with negative interest rates continues to be positive as the benefits continue to outweigh the costs. 1 in this regard, our two - tier system for reserve remuneration has been acting as an effective mitigation tool for the banking sector. banks can deposit part of their excess liquidity at a preferential rate, thereby limiting their direct costs and preserving their role in transmitting the accommodative stance of monetary policy to the economy. the strategy review finally, let me now turn to our ongoing strategy review. i have actually just returned from a twoday governing council retreat dedicated to that topic. as you know, we embarked on this journey in january 2020, shortly after i took office. following a pause induced by the pandemic, the process was resumed last autumn and has since been progressing vigorously. the review is designed to cover all relevant aspects of our monetary policy, in line with our promise not to leave any stone unturned. 2 the governing council ’ s deliberations so far have been supported by a tremendous effort by many staff members of the ecb and national central banks, in a genuinely european effort. this collaboration has been organised into 13 workstreams. we also gathered essential input for the review by holding many outreach events and collecting views from a wide range of stakeholders. we listened to expert audiences like academics and analysts, to politicians, civil society organisations and individual citizens. i greatly appreciate the insightful contributions from the european parliament throughout the process. we have listened carefully to the concerns you raised during the hearings, the plenary debates, the ad hoc visits to the ecb, and in your resolution on our annual report. since all the issues covered in the seminars are highly interdependent, the remaining discussions will focus on deriving their joint implications for the monetary policy strategy. we made good progress during the retreat, and we will make the outcome of the strategy review public after taking formal decisions. let me reassure you that this parliament will continue to play a privileged role in the follow - up phase. this committee represents a unique forum for presenting the outcome of the review to all european citizens and i am looking forward to the constructive debate which will follow. conclusion madam chair, honourable members, as the recovery is gathering pace, we need to remain vigilant and ensure that policy support continues to provide a bridge over the pandemic and well into the recovery. the common european approach adopted during this crisis is a great achievement and should be strengthened further.

christine lagarde : hearing of the committee on economic and monetary affairs of the european parliament introductory statement by ms christine lagarde, president of the european central bank, at the hearing of the committee on economic and monetary affairs of the european parliament ( by videoconference ), frankfurt am main, 21 june 2021. * * * dear chair, honourable members of the economic and monetary affairs committee, ladies and gentlemen, i am very happy to appear before this committee again today. while we are still meeting in a virtual setting, the health situation and economic prospects across europe have improved on the back of significant progress in vaccinations − with more than 100 million people in the european union now fully vaccinated. this makes me hopeful that we will meet again in person in brussels in the near future. in my remarks today i will first discuss the economic outlook for the euro area before turning to the ecb ’ s monetary policy, including the recent decisions taken by the governing council. finally, as per your explicit request, i will update you on our ongoing strategy review. the current macroeconomic and inflation outlook the outlook for the economy is indeed brightening as the pandemic situation improves, the vaccination campaigns progress, and confidence begins to rise. we expect economic activity to accelerate as of this quarter amid support from fiscal and monetary stimulus and a vigorous bounce - back of services activity in particular, which has been hardest hit by the pandemic and associated containment measures. manufacturing production remains robust, although supply shortages, mainly related to difficulties in procuring materials and equipment, could generate some headwinds for industrial activity in the near term. soft data also signal strong momentum in global activity, led by the rebound in advanced economies where vaccination rates have picked up. additional fiscal support, most notably the us fiscal stimulus package, is also supporting the recovery. these developments boost foreign demand and so have positive spill - over effects on the euro area. looking ahead, we expect economic activity to improve strongly in the second half of 2021, supported by a robust rebound in consumer spending and solid business investment. our latest staff projections currently foresee annual real gdp growth at 4. 6 per cent in 2021, 4. 7 per cent in 2022 and 2. 1 per cent in 2023. the risks surrounding the growth outlook have become broadly balanced. while on the downside, the spread of virus mutations continues to be a source of risk, on the upside, brighter prospects for global