may improve more than expected, and both the global economy and foreign trade may recover more strongly than projected. furthermore, there may be stronger than anticipated effects stemming from the extensive macroeconomic stimulus being provided and from other policy measures taken. on the downside, concerns remain relating to a stronger or more protracted than expected negative feedback loop between the real economy and the financial sector, renewed increases in oil and other commodity prices, the intensification of protectionist pressures and the possibility of a disorderly correction of global imbalances. with regard to price developments, euro area annual hicp inflation increased further in january 2010 to stand at 1. 0 %, according to eurostat ’ s flash estimate, after 0. 9 % in december 2009. inflation is expected to be around 1 % in the near term and to remain moderate over the policy - relevant horizon. in line with a slow recovery in demand in the euro area and elsewhere, overall price, cost and wage developments are expected to stay subdued. in this context, it is important to emphasise that inflation expectations over the medium to longer term remain firmly anchored in line with the governing council ’ s aim of keeping inflation rates below, but close to, 2 % over the medium term. risks to this outlook remain broadly balanced. they relate, in particular, to the further development of economic activity and the evolution of commodity prices. furthermore, increases in indirect taxation and administered prices may be stronger than currently expected, owing to the need for fiscal consolidation in the coming years. turning to the monetary analysis, the annual growth rate of m3 remained negative in december 2009, standing at – 0. 2 %. in the same period, annual growth in loans to the private sector was zero. these data continue to support our assessment of a moderate underlying pace of monetary expansion and low inflationary pressures over the medium term. actual monetary developments are likely to be weaker than the underlying pace of monetary expansion, owing to the downward impact of the rather steep yield curve. looking ahead, m3 and credit growth is likely to remain weak for some time to come. the prevailing interest rate constellation continues to have a strong influence on both the level and composition of annual m3 growth. on the one hand, the low rates of remuneration on short - term bank deposits foster the allocation of funds away from m3 and into longer - term deposits and securities. on the other hand, the narrow spreads between the interest rates paid on different short - term deposits imply a low opportunity cost of holding

- term inflation expectations remain firmly anchored in line with the governing council ’ s aim of keeping inflation rates below, but close to, 2 % over the medium term. we will continue our enhanced credit support to the banking system, while taking into account the ongoing improvement in financial market conditions and avoiding distortions associated with maintaining non - standard measures for too long. the governing council will, in early march, take decisions on the continued implementation of the gradual phasing - out of the extraordinary liquidity measures that are not needed to the same extent as in the past. in order to counter effectively any threat to price stability over the medium to longer term, the liquidity provided will be absorbed when necessary. accordingly, we will continue to monitor very closely all developments over the period ahead. as regards fiscal policies, many euro area countries are faced with large, sharply rising fiscal imbalances, leading to less favourable medium and long - term interest rates and lower levels of private investment. moreover, high levels of public deficit and debt place an additional burden on monetary policy and undermine the stability and growth pact as a key pillar of economic and monetary union. against this background, it is of paramount importance that the stability programme of each euro area country clearly defines the fiscal exit and consolidation strategies for the period ahead. countries will be required to meet their commitments under the excessive deficit procedures. consolidation of public finances should start in 2011 at the latest and will have to exceed substantially the annual adjustment of 0. 5 % of gdp set as a minimum requirement by the stability and growth pact. a strong focus on expenditure reforms is needed. the key challenge in order to reinforce sustainable growth and job creation is to accelerate structural reforms, as the financial crisis has negatively affected the productive capacity of our economies. in the case of product markets, policies that enhance competition and innovation are urgently needed to speed up restructuring and investment and to create new business opportunities. in labour markets, moderate wage - setting, effective incentives to work and sufficient labour market flexibility are required in order to avoid significantly higher structural unemployment over the coming years. finally, an appropriate restructuring of the banking sector should play an important role. sound balance sheets, effective risk management and transparent, robust business models are key to strengthening banks ’ resilience to shocks, thereby laying the foundations for sustainable growth and financial stability. we are now at your disposal for questions.