actively working to create the capacity to conduct an active monetary policy, something that the bnb has not done in the past quarter of a century. the necessary organisational structure will be operational by the end of june. we have created the necessary organisation to guide and control the entire preparation process. twice a month, the governing council examines four reports of the three deputy governors and the general secretary, respectively, on the progress achieved, potential problems and measures to overcome them. we are closely monitoring the commercial banks'preparations, which are also progressing according to plan, and reacting as necessary. 3 / 5 bis - central bankers'speeches with this incomplete list, i want to emphasise that the bnb and the banking sector will be fully ready within the current year for the introduction of the euro in our country. is this enough in purely technical, logistical terms? the answer is no. there are a number of, above all, information and accounting systems under the control of the executive and the municipalities, which must be adapted to work in the conditions of the eurozone. these have been identified, but considerable work is still required to be fully completed. in addition, there are four sets of conditions in the powers of the executive that must be met before joining the eurozone, including in relation to the non - banking financial sector, insolvency, state - owned enterprises and anti - money laundering measures. i highly appreciate the caretaker government's intention to continue work on these topics. what do we need to do to successfully finalise the joining process? above all else, we need a clearly established, sustainable, pro - european political structure. this is something that has been missing since we joined the european exchange rate mechanism and the banking union. in the earlier stage of the political crisis, the executive showed a hesitant position regarding the eurozone. for example, it took nearly a year for the government to adopt the plan drawn up and approved by the coordination council for the introduction of the euro, with six ministers voting against and one abstaining, including ministers key to the process. in contrast to the earlier period, the last government stood on a clearly proeuropean platform, but as the development of events has shown, it turned out to be extremely unsustainable. i also leave without comment the fact that since our admission to the banking union and the exchange rate mechanism, we have had five different ministers of finance. in establishing a sustainable pro - european political structure, we are expected

subsequently at a relatively quick pace, the planned tltros were let to run their course. while credit drawn by banks under this facility will be outstanding for the next three to four years, the facility itself is not an active instrument today. as a consequence, while all the instruments – including indeed the credit extended to banks under the previous tltros – interact to determine the stance prevailing today, the main source of easing at present comes from the interaction between the app, the moderately negative shortterm interest rate and the forward guidance on both these policy tools. our forward guidance clarifies the relationship between our two main instruments. it sets the conditionality that governs them and the sequencing of their phasing out. it also provides information about their expected life. with the last dfr reduction in march 2016, the app became the margin along which the governing council can still ease policy to a meaningful degree if needed. keeping policy rates at their present level for the entire life of the app is an enabling condition for the purchases to exert their full impact. this is why we have coordinated the guidance about our key interest rates and our asset purchases very carefully and, since march 2016, we have consistently communicated that our key policy rates are expected “ to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. ” the appropriate calibration of this set of instruments is of course always a highly complex exercise and requires a broad range of analytical inputs and policy judgement. it works backward : from a desired medium term inflation outlook – one which is most consistent with the objective and with its numerical clarification that the governing council announced in may 2003 – to the broad financing conditions that can support that outlook, to the calibration of the governing council ’ s instruments that can foster those financing conditions. concretely, these exercises start from the governing council ’ s assessment of the prospects for inflation to return to levels that are close to 2 % by a meaningful time frame and with a reasonable degree of confidence. if the prospects for achieving that desired outcome are too weak, the governing council will form a view on the degree of accommodation that is necessary to make that outcome less uncertain. working backwards, this exercise is designed to promote the level and shape of the yield curve that, according to past regularities, can be expected to deliver the requisite amount of stimulus, taking into account the endogenous adjustment of the whole spectrum of market conditions – including