order to deal with this uncertain environment. just focusing on one or a few forecast numbers would make it difficult for policy - makers to transmit the complexity of monetary policy deliberations to the public in a precise and transparent manner. to this end, the ecb decided from the outset to single out money from the set of selected key indicators that it would monitor and study closely. to mark the fact that, in the medium and long run, inflation is indeed a monetary phenomenon, the governing council announced a reference value for the growth of a broad monetary aggregate which is compatible with sustainable, non - inflationary economic growth. these decisions were made in recognition of the fact that monetary growth and inflation are closely related in the medium to long run. indeed, assigning money an important role underpins the medium and long - term orientation of the strategy. it helps policy - makers to see beyond the transient impact of the various shocks affecting the economy and to implement an adequate gradual course for the conduct of monetary policy. a central bank simply cannot ignore the fact that, ultimately, inflation is always a monetary phenomenon. to sum up, the ecb ’ s framework strives to convey to the public the full complexity surrounding the monetary policy process. it aims to provide an honest account of all the relevant factors considered in monetary policy deliberations, forestalling any mechanistic description of monetary policy. using a single framework for both external communication and internal analysis guarantees consistency. as already mentioned, empirical studies show that the ecb has been, in the eyes of the market, at least as predictable in its monetary policy decisions as most other central banks in the industrialised world, if not even more so. the emphasis on the robustness of the framework favours its stability over time. all this facilitates the public ’ s understanding of how monetary policy is conducted, fostering the process of transmission of monetary policy decisions to the economy and ultimately facilitating the achievement of price stability. let me conclude. it may be useful to describe emu as a long - distance race, with several rounds. so far, a number of rounds have already been completed, always successfully, leaving us with valuable assets, notably the high level of credibility of the ecb for attaining price stability, and highly and increasingly integrated financial markets in which long term rates of bonds have converged not to the average of the pre - stage three figures but to the best previous benchmarks. yet we are not complacent. ahead lie further rounds :

conditions in the euro area are very favourable, supporting the ongoing gradual economic recovery in the euro area. i should note that this scenario of an ongoing and further progressing economic recovery is subject to some risks - in both directions. on the upside, euro area economic growth in the first quarter of this year was stronger than anticipated and this momentum may strengthen shorter - term dynamics. ongoing robust growth in the global economy could also lead to stronger than expected activity in the euro area. on the downside, although oil prices have declined somewhat recently, they remain at high levels and may dampen growth, mainly through their impact on the euro area ’ s terms of trade. considering longer horizons, concerns also remain with regard to the persistence of global imbalances. turning to price developments, when assessing risks to price stability at the current juncture it is essential to distinguish between short - term developments and the medium - term trend. over the short term, oil prices continue to exert upward pressure on the general price level. according to eurostat ’ s flash estimate, annual hicp inflation was 2. 4 % in june, following 2. 5 % in may. although oil prices have fallen over the last few weeks, markets expect them to remain high for some time to come. if this were to occur, inflation rates would most likely remain above 2 % for longer than was expected this year and, possibly, in the first half of next year. looking beyond the short term, however, the main scenario for medium - term inflation remains consistent with price stability. this scenario is based on the assumption that wages will continue to develop moderately at a time when unemployment is still high. however, there are some upside risks to this scenario. the strength of global economic growth may continue to exert upward pressure on commodity prices, including oil prices. moreover, on the domestic side, indirect taxes and administered prices have been subject to rather strong increases in the recent past and their future evolution is uncertain at this point in time, since such information usually becomes available only later in the year. in addition, measures of long - term inflation expectations derived from financial market indicators remain relatively high. while such measures always need to be interpreted with caution, their development calls for particular vigilance. against this background, the potential risk of second - round effects via wage and pricing behaviour needs to be monitored closely. in this respect, i should stress again the important contribution that social partners can make to facilitating the maintenance of price stability by focusing on the