many things have been decided at the last European Council which made the Greek debt and the Greek counterparties compliant with our requirements.

Well, if there is a jump in oil prices, as there has been already, in the first instance it is a danger, an upward risk for inflation.

How great the risks are to that assessment?

However, as I said last time, the exchange rate is not a policy target, but it is important for growth and price stability, and we will certainly want to see whether the appreciation is sustained and will alter our risk assessment as far as price stability is concerned.

Again, the fact that we use the additional credit claims as a further way to provide collateral means that we have now addressed the funding issues -- we can not address the shortage of capital and we can not address the risk aversion that has indeed reached high levels.

Upside risks are present and visible.

This remark is also true for the real economy: at the present moment, we see the risks for the real economy on the downside, for a number of reasons that we have listed, the same reasons that I listed at the last press conference.

But, as I said clearly, the risks for us are on the upside, and it is absolutely clear that we have reinforced the message of vigilance.

But we do consider that all the elements that we have are indicating that risks to price stability are on the upside.

And we concluded that the present rates were still appropriate, that upward risks to price stability were augmenting, and that we were in a posture of strong vigilance.

But, again, we consider that strong vigilance is appropriate because we are now clearly facing upward risks to price stability.

We consider that the risks to price stability are on the upside.

We look at the average for the whole of the euro area, so I would say that, as an average, and despite the fact that in Germany the figures are very depressed, we nevertheless have figures that are on the high side, and that is one of the reasons why we have to consider upside risks and have to be strongly vigilant.

Very often we are asked: how do you compare balance the balance of risks to inflation and the balance of risks to growth?

We have one needle, not two, and of course the balance of risks to inflation is influenced by what we have as regards the pressure coming from the real economy, or absence of pressure, and all the other parameters that have an influence on the risks to inflation.

That being said, we also say -- and I have said this before -- that we have real downside risks for the three reasons I have been mentioning: oil price increases, which are of course something that is certainly important, global imbalances, and the level of confidence.

But again an increase in the price of oil has exactly the two consequences you said, it is exerting downward pressure on the growth side and it is adding to upside risks on the inflation side.

On top of the 2% increase which would be the arithmetic consequence of such a measure, you would also have to pay a risk premium because, if you start changing inflation expectations dramatically, the market can expect further changes.

I agree with the statement that if there are risks they are mainly on the upside.

How do I assess the risks to price stability?

If the recent rise in oil prices, which has been significant, persists or even continues to rise, there will obviously be risks to both inflation and output developments.

And I will not join you in making estimates of what the risks for the exchange rate are.

We do see both upward and downward risks to inflation, and the lack of certainty, the lack of confidence and the slow movement of economic activity are helping to keep inflation down.

Apart from that, the exchange rate remains one of our important indicators which we take into account in assessing the risks to price stability when taking the overall decision, as we did today, to establish the monetary policy stance.

It prevents both inflationary and deflationary risks from materialising.

This would avoid the risk that such a permanent scheme would induce ex ante loose policies, and this is very important.

I would also say that there are risks on the upside, as well as risks on the downside, so after due meditation, in the assessment of the Governing Council, we see risks balanced in this respect, as regards the real economy.

Therefore, at the present time, to say that the risks for the ECB 's balance sheet are higher than those for Federal Reserve System and the Bank of England is not correct.

You have to make the comparison in terms of the additional risks caused by the two LTROs.

The comparison of the overall amount does not really relate to the issue of whether risks have increased or not.

You recently wrote a piece on the risks that are in the ECB 's balance sheet because of the LTRO.

But basically, the LTRO had the powerful effect of removing what is called" tail risk '' from the environment.

The risk environment has improved enormously, markets have reopened, both senior and secure markets, covered bond markets, and even the interbank market -- although still limited to the short term and to national boundaries -- has also started working a little better.

When you look at that, we see upward risks, coming from the higher than expected oil prices, from indirect taxation that has been widely used by governments in their fiscal consolidation efforts and from administered prices.

The answer is that when we see a financial stability risk, this should be addressed by the proper instruments, which are macroprudential instruments.

The risk management of the ECB is actually quite careful and should be given credit for this I think.

It was an environment of heightened risk aversion.

This tail risk was not necessarily a credit event in a specific country.

But we can also see downside risks to staff inflation projection coming from an environment which remains weak, from a labour market which, as you can see, remains slack with unemployment actually going up.

The ECB staff knows how to manage risk, but this is not something we foresee.

Second, there was the expectation, that self-fulfilling expectations of a disruptive scenario, or what we call tail risks, would gain momentum.

