area have been especially weak in manufacturing. the purchasing managers ’ index for the manufacturing sector has declined significantly. recently, manufacturing output has declined in germany. during 2018, it was thought that the headwinds for the euro area economy were mostly coming from idiosyncratic factors related, in particular, to the auto industry. in the course of this year it has become more likely that we are witnessing a more lasting deterioration. however, all this recent gloom in international trade and manufacturing does not necessarily mean a serious slump in the euro area economy as a whole. domestic demand has remained quite robust, supported by an accommodative monetary policy and strong labor markets. [ slide 6 ] the unemployment rate in the euro area stood at 7. 5 % in june, close to an all - time low. the labor force participation rate has risen from 59 % to 67 %, the highest level ever recorded. moreover, since reaching the trough of the business cycle over six years ago, euro area employment has increased by about 10. 5 million persons. so, the strong labor market development is supporting domestic demand in the euro area and partly compensating for the decline in external demand. [ slide 7 ] however, despite the stronger labour market and accelerating wages, inflationary pressures remain muted and indicators of inflation expectations have declined with the weakening economic outlook. therefore, a significant degree of monetary stimulus continues to be necessary to ensure that financial conditions remain very favourable and to support euro area growth and domestic price pressures. in its meeting in july 25, the ecb governing council communicated the need for a highly accommodative monetary policy stance for a prolonged period, as inflation rates, both realised and projected, have been persistently below levels that are in line with our aim. 2 if the medium - term inflation outlook continues to fall short of our aim, the governing council is determined to act, in line with its commitment to symmetry in the inflation aim. with the symmetric approach, inflation may vary around 2 % in the short - term, to reach our target in the medium term, thus supporting the anchoring of inflation expectations. we stand ready to adjust all of our instruments, as appropriate, to make inflation converge towards its aim in a sustained manner. we are currently examining options, including ways to reinforce our forward guidance on policy rates, mitigating measures related to the negative deposit facility rate – such as the design of a tiered system for reserve remuneration – and options for the

crisis era, the world trade organisation is in great need of reform today. that could be one important transatlantic project for the coming years. when we join forces, we are stronger. i am always happy to see europe and the united states acting together and improving the multilateral system. i ’ d like to see more of that. thank you very much for your attention! 1 the official name is economic and monetary union ( emu ), but i use european monetary union here to adapt to a u. s. audience. 2 the june 2019 eurosystem staff forecast for the euro area foresees annual hicp inflation at 1. 3 % in 2019, 1. 4 % in 2020 and 1. 6 % in 2021. 4 / 4 bis central bankers'speeches