, which are dominated by various investments goods. investments have remained weak in developed economies for the past 5 years. the problems in the electronics industry have been related to one large company, nokia, which lost its technological advantage in mobile phones. paper industry, in turn, suffers from the longer - term decline in demand for printing paper in europe. another major factor behind the decline in exports is the weakening of cost competitiveness. wages and unit labour costs have increased about 10 % since 1999 compared to the average of all trading partners and compared to euro area. bis central bankers ’ speeches how did cost competitiveness end up weakening so much? one part is misjudgment and bad luck regarding timing. just before the global financial crises escalated, a round of union - level wage agreements took place. amid rapid growth and with seemingly benign outlook, generous wage increases were agreed upon, and the contracts mostly extended for about two years. then the financial crisis struck, leading to slowdown in wages in many countries while finnish wages diverged. why was no correction made after the contracts had expired? the reason probably has a lot to do with the relatively muted increase in unemployment in finland. employment has been supported by growth in domestic demand, especially household consumption. domestic demand has also been supported by loose fiscal policies and low ecb interest rates. the low interest rates were transmitted to loan costs of the public by the strong and stable banking system and the system of variable - rate in most loans. the growth in domestic demand in recent years has been financed to an increasing extent by debt, as households and the public sector have run financial deficits. this has been possible due to the strengths of the economy. household and public sector indebtedness remained relatively low in finland in the years before the global financial crisis. however, the recent increases in debt gradually add to the vulnerabilities in the economy. competitiveness issues how much has finnish cost competitiveness weakened? i already mentioned the increases in wages and unit labour costs for the whole economy. developments in the open sector of the economy are obviously very significant as manufactured goods account for much of foreign trade. hence its cost competitiveness is important for the whole economy. manufacturing unit labour costs in finland are currently at about the same level as in 1999. however, manufacturing ulcs provide far too rosy a picture of cost competitiveness for finnish manufacturing. this misperception arises because of price developments. the price component of value added declined considerably in finnish manufacturing since 1999

at least for another year. second, we confirmed the ongoing full reinvestment of the principal payments from the maturing securities purchased under the asset purchase programme for an extended period of time past the date when we start raising the key ecb interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. finally, we determined the modalities of the new series of quarterly targeted longer - term refinancing operations ( tltro iii ), which were announced in march. tltro iii operations will start in september 2019 and end in march 2021, each with a maturity of two years. we decided that the interest rate in each operation will be set at a level that is 10 basis points above the average rate applied in the eurosystem ’ s main refinancing operations over the life of the respective tltro. for banks whose eligible net lending exceeds a benchmark, the rate applied in tltro iii will be lower, and can be as low as the average interest rate on the deposit facility prevailing over the life of the operation plus 10 basis points. the schedule defining the borrowing costs under tltro iii is marginally less generous than that applied under the outstanding tltro ii, in line with our intent of not discouraging banks that can afford to fund themselves in the market on attractive terms from doing so at tltro ii maturity. at the same time, the pricing schedule incorporates features that can greatly enhance our accommodative monetary policy stance, as banks with strong lending performance will retain the opportunity to borrow at negative interest rates. the pricing remains sufficiently generous – especially when compared with alternative sources of funding – for banks to keep credit flowing to firms and households on a scale that can continue to support the economy and inflation. all in all, this set of decisions will provide the monetary accommodation necessary for inflation to remain on a sustained path towards levels that are below, but close to, 2 % over the medium term, while also preserving favourable bank lending conditions and supporting a smooth 2 / 3 bis central bankers'speeches transmission of our monetary policy. this being said, the governing council remains ready to act in case of adverse contingencies and to use its instruments – as appropriate – to ensure price stability. a reliable strategy is an anchor for credible monetary policy. erratic policy debates for the purpose of creating short - term stimulus risk undermining that credibility in the long run.