2 % in real gdp growth, on a quarterly basis, according to eurostat's first estimate. available survey data and the monthly indicators for october and november suggest that economic activity has weakened further during the fourth quarter of 2008. looking further ahead, on the basis of our current analysis and assessment, we see global economic weakness and very sluggish domestic demand persisting in the next few quarters. according to the december 2008 eurosystem staff macroeconomic projections for the euro area, a subsequent recovery should then gradually take place, supported by the fall in commodity prices and assuming that the external environment improves and the financial tensions weaken. eurosystem staff project annual real gdp growth of between 0. 8 % and 1. 2 % for 2008, between - 1. 0 % and 0. 0 % for 2009, and between 0. 5 % and 1. 5 % for 2010. these figures represent substantial downward revisions relative to the previous ecb staff projections for 2008 and 2009 published in september. forecasts by international organisations have also been revised downwards and are broadly in line with the december 2008 eurosystem staff projections. in the view of the governing council, the economic outlook remains surrounded by an exceptionally high degree of uncertainty. risks to economic growth lie on the downside. they relate mainly to the potential for a more significant impact on the real economy of the turmoil in financial markets, as well as concerns about protectionist pressures and possible disorderly developments owing to global imbalances. it is crucial that all parties concerned make their contribution to lay sound foundations for a sustainable recovery. for this to materialise as early as possible, it is of the utmost importance to maintain discipline and a medium - term perspective in macroeconomic policymaking. this is the best way to support confidence. the significant measures announced by governments to deal with the financial turmoil should be implemented swiftly so as to help ensure trust in the financial system and to prevent constraints on credit supply to companies and households. with regard to price developments, annual hicp inflation has declined substantially since july. according to eurostat's flash estimate, hicp inflation was 2. 1 % in november, after 3. 2 % in october and 4. 0 % in july. the significant decline in headline inflation since the summer mainly reflects the considerable easing in global commodity prices over the past few months, which more than offsets the impact of the sharp rise in unit labour costs in the first half of this year. looking forward, lower commodity prices and weakening

allow for the necessary flexibility. automatic fiscal stabilisers are relatively large in the euro area and provide a powerful source of fiscal support to a weakening economy. where room for manoeuvre exists, additional budgetary measures could be effective if they are timely, targeted and temporary. turning to structural policies, the ongoing period of weak economic activity and high uncertainty about the economic outlook imply the need to strengthen the resilience and flexibility of the euro area economy. product market reforms should foster competition and speed up effective restructuring. labour market reforms should help to facilitate appropriate wage - setting, as well as labour mobility across sectors and regions. the current situation should therefore be seen as a catalyst to foster the implementation of necessary domestic reforms in line with the principle of an open market economy with free competition. we are now at your disposal for questions.