Finally, I think you are right to underline the issue of wages and salaries as a risk: it is clear that we have a message there today.

And we explained why, despite the fact that there is very abundant liquidity, it does not drive us to consider that we have to change the balance of risks to price stability.

Then, for reasons that were entirely due to the risks to price stability that we had identified and the balance of risks according to our final judgement following our two pillars of analysis, economic and monetary analysis, we increased rates every two months in the second part of the year.

On the second question, we and supervisors in all countries are calling on all banks to be extremely attentive to their risk management.

Today, I can tell you that we see inflation risks in the medium term on the upside, as I said earlier.

On the supply side, you have, predominantly, the issue of risk aversion.

The two longer-term refinancing operations avoided a worsening, or even a collapse I think, of the situation and then the OMT programme removed the tail risk for the euro area.

However, it is predominantly risk aversion that makes supply tight.

The OMT programme removed the tail risk and has been a very powerful instrument in this regard, but we should not forget that the funding crisis that the banks experienced dating back to mid-2011 caused a credit contraction, of which we are victims even today.

On the second point of your question, on whether the ECB would take risks onto its balance sheet, I have actually gone through that a moment ago, and I think that I have shown you how far more difficult this problem is in Europe than it is in the United States.

Fourth -- and it 's very important -- the tail risks, risks of deflation, have disappeared.

Now, about risks.

That 's the balance of risk, I 'd say.

That 's very important, because again if we go back two, three years ago we would see that there was a serious risk of, what we call de-anchoring of inflation expectations.

Contagion was not significant, if any, if at all, so it was a pretty local episode and so we have n't seen the redenomination risk.

The assessment that the Governing Council gave of the current economic environment, of the underlying strength of the economy, while being overall appropriate for achieving the decisions that were taken today, does n't want to underplay the existing risks.

We have n't seen really any redenomination of risk.

Now we have several new safeguards against redenomination risk, so I do n't think this discussion was meaningful today.

There was a discussion, if we go back in 2011 and ' 12, about redenomination risk but the situation was entirely different.

If there were to be financial stability risks in the stock market, for example, they would have to be addressed by the proper instruments, which is not a change in our monetary policy.

But there is n't any real financial stability risk that we can see in that market or elsewhere.

And we do n't see, so far, the emergence of these risks, even in one of the sectors that is most often quoted, like the housing market.

{'riskiness (7)', 'risk (3278)'}

Furthermore, following the general reduction in riskiness, we saw a reduction in the size of the ECB 's balance sheet, as well as a significant reduction in risk premia if we look at what happened on the stock markets and, in general, capital markets.

{'riskiness (7)'}

More generally, the OMT programme has reduced the general riskiness in the euro area, as shown by a variety of indicators.

Today, the capital charges for ABS discriminate ABS unfavourably with respect to other instruments with similar degrees of riskiness.

Current opinions about the different riskiness of government bonds are what they are, namely personal opinions which address a clear issue, the different riskiness of government bonds.

Just to give you an idea: the haircuts on these additional credit claims are very high -- and they are meant to be very high -- so as to make the riskiness of these additional credit claims about the same as the riskiness of the rest of the collateral, for which the haircuts are lower.

{'risky (17)'}

Another example is: we looked at covered bonds and there we distinguish now between retained ones that are more risky and therefore deserve a higher haircut and non-retained ones that are less risky and therefore have a lower haircut.

Basically, our experience from the crisis in the eurozone has shown that sovereign bonds are not riskless: they 're risky and they are in the banks.

These are risky assets in banks ' portfolios, so we have to take this into account.

The big question that I saw in at least one press article was: ` but this is going to be very risky, is n't it '?

Sure, it is going to be more risky.

To ask whether the price of a specific asset forecasts an increase in the inflation rate is always a very risky question.

So we know that these are risky events.

We do n't know yet how these risky events will reverberate on the economic situation.

We welcome the Liikanen Report, whereby especially risky trading activities are being ring-fenced to some extent.

{'roughly (19)'}

One can say that the euro -- at the moment -- is about at the level which, as we also said in Greece, better reflects the fundamentals and it is roughly at average historical levels.

It 's roughly around $ 1.18 and was August 14th so we will have to see.

Let us then move to 15 May 2013: excess liquidity was $ 303 billion, i.e. roughly the same amount as on 19 December 2011, but the EONIA was only 8 basis points.

In the euro area we have only a small share of financial intermediation taking place via capital markets, and a large share, roughly 80%, taking place via the banking system.

If we look back to the trough in the exchange rate in 2012 and then we look at the exchange rate today and we ask ourselves how much this has counted for the low inflation that we see today, we come up with a figure which is roughly 0.4 percentage points.

