standard supervisory measures and early intervention measures, for instance. as we are obliged to apply the least intrusive tool, the overlap often prevents us from taking early intervention measures. we also need to expand our toolbox to include a harmonised moratorium tool. finally, national insolvency laws need to be aligned. all this would make the single resolution mechanism even more effective. these measures will help to better contain risks in the future. however, we also have to reduce the risks we face today. non - performing loans ( npls ) currently pose one of the biggest risks to the european banking sector. they need to be dealt with first and foremost by the banks themselves. some progress has been made on this front, although more needs to be done. in addition, supervisors need to play their part. european supervisors closely monitor how banks approach npls, and in 2017 and 2018 the ecb published guidance on the subject. the aim is not only to resolve the current npl problem, but also to keep it from recurring in the future. finally, legislators also need to address the issue of npls. across the euro area, legal and judicial systems differ substantially in terms of effectiveness and efficiency when it comes to 1 / 2 bis central bankers'speeches dealing with npls. the time and resources required to resolve npls thus differ from country to country. national legislators should strive to improve legal and judicial frameworks. in the end, tackling npls requires a joint effort by banks, supervisors and legislators. to sum up, there are still things we can do to reduce risks in the euro area. in doing so, we will grow closer together, and that in turn will help to reduce risks further ; european banking supervision is a prime example of this. we must thus be careful not to reach a point where we neither reduce risks nor grow closer together. we have to keep moving on both fronts ; only then will we reach our destination of a more stable and prosperous european union. 2 / 2 bis central bankers'speeches

benoit cœure : exchange of views with members of the high council of public finance introductory remarks by mr benoit cœure, member of the executive board of the european central bank, prior to an informal exchange of views with the high council of public finance, paris, 17 july 2019. * * * thank you for inviting me to the high council of public finance. it is a pleasure to engage in an informal exchange of views with you on the monetary policy of the european central bank ( ecb ) and more broadly on economic and monetary union ( emu ), with a specific focus on issues of relevance to fiscal policy. allow me to start by briefly discussing the economic situation of the euro area. the euro area economic outlook the euro area economy grew by 0. 4 %, quarter on quarter, in the first quarter of 2019, following an increase of 0. 2 % in the fourth quarter of 2018. however, incoming economic data and survey information point to somewhat weaker growth in the second and third quarters of this year. this reflects the ongoing weakness in international trade in an environment of prolonged global uncertainties, which are weighing in particular on the manufacturing sector. looking ahead, the euro area expansion will continue to be supported by favourable financing conditions, the mildly expansionary euro area fiscal stance, further employment gains and rising wages, and the ongoing – albeit somewhat slower – growth in global activity. this assessment is broadly reflected in the june 2019 eurosystem staff macroeconomic projections for the euro area, which foresee annual real gdp increasing by 1. 2 % in 2019, 1. 4 % in 2020 and 1. 4 % in 2021. the risks surrounding the euro area growth outlook continue to be tilted to the downside, on account of the prolonged presence of uncertainties related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets. according to eurostat ’ s flash estimate, euro area annual hicp inflation was 1. 2 % in june 2019, unchanged from may 2019. based on current futures prices for oil, annual hicp inflation is likely to decline over the coming months. adjusting for the temporary factors behind the recent volatility, measures of underlying inflation remain generally muted. looking further ahead, underlying inflation is expected to increase over the medium term, supported by our monetary policy measures, the ongoing economic expansion and stronger wage growth. this assessment is broadly reflected in the june 2019 eurosystem staff macroeconomic projections for the euro area, which