restraint is looking more stubborn than our bundesbank experts were expecting when we published our forecast for germany in june. for all this, though, it is still true to say that sharply rising wages, easing inflation and robust labour market developments are opening up more and more scope for spending. households could leverage that scope to gradually step up their consumption. looking ahead to next year, the economic research institutes are expecting to see tentative economic growth of between ½ and 1 %. the bundesbank will be publishing its new forecast for germany in december. ladies and gentlemen, one point i have stressed on multiple occasions in the past is that we should not talk our country down as a business location. that is not to say, of course, that we should not pinpoint weaknesses and resolutely tackle problems. an overly pessimistic mindset can be damaging. but what can also be damaging is viewing a situation through rose - tinted spectacles or blindly trusting that everything will somehow fix itself of its own accord. there is no doubt that germany is not seeing as much investment as we would like. and industry is struggling with a difficult competitive environment. barriers need to be dismantled here. at this point, allow me to make a passing remark in light of recent events : if businesses are to get to grips with – and finance – their future challenges, we will need banks that are strong and robust. in any possible mergers, what matters is that the institution that comes about as a result is one that fits that bill in the best possible way. as far as the topic of barriers is concerned, i do not wish to go beyond my allotted time. allow me, then, to run through just some of the initiatives that could boost the attractiveness of a business location : cutting as much red tape as possible, and speeding up administrative procedures like approval processes. as for greening the economy, policymakers should ensure greater planning security. digital infrastructure and education, in particular, are in need of improvement. in addition, politicians should act to boost the labour supply because staff shortages are bound to worsen further as demographic change makes itself felt. headlines claiming that germany is a millstone around the neck of the euro area1 make for unpleasant reading. but the simple fact is that when the largest member state's economy is weak, the average across the bloc will be depressed as a result. the euro area economy as a whole has gained some traction in the first two quarters of this year ( recording quarter -

as the disinflation process plays out, inflation expectations have also receded the way we want them to, and the risk of higher inflation expectations has diminished in the view of markets and surveyed experts. this would suggest that inflation expectations are well anchored. it is now up to us on the ecb governing council to prove our staying power. if we achieve that, we will soon make it over the finishing line. 4 monetary policy the third question i asked at the beginning has basically been answered : the phase of steep tightening was followed by nine months of unchanged key interest rates, after which the ecb governing council subsequently loosened the reins somewhat in june and now again in september. we don't know yet how things will unfold, but it is certain that key interest rates will not go back down as quickly and sharply as they went up! the intervals between the potential moves may vary depending on the incoming data, as monetary policy must remain tight enough for long enough to ensure that the inflation rate returns to the 2 % target over the medium term. assumptions to that effect about key interest rates also form the basis for the ecb's projections. ladies and gentlemen, public opinions on the best time for an interest rate move vary. this is due, not least, to the fact that the risks cannot be clearly quantified and that monetary policy time lags are impossible to measure with certainty. it is important for me to see inflation stable at the 2 % target as soon as possible. to get there, we will not pre - commit to any path in our decisions going forward. instead, we will continue to examine incoming data with an open mind. we are not flying on autopilot when it comes to interest rate policy. 4. 1 reducing the balance sheet i will now turn to the three topics specific to monetary policy. the key interest rates are the central lever with which to adjust the monetary policy stance. in addition, gradual balance sheet reduction also influences the direction of monetary policy. this is because the length of the balance sheet is ultimately driven by previous accommodative non - standard measures. banks'repayment of loans under the longer - term refinancing operations has thus far been the primary contributory factor towards reducing the eurosystem's total assets. remaining outstanding funds borrowed under targeted longer - term refinancing 4 / 7 bis - central bankers'speeches operations ( tltros ) are now only relatively small ( around €76 billion