May I also take this opportunity to say that it is clear that in these countries the rate of development in exports to European countries, as compared with the development of exports to the United States, has been roughly the same over the last two years.

That is to say that, even if the US economy is seen to be more buoyant than that in Europe, one can not say that the US economy has in fact helped these countries to recover more than the European economy, because the development of exports has been roughly the same over that period.

I would say that it roughly confirms what our previous judgement was and what our present judgement is on this gradual recovery which is gradually materialising.

And of this, I would say, roughly 40 billion euros was pledged by French banks that were basically already over-collateralised.

A bank issued a bond in Munich and in Milan, an uncollateralised senior bond, so not a covered bond, and there was spread of roughly 150 or 200 basis points between the two.

{'seem (653)', 'ambiguity (8)'}

I must say, on a personal basis, because we have no Governing Council position in this respect, that it seems to me very opportune to eliminate all kind of ambiguity as regards the facts in this domain as well as in all others.

{'seem (653)', 'believe (492)'}

On your second question, I will only say that by virtue of these convincing decisions taken by the Greek government, we all expect, and it seems to me that we have already seen illustrations of this, that the credibility of the Greek government will increase, and that is the reason why we believe that it was absolutely necessary to take those decisions.

Do n't forget, but it seems that everybody has forgotten that we lowered interest rates on 30 August 2001 and then again on 17 September 2001, and we do believe that with that level we have for the time being, barring new information on events yet to happen, new information to come in, that we have reached a level of interest rates which is consistent in the context of our monetary policy strategy with our declared aim of preserving price stability.

It seems to me that the other major institutions also believe it will.

{'seem (653)', 'cautious (120)'}

First of all, it seems to me that the IMF was cautious in mentioning this.

{'seem (653)', 'may (1031)', 'maybe (396)', 'might (766)'}

It may seem that Europe is the source of problems that Brazil or China might have -- and I think that there is maybe a grain of truth in that -- but I would not say that the reason why the global economy might weaken in the near future is because of Europe only.

{'seem (653)', 'may (1031)'}

In that way, as it may seem, it is bearable from the budgetary point of view.

That means that the extraordinary growth rates which we have seen in the United States for a prolonged period of time and which we and other authorities did not regard as being sustainable in the very long term are coming down from annualised rates of 5 1/2% or even close to 6% per quarter in the direction of lower rates for what seems - to me - to be a normal and to be expected - may I call it - soft landing in the United States, which is in the interest of the entire world.

No, it is true and, if I may take this opportunity, what you are referring to is the recently published World Economic Outlook of the IMF in which it was said - as far as monetary policy in Europe is concerned - that, admittedly, monetary conditions were ample, but - given the economic situation and the likely development of inflation - there seemed to be no need to tighten monetary policy.

And that is also something which calls upon us to do what we have judged appropriate to do and also to convey messages that are not easy to convey and, from time to time, may seem a bit harsh to the destinatories.

Some survey data seem to indicate that there may be some stabilisation at low levels.

You may draw your own conclusions, but it seems to me that I was very clear on both May and June.

{'seem (653)', 'perhaps (538)'}

But it seems to me that perhaps you are exaggerating the semantic meaning.

The first two causes seem to be pretty relevant, pretty significant -- perhaps more significant than our asset purchase programme.

And also the credibility of our monetary policy concept, which -- at the beginning -- was perhaps criticised a little but it is now less and less criticised, it seems to me.

{'seem (653)', 'possibility (303)'}

Actually in a sense it seems even more a remote possibility than it would have been a year ago or even six months ago.

{'seem (653)', 'predict (30)', 'might (766)', 'perhaps (538)'}

Had you asked the question yesterday, it seems to me that you might perhaps have said that the market and most of the economists were predicting 50 basis points.

{'seem (653)', 'probability (40)'}

I do n't want to confirm anything except what is in the market as regards future probability which, as I said, does n't seem to me aberrant on the basis of the present level of information.

{'seem (653)', 'risk (3278)'}

I am very pleased that risks to inflation seem to be balanced at the moment.

The upside risks relate to food prices, which do not seem to be a major risk today for euro area inflation for the reason that, first of all, the increases have so far been viewed as one-off shocks.

But I would just like to give the warning that the risks seem to be increasing.

I have already responded in terms of volume and, frankly speaking, I think that all the observations about the risks taken do not seem appropriate.

{'seem (653)', 'suggest (391)', 'risk (3278)'}

So I would rather suggest that you interpret our comments to mean that we have to take into account the fact that the risks coming from the United States seem to be strengthening.

