the euro area as well as cyprus have reached the pre - pandemic real gdp level within 2021, while a similar path has been recorded in the labour dynamics with the labour force participation having reached pre - pandemic levels. this has been achieved by the formulation of ample policy support. the ecb took a series of policy decisions aimed at achieving favourable financing conditions and alleviating the economic hit on households and businesses. more specifically, the ecb enhanced its asset purchase programme ( app ) with the introduction of the pandemic emergency purchase programme known as pepp, the size of which was 1. 85 trillion euros, in order to lower borrowing costs and re - establish 1 / 3 bis - central bankers'speeches favourable financing conditions within the eurozone. focusing on cyprus, the total amount of net asset purchases in government bonds reached €6, 86 billion euros at the end of february, 90 % of which was purchased by the cbc. at the pepp announcement, amid severe market fragmentation, the cyprus 10 year sovereign bond yield increased to 2, 21 % while within a quarter of these eurosystem bond purchases dropped by 1, 25 % ( reaching 0, 96 % in june ), exemplifying the benefits of these purchase programmes. furthermore, the cypriot banking system benefited from the use of tltro iii, as well as from the easing of macro prudential measures, in order to support access to credit. it should also be noted that through the explicit assurance to maintain supportive monetary policy for as long as needed, through our monetary policy forward guidance, the ecb is decisively strengthening the efforts to boost economic activity. turning to the current challenge that we are faced with, the russian invasion of ukraine has moderated expectations of a continued strong gdp expansion in the eurozone and cyprus, at least in the short - term. there is increased uncertainty about the economic impact, owing to the length and breadth of the conflict, the degree of severity of currently enacted sanctions and the extent of possible economic retaliation by russia. against this background, the world economy is experiencing a double hit by complex supply and demand shocks. economic impact in cyprus is expected to be channelled through the foreseen surge in oil prices, the trade in goods and services, such as minerals of oil and fuel, cereals, tourism, transportation and it services, and a negative impact on a specific part of professional services ( lawyers and accountants ), while significant confidence effects cannot be ruled out. a

of the european continent. a small island with a part of it under occupation, thrives thanks to its extroversion and its people, who despite having been put to the test so many times in the past, have never stopped creating, evolving and moving forward. i have no doubt that together with our european partners we will take all the necessary actions to overcome this challenge as well, guided by our common core values and principles. as the great french novelist victor hugo said, " changez vos opinions, gardez vos principes ; changez vos feuilles, gardez intactes vos raciness " " change your opinions, keep to your principles ; change your leaves, keep intact your roots ". here in cyprus we often say that " a captain is proven capable when she is in a storm ". and hence, i consider ourselves lucky since our ecb captain steering us through both the covid and geopolitical storms is christine lagarde, a leader of undoubted capacity and experience, whom i thank again for being with us today and would like to invite her to the podium to share her thoughts with us. 3 / 3 bis - central bankers'speeches