well as in the euro area as a whole ( 1. 7 % and 1. 3 % respectively for year - on - year harmonised inflation rates in march ) have been decisively supported by our non - standard monetary policy measures. we are now following our central course of gradual normalization. and there is at present a high convergence in our views within the governing council : whether our net asset purchases stop in september or december is not a deep existential question. along with this clear sequencing of gradual normalisation, we also agree that our monetary policy will remain accommodative for an extended period of time. in particular, keeping a sizeable stock of assets is key for easing financial conditions over a long horizon by compressing term premia. so we are predictable, but we are not precommited. what could slow down this course of gradual normalisation? certainly not fiscal dominance : let me be crystal clear, nobody should expect us to delay a warranted monetary normalisation in order to accommodate the debt problems of any member state. instead, we should pay close attention to a possible cumulative risks scenario, the likelihood of which has increased recently : an adverse loop of protectionist threats, unfavourable exchange rate movements, and abrupt financial markets corrections. such a negative loop would tighten financial conditions, and deteriorate the growth outlook in the eurozone. our monetary policy stance would then have to be adapted, depending on the ultimate impact on inflation prospects. in any case, this cyclical expansion provides an appropriate timing for reforms, especially for those that may be costly in a downturn, such as reduction in public expenditures and labour market reforms. the growth and employment performances of other european countries [ slide 9 ] in recent years show that implementing deep reforms can have large payoffs. in spain, for instance, significant reforms were implemented between 2010 and 2012 to reduce the duality of the labour market, to increase labour flexibility for firms and to strengthen active labour market policies. there have been some short - term employment costs, but france would not have to face these costs in the current upturn thanks to the supportive medium prospects, and could enjoy major benefits from structural reforms. 2. this momentum is being harnessed to implement ambitious and consistent reforms. [ slide 10 ] 2 / 4 bis central bankers'speeches however, to take advantage from these benefits, there is a need for consistent structural reforms. the success of the reforms will indeed hinge on perseverance – as no

further reduce imbalances and to foster competitiveness, growth and job creation, euro area countries need to continue with their reform agenda. as regards fiscal policies, governments should not unravel their efforts to reduce deficits and put debt ratios on a downward path. the composition of fiscal consolidation should be geared towards growthfriendly measures which have a medium - term perspective and combine improving the quality bis central bankers ’ speeches and efficiency of public services with minimising distortionary effects of taxation. in terms of economic policies, product market reforms to increase competitiveness will facilitate the creation of new businesses, support the tradable goods sector and foster job creation, while high unemployment rates require decisive structural reforms to reduce rigidities in labour markets and to increase labour demand. i am now at your disposal for questions. bis central bankers ’ speeches