success for monetary policy, which contributed to our decision yesterday to lower interest rates by 25 basis points. however, as the future inflation outlook remains uncertain, we cannot pre - commit to a particular rate path. bond spreads reflect fundamental factors and risk appetite the sharp increase in the ecb ’ s interest rates did not trigger a sustained rise in sovereign bond spreads between member states ( slide 6, left - hand side ). some observers have interpreted this as a sign of fiscal dominance. they claim that the ecb may be keeping risk premia artificially low by investing in sovereign bonds of selected highly indebted countries, thus undermining fiscal discipline. in the medium term, so the argument goes, this could lead to fiscal dominance and higher inflation. yet, it needs to be borne in mind that when interest rates started rising, sovereign bond yields rose significantly for all member states ( slide 6, right - hand side ). today, average yields on ten - year sovereign bonds in the euro area are around three percentage points higher than just before the pandemic. this significant increase provides a clear incentive for all member states to reduce their debt levels. the yield increases were largely due to rising interest rate expectations and term premia, while credit risk premia – measured here by credit default swaps – remained remarkably stable or even fell slightly ( slide 7, left - hand side ). there are various factors that can help explain recent developments in credit risk premia. the most important one is the comparably benign economic development of more highly indebted countries. while economic growth is particularly depressed in the “ safe haven ” of germany, the countries that were in crisis before have fared much better since ( slide 7, right - hand side ). higher long - term growth, in turn, supports debt sustainability. ultimately, the level of risk premia is dependent on the differential between interest rates and growth ( r - g ). the positive economic development in parts of the euro area is, first and foremost, the result of years of effort invested into strengthening resilience and economic dynamism after the sovereign debt crisis. the european fiscal measures in response to the pandemic – in particular the next generation eu ( ngeu ) programme – are likely to have played an important role as well. first, countries with higher debt levels benefit from ngeu funds to a larger extent, which should support euro area convergence in the long run by increasing potential growth in these countries. second, ng

will be in your decision - making. we don ’ t want to control every small bank directly ; we will work together with national supervisors. sz : according to the plans, the ecb will have to report on its supervision business to the european parliament once a year. is that enough? draghi : we surely need substantial democratic accountability here, and it is up to the legislators to establish what they consider necessary. sz : do you personally know people who have suffered from the euro crisis? draghi : i have visited many smes whose credit was cut in the crisis and who have gone out of business. and i am not talking about only italian businesses. bis central bankers ’ speeches sz : how uncomfortable do you feel in the country of the bundesbank? draghi : i have often said that the bundesbank is a great institution, and i respect it very much. it would be great if we could always work together. we have done that many times, but at the moment, we have different opinions on the best way to react to the crisis. we all share the same objective of delivering on price stability, but we are not in full agreement about the best way to achieve that. sz : and the german people? draghi : we need to explain what we do better in germany, which our intentions are and what precautions we are taking. sz : you could speak to the bundestag. draghi : it would be an opportunity to explain what we do in greater detail. if i am invited, i would be very happy to go there. bis central bankers ’ speeches