, including macroeconomic projections produced both within and outside the eurosystem. within the stability - oriented monetary policy strategy, the exchange rate is an important variable for the eurosystem as it is one of the determinants of the outlook for price stability. if exchange rate developments pose a threat to price stability in the euro area, this threat will be taken into account together with the information on price developments revealed by all other indicators. the chosen strategy is forward - looking in nature and oriented to the medium term. it is sufficiently flexible to allow for appropriate responses to specific shocks. the monetary policy strategy eschews mechanistic reactions to any single indicator, including monetary aggregates or inflation forecasts. there have been some suggestions that the ecb should abandon its two - pillar strategy over time. i clearly do not share this view. i am convinced that our strategy has worked very well and will continue to be appropriate for the euro area. there is broad consensus that the uncertainties surrounding the start of stage three were unprecedented in european history and continue to require special attention. the eurosystem has a framework which truly reflects the complexity of the economy. it also allows account to be taken of the possibility of a regime shift at the start of stage three which could impact on the stability of important economic relationships. it would be impossible for the eurosystem to conduct a successful monetary policy by mechanistically following a simple rule whereby policy decisions are closely linked to a single indicator. the ecb has committed itself to be open, transparent and accountable. for this reason, the ecb provides the general public with detailed background information on its monetary policy and the governing council ’ s interest rate decisions. for example, immediately after the first governing council meeting each month, the introductory statement of the president is released. this practice is similar to the publication of minutes, and has the advantage of presenting the council ’ s assessment of the economic situation almost instantaneously after the meeting. each month the ecb publishes a bulletin providing additional background information to explain its current assessment of monetary, financial and other economic developments in more detail. once a year, the ecb releases an annual report on its activities to the european community institutions. as mentioned earlier, the governing council regularly carries out an independent assessment of the monetary, economic and financial conditions prevailing in the euro area as a whole. these deliberations of the governing council provide the basis for monetary policy decision - making at the euro area level. let me now

supporting annual m3 growth. the annual rate of change of loans to non - financial corporations ( adjusted for loan sales and securitisation ) was – 3. 1 % in march, unchanged from february. weak loan dynamics for nonfinancial corporations continue to reflect their lagged relationship with the business cycle, credit risk and the ongoing adjustment of financial and non - financial sector balance sheets. the annual growth rate of loans to households ( adjusted for loan sales and securitisation ) stood at 0. 4 % in march 2014, broadly unchanged since the beginning of 2013. the april 2014 bank lending survey confirmed the stabilisation of credit conditions for loans to enterprises and households. credit standards over the previous three months remained broadly unchanged for loans to enterprises but were eased in net terms for households. broadly in line with these results, in the survey on the access to finance of small and medium - sized enterprises ( smes ) for the period october 2013 - march 2014, smes reported that bank loan availability had become less negative and had actually improved in some euro area countries. according to both surveys, the general economic outlook contributed less negatively or even positively to these developments. at the same time, banks still reported tight levels of credit standards when seen in a historical perspective. since the summer of 2012, substantial progress has been made in improving the funding situation of banks. in order to ensure an adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential that the fragmentation of euro area credit markets declines further and that the resilience of banks is strengthened where needed. in this context, the ongoing comprehensive assessment of banks ’ balance sheets is of key importance. banks should take full advantage of this exercise to improve their capital and solvency position, thereby contributing to overcome any existing credit supply restriction that could hamper the recovery. to sum up, the economic analysis confirms our expectation of a prolonged period of low inflation followed by only a gradual upward movement in hicp inflation rates towards levels closer to 2 %. a cross - check with the signals from the monetary analysis confirms the picture of subdued underlying price pressures in the euro area over the medium term. regarding fiscal policies, according to the european commission ’ s spring forecast, the general government deficit in the euro area is expected to decline further, from 3. 0 % of gdp in 2013 to 2. 5 % this year and to 2. 3 % in 2015. the government debt - to - gdp ratio is expected to stabilise