{'seem (653)', 'volatility (407)'}

However, it seems to me that the volatility that we observed in the EONIA 's behaviour on certain occasions in the past has reduced quite significantly and we have taken note of this.

And it seems to me that in a world which has been marked by extreme volatility, extreme short-termism and extreme absence of consideration for long-term values, such as long-term price stability and financial stability.

{'seem (653)'}

Because, in spite of everything that seems quite far-fetched at this point in time.

I said the same thing as I said at this press conference, namely that our monetary policy stance seems appropriate in the current circumstances.

And all the factors that we have mentioned in the past explaining the depreciation of the euro now seem to have reversed.

And that does n't seem to be conducive to growth.

That being said I would also draw your attention to an argument which I see from time to time and which does not seem to me to be appropriate.

Full completion of the single market is a target which seems to us extraordinarily important, not only because it is one of the major goals of Europe as a whole, but because it would considerably improve the functioning of the European economy.

It 's not clear which of these explanations seems to be more robust.

It seems to me that the remark you were alluding to is part of this overall sentiment.

It seems to me that the market has understood that these were important decisions.

I think that, given the current conditions for the situation of, and especially the outlook for, prices, there seem to be -- as I have said -- no inflationary pressures and inflation expectations are firmly anchored over the medium term.

It seems to me that a number of effects in this respect are not taken into account by part of the analysis which is being done.

It seems to me that you would have to ask governments the question.

We have to cope with this exceptional intensification of the crisis which came in September 2008 At the moment I am speaking it seems to me that authorities, whether central banks or governments, have really taken decisions that are until now commensurate with the exceptional circumstances in which they were put very sharply, very abruptly, in mid -- September.

But I must confess that we saw with some relief that the strong appreciation which had been evident in the months before seems, at least for the time being, to have been interrupted.

Frankly, it does n't seem likely today.

On your first question, I would say the money market seems to be showing signs of better functioning.

It seems to me that the global diagnosis on Europe and on the euro area has gradually incorporated what I have just said, namely that one has to consider the fundamentals.

On your first question, I have nothing further to add to what I have said: a zero rate does not seem to us to be appropriate at this stage.

And I can never repeat that often enough because it seems to me that this is the main message.

So, there seems to be, at least this year, an interruption - although we do hope that it is temporary - in the ongoing movement towards the ultimate goal to be achieved over the medium term.

And, therefore, your question seems to run counter to that statement.

And the increase in long-term yields -- which by the way is a very recent one -- does not seem to have had any visible effects.

If, as the President just said, conditions seem to warrant at a certain point in time special fine-tuning operations, we can always conduct them, but in most cases the framework we have is enough.

So the liquidity conditions and the financing conditions for private agents do not seem to be tight or to have any consequences for economic developments.

At this stage, the overall level of collateral that we see seems to be sufficiently comfortable.

And it is three years because it seemed to us the maximum most effective maturity to target: it is close to our short-term policy rates ; it affects also the medium-term yield curve ; it is close to the rates that are being used to lend to the private sector ; it is, in a certain sense, similar to the maturity we used for the LTROs ; and also, in a very indirect way, it decreases concerns about our seniority over the bond holdings.

At the same time, we see that we are in a bad equilibrium and, therefore, policy action, though convincing, does not seem to produce -- at least not in the relatively medium term -- the results for which it is geared.

The two questions seem to me to be related to the spreads between the overnight index swap rate and the various EURIBOR interest rates.

It seems to me that it is certainly something which we have in mind and we will have to examine that and reflect on that.

All institutions have to cope with exceptionally difficult situations, and it seems to me that it is up to all of us to be up to our responsibilities -- the private sector as well as the public sector.

And to embark on personalisation does n't exactly seem appropriate to me.

It is a response also to your second question, it seems to me.

Such diversity seems to be a normal feature of a very vast economy.

I will be soon in Estonia and we will have the opportunity to review everything, but at this moment in time I would say that the preparations seem to be very much on track, and we are satisfied with that.

Yes, it seems like that, and that 's exactly right.

In the case of Spain it seems to me that we are observing today a certain appeasement vis-à-vis the previous evolution.

But all in all the picture seems to be better than it was a year ago.

In other words, it seems that the signs we are seeing now confirm the baseline scenario of the ECB staff projections for the second part of the year.

In any case, it seems to me that it is something which should be examined, again, not only in the European context, but also at the global level.

This seems to be another Angst, by the way, our alleged lower level of political independence.

On the first question, it seems to me that I have already responded.

And what I said today is that the present situation and the prospects for the increase in the rate of inflation are such that they seem, for as far as we can look forward, also to remain well below that ceiling of 2%.

