to pursue fiscal activism. it remains essential that both the commitments made in the stability programmes and the requests to further improve fiscal positions, as subsequently agreed in the ecofin council, are implemented in full. this will help to build confidence in the fiscal framework and anchor expectations about the future macroeconomic environment. in a highly uncertain environment, it is all the more essential that governments help to boost investor and consumer confidence by taking decisive action to implement structural reforms in labour and product markets and in public finance. on the one hand, there appears to be a broad consensus among policymakers and the public that such reforms are important to ultimately raise the euro area ’ s production potential, improve the flexibility of the economy and make the euro area more resilient to external shocks. on the other hand, notwithstanding some progress in individual countries, the effective pace of reform has so far remained slow and clearly insufficient to meet the lisbon objectives. over the past few years this has given rise to an implementation gap. efforts to overcome structural inefficiencies in the functioning of markets must be stepped up. this would promote confidence in the medium - term production capacity of the euro area and therefore counteract to some extent the current high degree of uncertainty. 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, at the press conference held in rome, 3 april 2003. * * * ladies and gentlemen, the governing council of the european central bank today met for the seventh time outside frankfurt. let me therefore thank both governor fazio for his invitation and generous hospitality, and the staff of the banca d ’ italia for an excellently organised meeting. at our meeting today, which took place in the exceptional circumstances associated with the conflict in iraq, we comprehensively reviewed monetary, financial and economic developments. we discussed at some length the potential economic implications of the military operations. in the governing council ’ s view, it is not possible at this juncture to assess what effect they will have on the global economy, and on economic developments and the medium - term outlook for price stability in the euro area. overall, the basic elements of our assessment of 6 march on the outlook for price stability remain in place and accordingly we decided to keep interest rates unchanged. we also noted that the outbreak of the war has not affected the functioning of the financial system. as indicated in our press release of 20 march, the governing council will act to ensure the proper functioning of financial markets, providing sufficient liquidity in the euro area as needed. let me now explain our assessment of economic developments in more detail. as regards the analysis under the first pillar of our monetary policy strategy, the three - month average of the annual growth rate of m3 was 7. 4 % in the period from december 2002 to february 2003, up from 7. 0 % in the period from november 2002 to january 2003. given the continued high volatility in financial markets, mainly related to the geopolitical uncertainty, m3 growth continued to be fostered by portfolio shifts away from more risky assets. however, m3 growth appears also to have been affected by the low level of short - term interest rates prevailing in the euro area, as indicated by the strong growth in its most liquid components. at the same time, credit growth showed signs of stabilisation in early 2003, after the moderation observed throughout last year. turning to the analysis under the second pillar, recent data and surveys continue to confirm that real gdp growth in the euro area remained weak in early 2003. in particular, the persistence of geopolitical tensions continued to negatively affect sentiment and damp