. at the same time, it needs to be asked whether a more even balance between monetary and fiscal policy stances would be desirable in order to sustain the growth momentum in the current conjuncture. in our view it should be underlined that, in order to reap the full benefits from the ecb ’ s monetary policy measures, other policy areas must contribute more decisively to raise the growth potential and reduce vulnerabilities. for the longer term, implementation of structural reforms is key to boost euro area productivity and growth potential. regarding fiscal policies, the mildly expansionary euro area fiscal stance today and the operation of automatic stabilisers are already providing support to economic activity. if the slowdown is judged more stubborn, any further fiscal easing should be undertaken within the limits of debt sustainability and be differentiated according to fiscal space available. in other words, while countries with elevated public debt levels should focus on consistent consolidation of public finances, those with available fiscal space could use it to increase growth - enhancing public investment. in this way, one would enable a more balanced macroeconomic policy mix. applying the already worn saying, monetary policy should indeed not be the only active player in town. finally, a word on the longer - term. the ecb – much like other central banks – must operate in an environment where long run trends, such as population aging, lower long term interest rates, climate change and concerns about inequality, can have important societal effects. the central banking community needs to understand the implications of these phenomena to growth, employment and inflation dynamics, in order to deliver more effectively what is in their mandate. that ’ s why we need to systematically assess how these transformations affect monetary policy strategy. many thanks for your attention, and i am ready to take your questions. 2 / 2 bis central bankers'speeches

, was created. anneli was strongly involved in this major policy transformation – in its design and in its practice. her insightfulness and wide experience, coupled with her robust professional stature, have equipped her excellently for roles in many key international regulatory bodies, such as the supervisory board of the ecb ’ s banking supervision, the european banking authority ( eba ), european securities and markets authority ( esma ) and many others. anneli has actively fostered nordic - baltic regulatory and supervisory cooperation, which is, of course, critical in the highly interconnected nordic - baltic financial system. in my remarks today, i would like to take the opportunity to offer you some reflections on the post - crisis lessons learnt and evolution achieved in european monetary and macroprudential policies. in particular, i shall focus on the economic and monetary policy outlook, the connections between the financial system and the real economy, and the challenges that we have in safeguarding financial stability. * * * let me begin with the economic outlook. although the covid - 19 pandemic is still raging in some parts of the world and disrupting economic activity, particularly in china, we are in the middle of another crisis. russia ’ s brutal, illegal war in ukraine has profoundly transformed the european security order and the economic policy landscape. before the war broke out, the euro area economy had recovered better than expected from the pandemic. now, russia's invasion is weakening growth prospects in the euro area. however, we should keep this in perspective and bear in mind that russia's share of the world economy was less than 2 % before the outbreak of the war. in march, the european central bank forecast in its adverse and severe scenarios that the euro area economy will grow by more than 2 % this year, which is much less than the baseline of 3. 7 %. as things stand, i am afraid that the ecb's june forecast is likely to be closer to the adverse and severe scenarios than the baseline, especially due to continuously high energy prices and the prolonged supply chain bottlenecks. the inflation outlook in the euro area is ever more challenging, as we have seen in recent months. currently, the driver is energy inflation, while the anchor is – or has been – the low level of wage inflation, in line with productivity growth and our inflation target. increased energy and commodity prices have pushed up euro area consumer price inflation to 7. 5 %. at present, the rise in energy