What I know is that on inflation outlook, Brexit did n't seem to have any major impact at this point in time.

Because this development has become much clearer, unlike what you seem to indicate in your first question, precisely over the past few weeks as many new forecasts have become available from various international institutions and private forecasting groups and as new actual data have become available.

Until now, it seems to me, these have been quite well understood.

Now, deflation does not seem to be just around the corner, but HICP will be safely under the 2% limit we have set as the maximum which is compatible with price stability.

This therefore seems to be the characteristic of a very vast single economy of more than 300 million citizens.

Without giving details, what I have seen until now seems to me to be going in the right direction.

Using best practices as a benchmark seems to be the obvious thing to do when you look at the European Union.

The financial system seemed to be on the verge of collapse.

It seems to me that the lessons from the past absence of credibility are such that the government in question is getting the message very clearly, but we will see what is being done.

I will only say that, as far as the euro is concerned, it seems to me that there is a tendency to forget the situation before the euro.

In this part of the world, things are not going well because you have pervasive unemployment and you have very low, weak economic activity, and in some countries with a recession that seems to never end, so you ca n't expect people being enthusiastic about that.

If I look at the long-term perspective, I would say that it seems to me that the market is convinced that we will deliver that kind of stable long-term environment that is justifying low long and medium-term market rates conducive to growth and job creation.

And it seems to me that you have all the nuances that are appropriate in such a, of course, very important judgement that we have collectively made.

First of all, on the first question, which deals with the Stability and Growth Pact, I will say that we had a very clear position in the Governing Council, among the 18 members of the Governing Council, and you have it in writing, but I will repeat it because it seems to me that it is important.

Our duty is to give the markets not what you seem to be hinting at: it is to give them the clearest explanation of what our reaction function is.

Contrary to what you seem to indicate, we expect the first quarter of this year, in which we now are, to be pretty much the same as the last two quarters of last year.

Therefore we think that our facility would open the market to competition -- would increase competition -- and this seems to be a reason to offer these services.

What we have to deliver is price stability in the medium run and what I have observed in the past is that the contribution of administered prices on inflation has been substantial year after year after year -- even if it seems bizarre, because we should not normally have to cope with such a big contribution of administered prices.

But, so far, the countries that have indicated that they are thinking of moving in that direction seem not to be an overwhelmingly disturbing factor for the euro area as a whole, let me put it this way.

I did n't mention it specifically, but, in assessing all the indicators we had, we paid due attention to the fact that in various regions of euro area there seems to be an acceleration in wage demands which, by itself, is adding to our conviction that it is about time to raise interest rates.

We seem to be fairly far away from any such high-class problem.

So, not only speaking in mathematical terms, it seems that we have to - if you look at the curve - both bring down the line of the curve and reduce the angle.

In mathematical terms it seems that the first derivative of the distortion is positive.

The dynamics of M3 corrected seem to be less that we thought earlier.

With the benefit of hindsight you see that it worked very well: we happen to be very predictable ; and the market has understood - it seems to me -- pretty correctly what we had in mind.

The lack of capital also seems to have improved significantly.

Third, the principle of a single voice is essential and markets have understood it very well -- at least it seems to me.

The work is not finished, as your friend seemed to say, and should continue, and that is very much in the hands of national supervisors.

And I would not comment particularly on one economy, because it seems to me that what we are observing in terms of surveys, as well as in terms of soft data and hard data, is by and large in line in the various national economies that make up the euro area.

What we had proposed to the market in a very transparent way was the size that, for us, seemed to be consistent with the immediate return to what I call a ` neutral liquidity situation '.

And the market has understood that pretty well, it seems to me.

It seems to me that your question was more or less mixing up two things.

Subsequent events, the extraordinary performance of Ireland -- next year Ireland will be the fastest-growing economy in Europe, in the euro area certainly -- seem to say that after all, that decision was n't that stupid.

It seems to me that it is this very comprehensive set of information that has been captured by the market, and which signals that things are going back to normal progressively.

On the contrary, it seems to me that this was an early judgement, which was wrong, and that there is now a feeling that it is an important step forward.

Regarding the results of the bank lending survey, it seems to me that the period of the survey was not the best period, because it was done between 14 June and 2 July 2010.

That being said, in the figures for June loans to non-financial corporations over twelve months were at -1.9%, which is a little less negative than in the previous month and up to now seems to us to be in line with historical observations after a recession of the size that we experienced, unfortunately, in the previous year.

As regards households, we see that the dynamism of loans to households seems to be confirmed, at 2.8%.

It seems to me that this confirmation that we will have a transition period was understood by the banks as something important.

