which will also create room for further tax cuts and absorb the fiscal costs of population ageing. this reform agenda, as well as the urgent structural reforms relating to product, labour and financial markets, will be addressed in the forthcoming broad economic policy guidelines. overall, such reforms reflect the key challenge for the euro area to expand its potential for non - inflationary growth and to reduce its high level of unemployment. the governing council calls upon member states to make faster progress in accelerating and deepening structural reforms in order to provide economic agents with the proper incentives to enhance efficiency and entrepreneurship and to progress towards a knowledge - based economy as proclaimed in the lisbon agenda and confirmed in barcelona. we are now at your disposal for questions.

european central bank : press conference - introductory statement introductory statement by mr willem f duisenberg, president of the european central bank and mr lucas papademos, vice - president of the european central bank, frankfurt, 6 june 2002. * * * ladies and gentlemen, mr. papademos, the new vice - president of the ecb, and i will now report on the outcome of today ’ s meeting of the governing council of the ecb. the governing council undertook a comprehensive examination of monetary, financial and economic developments and considered the evidence that has become available since its last meeting on 2 may 2002. notwithstanding the recent decline in inflation, the outlook for price stability in the medium term remains less satisfactory than expected a few months ago. however, the economic outlook is still subject to uncertainty. further evidence is needed before we can fully assess the upward risks to price stability over the medium term. against this background, the governing council decided to leave the key ecb interest rates unchanged. starting with the analysis under the first pillar of our monetary policy strategy, the three - month average of the annual growth rates of m3 decreased to 7. 4 % in the period from february to april 2002, down from 7. 6 % in the period from january to march 2002. while the high annual growth rate of m3 still partly reflects the portfolio shifts to liquid positions which occurred last autumn, and there was some normalisation in the development of m3 in early 2002, this trend towards moderation has recently been interrupted. in addition, annual rates of growth of loans to the private sector have stabilised over recent months. as regards the second pillar, our expectations for a gradual recovery in real gdp growth in the euro area have been confirmed by eurostat ’ s recently published first estimates for real gdp growth. these preliminary estimates show an improvement of quarter - on - quarter growth rates from – 0. 3 % in the last quarter of 2001 to moderately positive rates in the first quarter of this year. moreover, business and consumer confidence has strengthened again more recently, as reflected in the data published by the commission. looking ahead, available forecasts all point to a continued strengthening in both domestic and foreign demand, relating to a more favourable external environment, sound domestic fundamentals and the absence of major imbalances within the euro area. overall, they suggest that real gdp growth in the euro area should again be in line with potential growth later this year, with a further increase expected in 2003. despite this rather positive outlook,