circumstances, the automatic stabilisers should only be allowed to work fully in those countries whose budget positions are close to balance or in surplus. let me emphasise that a medium - term perspective is essential for the conduct of fiscal policies in all euro area countries. short - term discretionary measures aimed at strengthening domestic demand risk having an unwelcome impact on the economy, not least on account of time lags. in addition, if such measures are not consistent with the pact, they may undermine the credibility of the consolidation process. in their efforts to set the conditions for further expanding the production potential of the euro area, governments should also give more impetus to the implementation of structural reforms. selective fiscal reforms, including those related to pension reforms, should provide the correct incentives to economic agents. labour and product market reforms will be beneficial to employment growth in the euro area and improve the resilience of the euro area economy to adverse shocks in the future. finally, i should like to draw your attention to a press release that was issued today on the ecb decision on the denominations, specifications, reproduction, exchange and withdrawal of euro banknotes.

european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 3 february 2011. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. we will now report on the outcome of today ’ s meeting. based on its regular economic and monetary analyses, the governing council confirmed that the current key ecb interest rates still remain appropriate. it therefore decided to leave them unchanged. taking into account all the new information and analyses which have become available since our meeting on 13 january 2011, we continue to see evidence of short - term upward pressure on overall inflation, mainly owing to energy and commodity prices. this has not so far affected our assessment that price developments will remain in line with price stability over the policy - relevant horizon. at the same time, very close monitoring is warranted. recent economic data confirm the positive underlying momentum of economic activity in the euro area, while uncertainty remains elevated. our monetary analysis indicates that inflationary pressures over the medium to long term should remain contained. inflation expectations remain firmly anchored in line with our aim of keeping inflation rates below, but close to, 2 % over the medium term. the continued firm anchoring of inflation expectations is of the essence. overall, we expect price stability to be maintained over the medium term, and the current monetary policy stance remains accommodative. the stance, the provision of liquidity and the allotment modes will be adjusted as appropriate, taking into account the fact that all the non - standard measures taken during the period of acute financial market tensions are, by construction, temporary in nature. accordingly, the governing council will continue to monitor all developments over the period ahead very closely. let me now explain our assessment in greater detail, starting with the economic analysis. following the 0. 3 % quarter - on - quarter increase in euro area real gdp in the third quarter of 2010, recent statistical releases and survey - based evidence for the fourth quarter and the beginning of the year continue to confirm the positive underlying momentum of economic activity in the euro area. looking ahead, euro area exports should benefit from the ongoing recovery in the world economy. at the same time, taking into account the relatively high level of business confidence in the euro area, private sector domestic demand should increasingly contribute to growth, supported by the acc