since 2013. during this time, the economy has expanded by an estimated 14 % and the level of gdp is now above its pre - crisis peak. this strong recovery reflects substantial policy efforts at both national and european level, particularly the reforms initiated at the height of the sovereign debt crisis. under the eu financial assistance programme, numerous measures and reforms were undertaken to strengthen the banking system. these included the stress testing and recapitalisation of troubled banks ; the identification of troubled real estate assets and their transfer to sareb ( spain ’ s “ bad bank ” ) ; and the reform of the savings banks. at the same time, actions and reforms at european level, including monetary policy ( longer - term refinancing operations, ltros, asset purchase programme, app ) and the move towards banking union, have ensured liquidity and strengthened confidence in europe ’ s monetary and financial system. financial reforms were accompanied by a series of reforms to labour and product markets and to the public sector. the 2012 labour market reform gave priority to collective bargaining agreements at firm level over those at sectoral or regional level. reforms to product markets, including the law on market unity, have sought to reduce regulatory obstacles to firms ’ growth, although implementation has been challenging. the spanish economy has rebalanced as far as “ flow ” variables are concerned, while “ stock ” imbalances are gradually correcting. banks ’ asset quality and solvency has substantially improved, as reflected in higher capital ratios and a steadily declining ratio of non - performing loans ( npls ). the npl ratio of spanish banks has more than halved from 13. 6 % in 2013 to 6. 4 % now and continues to fall steadily. the banking sector has been able to finance growth with new loans while steadily deleveraging as legacy loans mature. private sector debt has fallen considerably. deleveraging of firms and households is well under way, with debt having declined by almost one - third since 2012. at the same time, the public debt - to - gdp ratio, while remaining very high at almost 100 %, has stabilised. the public 2 / 4 bis central bankers'speeches deficit ratio came down from double - digit levels at the peak of the crisis to 3. 1 % in 2017. more than two million jobs have been created since the end of 2013 and the unemployment rate has fallen from a peak of more than 26 % to 15 %. throughout the recovery, the pace of employment growth has broadly matched that of

that “ credible alertness ”. focus : at the moment, the markets are addicted to cheap money – to low interest rates. politicians, bankers and stock market traders have already become too used to this situation, and as a result the risk of inflation is on the rise. how do you intend to change this? trichet : you can be sure that the european central bank will continue, as before, to maintain price stability. keeping inflation expectations solidly anchored – in line with our definition of price stability – protects us against the materialisation of both inflationary and deflationary risks. we succeeded in avoiding deflation at the peak of the crisis. you can be sure that the needle in our compass will always point towards price stability. focus : how quickly have you taken action during the crisis? trichet : as i have said, alertness is of the essence. on 9 august 2007, for instance,... focus :... just before the us real estate bubble burst... trichet :... we were the first to diagnose that a major crisis was unfolding and supply additional liquidity to the money market. we did so because we had realised that something exceedingly dangerous was developing. focus : could the ecb really raise interest rates on its own – i. e. without the us federal reserve doing so as well? if the ecb were to take such action, the euro ’ s exchange rate vis - a - vis the dollar would be sure to shoot upwards, causing european exports to collapse. and that is something nobody in europe would want... trichet : i am convinced that the us authorities – both the central bank and the treasury – consider that a strong dollar vis - a - vis the other major floating currencies is in the interests of the united states. ben bernanke and tim geithner have made this very clear. focus : do you believe what those responsible in the united states are saying? the us economy is currently benefiting immensely from the cheap dollar. trichet : i believe in the sincerity of the people i have just mentioned. they know that a loss of monetary credibility would be damaging. focus : nevertheless, if the excessively lax monetary policy in the united states were actually the reason why you needed to raise interest rates in europe, you would be unable to do so without the us central bank following suit. trichet : let me repeat myself. every central bank has its own responsibilities –