scenario. it ’ s a bit like here in the united states, where there ’ s this two - track us economy, and in part that depends on the policy response. so we had a discussion that there are levers, most obviously fiscal policy, which mostly will operate through the services sector in europe. so i don ’ t think it ’ s a case of saying that this would be unfiltered in its impact on the euro area. no doubt, it would be a negative, actually it ’ s a negative. but when you calculate how much of even a big slowdown in manufacturing passes through to overall gdp, we have to keep that in proportion. audience member : first, congratulations on an interesting and smart tiering system. i think i agree with you it ’ s about giving enough balance in excess reserves and excess liquidity. i wanted to come back on the percentage caps for the buying of the programme. you know, there was some confusion also after the meeting because if we think about the 33 % cap, is it legally possible for the ecb to buy more than 33 %, because if not germany is already at 31 %, they ’ ll get to 33 % in about nine months, so that would mean the qe is pretty much over after nine months instead of the 2023 cap that people had in mind. and the second question is : do you have an estimate for the lower bound for the interest rates and how much you can cut, or is it just to push germany and the netherlands and others to act fiscally because the 10 basis points is not doing much and has unintended consequences. so, on the second question where the ultimate lower bound might be. we watch with interest what the market believes. and the market clearly believes it ’ s far below where we are now. so the pricing in the market has been where they, depending on the time period, have entertained considerations of interest rates of – 75, – 80 and so on. and looking at other countries – where rates have gone down to that neighbourhood – my bet is that market participants are just looking to see what ’ s proven to be sustainable elsewhere. i mean, the big economic question is : really at what level … so there ’ s always been historically a kind of technical issue which is at what level will depositors decide they ’ d rather not hold deposits and they ’ ll hold their savings elsewhere. so that kind of provides a cash lower bound on the interest rate.

expected from their central bank, that achieving it is taken for granted. even our regular exchanges of views have sometimes dealt less with the “ m ” than with the “ e ” of emu! 2 ) economic and monetary developments achieving price stability through alertness and fierce independence sets the framework for our day - to - day actions. in this context, let me report on recent economic and monetary developments. note that as we have entered the purdah - period, nothing i say has any bearing on upcoming monetary policy decisions. we expect real gdp growth in the euro area to be very moderate in the second half of this year. growth is dampened by a slowing pace of global growth, by declines in equity prices and business confidence, and by continuing tensions in segments of financial markets as well as in some sovereign debt markets. the more moderate economic outlook is confirmed in the ecb ’ s september projections. the risks to the economic outlook, which previously were balanced, are now on the downside, mainly relating to tensions in some financial markets. turning to prices, inflation was 2. 5 % in august, and rose to 3 % in september according to the eurostat flash estimate, almost exclusively as a result of oil price developments. we expect inflation to stay above 2 % over the coming months. next year, it should fall below that level, depending on commodity price and wage developments. this pattern is also reflected in the latest ecb projections of inflation ranging between 1. 2 % and 2. 2 % next year. the risks to the medium - term outlook for inflation were broadly balanced in the eyes of the governing council in its last meeting, whereas before they were seen as being on the upside. our monetary analysis indicates that the underlying pace of monetary expansion remains moderate. liquidity accumulated prior to the period of financial market tensions continues to be ample but recent data indicate that part of it may be held more for precautionary reasons than for spending. finally, in the context of our continuing analysis of the euro area economy, let me draw your attention to today ’ s release of the 2011 structural issues report. this deals with structural features of distributive wholesale and retail trade and their impact on prices in the euro area. the distributive trade sectors are not only economically important in their own right, but also relevant to monetary policy. ultimately, it is retailers who set the prices of most consumer goods and they are a key interface between producers and consumers. i very