It is true that we expect the two last quarters of the second half of the year to be significantly less dynamic than the second quarter, because the second quarter seems to be really exceptional.

Frankly speaking, it seems to me that all the criticism about the absence of transparency of the ECB can be taken with a grain of salt.

On the other hand, we have seen that our baseline scenario, which foresees a gradual recovery by the end of the year, seems to be gradually being confirmed by a variety of soft indicators coming out on the positive side.

What happened in the last month is the monetary tightening that has taken place in various segments of the interest rate curve, in the presence of a by and large continuing weakness in the economy, in spite of the new soft indicators which seem to point not towards a dramatic improvement, but towards a slower pace of worsening of the economy.

But there seems to be, as the examples have shown, very little alternative.

They do n't seem to be so far from what we can appreciate now.

They do n't seem to be substantial.

This is not particularly original, because it seems to me that it is very much the attitude taken until now by most international institutions and observers.

It seems to me that, in the most recent period of time, it has become even clearer that a strong dollar is in the interest of the United States.

There is also, as you know, capital controls are being gradually lifted, which also is a sign that confidence seems to have returned.

And they do seem to indicate that the social partners, in Germany, too, have taken their responsibility for their future, and for their country, very, very seriously.

It 's quite clear that if it were to be a short-term effect, as you seem to hint at, we would look through.

If you take Malaysia, Thailand and South Korea, for instance, they are clearly countries in which reforms are being implemented and their economies seem to be gradually picking up.

It seems that, after all, there are good signs also coming from these regions, and from the emerging economies in general.

What we have done until now -- and I repeat it because it seems to me that it is important -- is to permit 305 million citizens of Europe to benefit from a financial environment with objectively low medium and long-term rates that did not exist before the euro.

Now, market estimates and indications by individual banks would seem to say that, overall -- so not only in the first two tranches, but also in the periodic operations -- a take-up between $ 450 billion and $ 850 billion should materialise.

Also, let me add that the indications coming from the bank lending survey that, as I just said, show a gradual -- show actually I think for the first time a pickup in demand for loans and a gradual lessening of tightness on the supply side, would seem to indicate that these TLTROs will actually happen at the right time when there is demand for them.

Now I take issue with the statement that the US economy seems to be stabilising at a rate of 4%.

The reserves of both the ECB and the NCBs are entirely and exclusively in the hands of the national central banks themselves and I am inclined to ignore advice such as that which seems to be coming from the German banking community.

There are countries that, all in all, seem to be living through the crisis with lower growth rates, but are experiencing no sizeable developments that you would call a recession.

So we are still looking, but it seems that it would be feasible to at least largely overcome that problem, if it were to arise again, with the available solutions.

That feeling of dissatisfaction has disappeared now that the euro seems to have turned the corner.

Germany had very flattering growth last year and seems to be continuing to record significant growth even in the first quarter.

And I will refer to what seems to me to be some kind of emerging consensus.

In English it would be -- it seems to me --" ex ante ''.

We are observing elements that are in some respects encouraging and seem to show that a number of markets are going progressively back to normal, or closer to what would be normal functioning, but it is not the case for all the markets concerned.

It seems clear to me that it was a good way to look at the situation and that all the information we have had since then has confirmed that we have a trend which is around our growth potential.

In the present particular case, even if the Governing Council did not discuss that, I would say that it does not seem to me in line with what would be appropriate.

The tightening seems mainly to affect large transactions, such as loans granted to finance mergers and acquisitions.

And I draw your attention to the fact that, from this standpoint, our two-pillar strategy seems to me particularly pertinent, because we are in precisely a situation where the most important issue is what exactly is the influence of the financial sector on the real economy, and what are the dynamics behind it?

I commented in advance it seems to me.

They have improved their own resilience, it seems to me.

It seems to me very clear that this means structural reforms, it means sound fiscal policy, it means sound monetary policy and also pursue liberalisation of all markets.

I have to say that what we have seen till now has been, it seems to me, quite well understood and absorbed by markets that have proved to be resilient, and I expect that it will continue to be so.

So it seems to me that Romania has a lot of homework to do.

But I have absolutely no information and it seems to me absurd to be frank.

It seems to me that we have a good" M ''.

Oh, does not seem to be very impressed...

The fourth quarter of 2011 was very weak, but we have seen a stream of both survey and hard data that seem to point to a stabilisation in economic activity at a low level.

As far as the first question is concerned, my understanding -- of course I am with you now -- but my understanding is the market reaction was pretty muted to our announcement, to our policy announcement in spite of the fact that it 's a policy announcement of a certain importance, which seems to say that our communication to the market has been pretty effective.

