european solidarity, it has also been instrumental in stabilising financial markets and mitigating the risks of fragmentation, thereby supporting the transmission of our single monetary policy to all parts of the euro area. these are not the times to worry that rising government debt today could undermine price stability tomorrow. on the contrary, using fiscal and structural policies more actively in the current environment will, if used wisely, support price stability and foster central bank independence. the reason is that such policies may boost potential growth, reverse the decline in the real equilibrium interest rate and thereby increase monetary policy space in the future. this is why we applaud the clear focus of the next generation eu programme on digital and green investments, which promise to have the highest payoff for society. to support these objectives, it is crucial to swiftly put the recovery fund into action and establish a sound and efficient governance structure that ensures that funds are channelled towards the most productive and sustainable projects. looking forward, governments will at some point need to make a credible commitment to regain fiscal space. but this should happen only once the economy has returned to a sustainable growth path. these efforts should be accompanied by a revision of the european fiscal framework : fiscal rules are too complicated, hard to enforce and procyclical. monetary policy, and with this i would like to conclude, will remain a stable and reliable source of support throughout the crisis. our policy measures will continue to be geared towards ensuring that financial conditions remain consistent with a return of inflation towards our aim in the medium term, in line with our mandate. thank you. 1 schnabel, i. ( 2020 ), “ narratives about the ecb ’ s monetary policy – reality or fiction? ”, speech at the juristische studiengesellschaft, karlsruhe, 11 february. 2 for an overview, see rostagno, m. et al. ( 2019 ), “ a tale of two decades : the ecb ’ s monetary policy at 20 ”, working paper series, no 2346, ecb. 3 schnabel, i. ( 2020 ), “ the shadow of fiscal dominance : misconceptions, perceptions and perspectives ”, speech at the centre for european reform and the eurofi financial forum on “ is the current ecb monetary policy doing more harm than good and what are the alternatives? ”, berlin, 11 september. 3 / 4 bis central bankers'speeches 4 schnabel, i. ( 2020 ), “

the downward inflation pressures. we are convinced that the steps we have taken will bring inflation back to our 3 % target, in the medium term. we have managed to anchor the economic agents ’ expectations on inflation. this has enhanced the effectiveness of the monetary policy and contributed to maintaining confidence in the national currency and the albanian financial system. the continuous liquidity injection through transparent and time consistent operations has managed to relieve pressures in financial markets. the key interest rate cut was followed by an overall decline of interest rates in the financial market. bank lending costs, government borrowing costs, and business and consumer borrowing costs have dropped rapidly. all these factors have laid a sound foundation for economic and financial stability in albania. stability is a precondition for sustainable and long - term growth, financial system development, functioning market economy that generates growth, employment and welfare for the country. i take this opportunity to emphasise that this philosophy of prudence and bis central bankers ’ speeches stability will guide our decision - making in the future, as well. the businesses, consumers and financial system will find in the bank of albania an institution determined to maintain economic balances of the country, uphold the value of the national currency, encourage financial markets and support sustainable and long - term development for the country. however, the monetary policy has not been transmitted in full to the real sector of the economy. we are aware of the causes of this phenomenon, which is not an isolated case in albania, but a global - wide one. economic agents ’ uncertainties, economic and financial problems in the euro area, and problems with the balance sheets that characterise a part of the economy are objective obstacles to the monetary stimulus transmission to the economy. nevertheless, we are aware that within this reality, there is room for a more positive approach to consumption and investments, and more lending. uncertainties and reluctance are the main problems standing in the way of the albanian economy. the purpose of this forum is to identify, together, ways to overcome this situation. in this context, i would like to quote president roosevelt : the only thing we have to fear is fear itself. 2. decision - making on banking supervision and financial stability recently, non - performing loans have been mentioned frequently. i will take this opportunity to make the following necessary clarification : first, i would like to underline that we have identified this problem at an early stage and have been very scrupulous with the banking system to evidence every penny of a loan that is not being rep