that said, policy can put us on a better growth path. according to simple, illustrative estimates, extra fiscal spending on productive investment of 1. 6 % of gdp [ 20 ] would reconnect the economy with its pre - crisis growth trend by 2022. and thanks to the recent improvement in the outlook, this figure is lower than was estimated in april ( chart 8 ). chart 8 euro area real gdp projections ( index : 2019 = 100 ) source : ecb. monetary - fiscal interactions in the pandemic and beyond achieving a sufficiently supportive fiscal stance is in the hands of governments. but the ecb can ensure that, for as long as inflation is below our aim, the financing conditions remain in place for the transmission of monetary policy to work via public and private spending. to do so successfully, we need to clearly understand what stage of the pandemic we are in. the economic outlook is improving, but we are not yet out of the pandemic phase. the shock caused by the pandemic was of an exceptional magnitude and has not yet been fully reabsorbed. monetary policy is still playing a critical role in anchoring the yield curve ( chart 9 ). experience shows that attempting to reduce the pace of asset purchases too early would lead to a tightening of financing conditions and a higher pace of purchases later. chart 9 estimated impact of the app and pepp on sovereign term premia ( basis points ) source : ecb calculations. notes : app stands for asset purchase programme and pepp stands for pandemic emergency purchase programme. impacts are derived on the basis of an arbitrage - free econometric term structure model with a quantity factor ( see eser, f. et al. ( 2019 ), “ tracing the impact of the ecb ’ s asset purchase programme on the yield curve ”, working paper series, no 2293, ecb, july ). the model results are for gdp - weighted averages of the zero - coupon yields of the big four sovereign issuers ( germany, france, italy and spain ). while impact elasticities may have been larger during the peak times of the pandemic, the same model ( estimated based on the app experience ) is used to quantify app and pepp impacts. results are subject to estimation and model uncertainty. once we move firmly into the recovery phase, we can start to reorient our policy away from offsetting the pandemic shock. but our focus

extensively or even exclusively entrusted with banking supervisory tasks. let me be a little more specific about the role and interests of the eurosystem. one could say that the eurosystem plays the role normally reserved for the central bank in countries where it does not have direct responsibility for supervision - such as the bank of england after the creation of the financial services authority. in this context, central banks still maintain a vital interest in a stable banking industry and closely monitor its developments and major systemic risks. this stems from the fact that the banking industry is the key channel for the transmission of monetary policy, the counterpart of monetary policy operations, and the main provider of payment services, which all relate to the basic central banking tasks. therefore, the eurosystem is keen to see its actions complemented by an effective conduct of the supervisory function by the competent supervisory authorities. central banks are keen to be sure that supervision is conducted in such a way as to ensure that banking problems do not jeopardise the conduct of monetary policy. this interest is clearly recognised by the treaty, which assigns to the eurosystem and the ecb some tasks relating to prudential supervision and financial stability. the eurosystem has the duty to “ contribute to the smooth conduct of policies pursued by competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system ”. given the separation between monetary and supervisory jurisdictions, this provision is clearly intended to ensure a smooth interplay between the two. in addition, the ecb must be consulted on any draft community and national legislation in the fields of banking supervision and financial stability, and the ecb can provide, on its own initiative, advice on the scope and implementation of the community legislation in these fields. central banks are normally involved in the process of drawing up legislation relating to, for example, regulatory standards, safety net arrangements and supervision, since this legislation contributes crucially to the attainment of financial stability. moreover, in the event of a financial crisis, the possible provision of emergency liquidity assistance, which is the responsibility of the competent national authorities, may have an effect on the common monetary policy, which is the direct competence of the eurosystem. to limit central bank interventions and the associated moral hazard problems, it is necessary for crisis prevention mechanisms to be in good shape. also for this reason, the eurosystem needs to be assured of effective banking supervision and crisis prevention. in general, the crucial issue is that the risk management systems