differ substantially from those prevailing at the outbreak of the covid - 19 pandemic. the pandemic confronted us with a severe, albeit temporary, exogenous shock, which was probably the biggest supply and demand shock we had faced in decades. in that context, a coordinated fiscal and monetary policy response was absolutely necessary to support the incomes of both households and firms, and to minimise the potential structural damage to employment, productive capacity and economic growth caused by the crisis. the fiscal response had to rely on both national and supra - national policy actions of significant magnitude. in the current high inflation setting, however, the appropriate policy mix requires a tightening of the monetary policy stance and a fiscal stance that, at the aggregate, euro area level, is not at odds with this anti - inflationary stance. this means that government support measures should be temporary, targeted and tailored to preserving incentives to consume less energy. in particular, measures should be gradually rolled back as energy prices fall. otherwise, we are at risk of driving up medium - term inflationary pressures, which would call for a stronger monetary policy response. in this regard, let me stress that achieving a fiscal stance that is consistent with the smooth operation of the economic and monetary union ( emu ) while delivering sustainable public finances is precisely the role of the eu ’ s fiscal rules framework, or at least its key aspiration. why do we need fiscal rules? let me be straightforward in stating upfront that a disciplined fiscal framework that fosters the sustainability of public finances is essential to guaranteeing macroeconomic stability and the proper functioning of the emu. under the maastricht treaty, the design of the emu rested on two pillars : a single monetary policy authority and a set of coordinated national fiscal policies, which constituted the emu ’ s policy mix. the independent central bank ( ecb ) targeting price stability was entrusted with monetary policy. in turn, the stabilising arm of the autonomous national fiscal policies was tasked with addressing idiosyncratic shocks and cyclical slippages, while guaranteeing fiscal sustainability. however, the independent conduct of fiscal policy in a monetary union has inherent externalities that warrant some constraints. the emu was built on the basis of placing full responsibility for fiscal policy decision - making and implementation on the governments of the individual member states, without interfering with the conduct of monetary policy. in this sense, the independence of the central bank was reinforced by two means : i ) the prohibition

still some frictions affecting most notably lending to smes, which as you know are particularly vulnerable to crises such as that we have witnessed. bis central bankers ’ speeches under its remit, the banco de espana has recently adopted specific measures addressing this sector, such as the redefinition of sme for the purposes of prudential regulation or the early application of the supporting factor for capital requirements associated with sme loans. the banco de espana has also identified possible courses of action in other areas. a far - from - exhaustive list would include exploring ways of strengthening the role of the ico, simplifying the current public framework of financial support to smes and, in the longer term, designing mechanisms to capture homogeneous high - quality information on the most significant aspects of smes ’ business to make it easier for them to access bank credit. conclusion to conclude, the latest data on the euro area and on the spanish economy give us a glimpse of a horizon in which the serious difficulties besetting us have been overcome. but the firming of the recovery and the absorption of the burdensome legacy of the crisis will require perseverance in the strategy adopted to complete and strengthen the design of economic and monetary union and to lay sound foundations for sustained growth in all member countries. in the arena of national policies, there is a risk that a degree of reform fatigue may emerge as the situation improves. on the contrary, the favourable effects now becoming apparent from the fiscal consolidation and structural reform measures should encourage us to maintain these policies. thank you. bis central bankers ’ speeches