And it seems to me that this has now been clearly established, even if we always have to remain alert.

I would say that it seems to me that I am in line with what is presently being said by a large number of observers and public and private institutions.

First of all I have to say that the Polish economy seems to me to have been one of the economies which was the most resilient in the circumstances.

How do you reintroduce a level of discipline which seems indispensable in order to avoid problems at a global level?

There is a good criteria, which is to see exactly what you do in terms of anchoring medium term inflationary expectations, and from that standpoint it seems to me that our own results are solid.

I would say that this is work in progress, and it seems to me that a lot of directions have already been identified as being the right ones for the financial market.

I also have to mention the great corporate dynamism, which seems to be due to two major phenomena: investment -- and one of the good pieces of news that we have at the level of the euro area is that growth over the last period, particularly in Q2 of this year but also beforehand, seems to have been driven by gross capital formation.

As regards the most recent observations in Ireland, I would very much like John to comment on your question but it seems to me that we have been going in the right direction, and the signs are that the tensions that were observed in the past are progressively, slowly, cooling down.

Just to pick up on that point in relation to the trend on the CPI and the trend on the HICP: It seems to us that for 2007 we would expect the harmonised index to be about 2.5% and the CPI which, as you know, is affected by mortgage interest rates, to be about 4.8%.

We continue to observe the situation carefully, but for the present moment it seems to us appropriate.

What is clear is that for reasons that are complex, it seems to me that a lot of important new information -- for instance all the positive decisions that have been taken, the fact that the various countries concerned have changed and improved their fiscal policies in comparison with what existed some months ago, in some cases some weeks ago, and the fact that a number of very important decisions have been taken by the European executive branches and by institutions such as the IMF -- is being progressively captured and incorporated by market participants, investors and savers in their own analysis.

So, again, the fact that investors, savers and market participants are progressively incorporating this new information into their own decisions is something which seems natural.

It seems to me that we are observing this phenomenon.

It seems to me that you always got me right in the press conference.

I will not comment more on that as it seems to me that we are clear enough.

It seems to me that a number of observers, including market participants, often forget that we have a mandate, and that this mandate is clear.

It seems to me that we have proved in the past that we were able to do whatever was necessary to deliver price stability, including in two periods in particular.

I have underlined the phrase" progressive withdrawal of monetary accommodation '', and what has happened in the past seems to provide all the appropriate keys to understanding how we act.

That being said, I have added today that what I see as regards the very short-term expectations of future moves seems to be reasonable, taking into account all the information I have.

Even though, as I have said, market sentiment seems to be improving slightly.

But certainly all the conditions seem to be there for compliance with the programme which is, of course, a very important objective.

All I would say is that, from the information I would extract from stock market -- over the period of time you have in mind -- what I call our baseline scenario seems to be confirmed and certainly not negated.

But the rest of the economy does not seem to be inclined to generate upward pressure on inflation.

As I have said several times, it seems like labour market flexibility has been placed squarely only on the shoulders of the young population, which is one of the major reasons why youth unemployment is so high in some countries.

This year, however, seems highly unlikely to me.

Second, as regards the market expectations for future action in a short period of time -- what I am observing seems to be reasonable.

And finally, given the size that this programme will have and the fact it 's so broad-based all across all countries, the solution that we found seemed to be the most reasonable.

And from that standpoint, it seems to me that we have a number of indicators which are encouraging.

What has been observed seems to indicate that investors are viewing it as a serious orientation.

Now the situation seems to be different.

We are rightly alarmed that there has been stress in the markets, and some of the indices that seemed to point to the stabilisation of financial markets until, say, three weeks ago, are now increasing again.

And especially now, that we 've seemed to enter into a period of time where economic conditions are improving.

It does not seem to me that our reputation is that we are behind the curve, at least when I read various articles.

It would have to be carefully checked in historical terms, but it seems to me that it is a" première '', this cooperation with the Federal Reserve System for delivering liquidity in dollars on this side of the Atlantic -- involving not only us, but also the Swiss National Bank -- and we are satisfied with the present way it functions.

In this sense, credit flows seem to have stabilised.

The fact is that when I made the statement, it seemed that all the signals of tensions in the financial markets after the incredible situation in November and December were about to fade away rapidly, which they did, and now they are worsening again.

In other words, countries seemed to grow more together ; an all-time low since 1997.

And, looking at the developments of the past few weeks or even months, I would not go along with your statement that the recovery seems to have faltered.

I also had the opportunity -- and you were a witness, it seems to me -- to welcome him at the Bundesbank itself when there was the" passing of the baton '', between Axel and Jens.

I am very pleased to hear the sounds from the other side of the ocean, that the prospects there seem to be bright.

And again, taking stock of the collegial experience and wisdom that we have around the table -- but I was sufficiently explicit on that, it seems to me.

The figures I have -- again, this needs to be checked very carefully -- but the figures I have would seem to indicate a reduction from 59% in 1971 to 42% in 2000.

What I have said on this impact seems to be true for the euro area economy.

I do not want to qualify the situation in other parts of the world, but it also seems to be reasonably true for other major economies in the world, notably for the sister economy I have mentioned.

All the other south-east Asian countries seem to be crawling out of the trough.

What the staff has worked out as far as economic growth is concerned seems to me very much in line with the sentiment of the Governing Council that I expressed in the previous press conference, when I said that, in our opinion, we would be around potential, potential being around 2%.

So I am only referring myself - and it is absolutely right to say that, it was a remark which we made - I am only referring to the accounting of FDI and it seems to me that it is quite factual.

So I do not know whether others were more efficient in delivering a financial environment which would be more favourable for growth and job creation, but it seems to me that we are trying at least to do our best and we have elements that would substantiate that we are doing everything we can to be credible in delivering price stability.

The one I saw seemed to be in a quite happy mood.

It seems to me that what has been said corresponds to the fact that we have one needle in our compass.

And again, it seems to me that we are doing all we can by preserving price stability, to deliver a financial environment which is good for growth and job creation.

By that I mean that the crucial thing is that we seem to be achieving our aim, which is to maintain price stability.

And, also, if you look at the annualised development of the last three months, you come to the same kind of conclusion -- that it seems to be progressively -- not completely returning to normal but going in the direction of more normal developments in the very last period.

It seems to be a golden opportunity to take further measures both in the sphere of reducing the fiscal deficits and in the sphere of structural measures to increase the flexibility of markets.

And on the last point, it seems to me that the decisions which have been taken by Greece at this stage are convincing.

I will just say that it seems to me that the majority of observers had the decision very much in their minds.

And it seems to me that there is a good understanding at the moment, given the anchoring of inflation expectations.

So this criticism does not seem to be grounded, at least as far as we are concerned.

In that respect Ireland has the benefit of an economy which seems to me more flexible than others.

Of course, in the present circumstances in particular, everything that can go in this direction would certainly seem to be appropriate, without entering into details of the measures.

They seem to be happy with what is going on -- and they certainly know more about what is going on than I do.

It seems to me that, last time, this anonymous communication proved to be totally wrong.

This has been increasing and increasing and now it seems to be stable, or at least the values of the dispersion are no longer going up.

What is being implemented in Greece today seems to us absolutely of the essence and, in our opinion, has to be executed in a very attentive fashion.

{'sometime (9)', 'probably (249)'}

And we will probably review it sometime ahead of the end of the five-year period.

{'sometime (9)', 'risk (3278)'}

And my second question would be: if you consider changing the risk assessment of certain securities for banks, to hand in to the ECB as collateral, do you envision a scarcity of collateral sometime in the future?

{'sometime (9)'}

But I will never exclude that sometime this year, or next year, we will use it.

It says nothing about the size nor the moment of a rate cut, I say again, sometime in the future.

{'sometimes (73)', 'assumption (263)'}

So, for example, the forecasts that were published by the European Commission, although the underlying assumptions were sometimes slightly different from ours, their outcome was virtually identical.

{'sometimes (73)', 'believe (492)'}

We believe that the combination of past decisions -- which we sometimes took against strong advice to the contrary -- and vigilance -- which is, as we say, of the essence now -- will permit us to deliver what it is our duty to deliver.

{'sometimes (73)', 'differ (47)', 'may (1031)'}

And in all cases in our history, which is admittedly not a long history, we have easily been able to reach a consensus about our views and, of course, sometimes someone enters the discussion with a view which may differ from the view that is being held at the end of the discussion.

{'sometimes (73)', 'differ (47)'}

No, we all agreed that we have to make quite an effort to speak with" one voice '' because the song we are singing does not differ at all, but we sometimes need some repetition to achieve full harmony.

{'sometimes (73)', 'may (1031)'}

As I also said at our last press conference, it can not, by definition, always be excluded that there may sometimes be surprises.

But there may be technical aspects that sometimes do not ensure the complete sterilisation immediately.

This may complicate sometimes the decisions in the Council on which wine to choose for the lunch.

{'sometimes (73)', 'maybe (396)', 'may (1031)'}

It is not against the euro -- the euro is maybe the scapegoat for all that -- but it is against the restaurateurs, against the hotel sect