current €60 billion per month to zero. but can it be done so easily? the bond spreads for countries such as italy might once again shoot upwards, as during the euro crisis. if the spreads for a particular country rise, that ’ s not a monetary policy problem. we are not singling out particular countries and neither are we there to ensure governments have favourable financing conditions. when the day comes, we will look at inflation and act accordingly, regardless of whether governments complain. we forewarned them and they clearly understood that. i have just read a commentary by the italian minister of economy and finance, pier carlo padoan. “ when the bond purchases come to an end, we are on our own ”, he writes. and he ’ s right. italy is currently in any case the euro area ’ s problem child. nowhere else is the economy growing so slowly ; nowhere else are the banks sitting on so many non - performing loans. how serious is the situation? indeed, the italian economy hasn ’ t grown for 20 years. real gdp per capita – taking inflation into account – has stagnated over that period. italy therefore has a deep - seated problem. the government is addressing that, but it also has to convince people to support the reforms. in fact, the economy has great potential, with very many creative enterprises. until now, greece was always the euro area ’ s shakiest prospect. but the country has just agreed on new loans and further debt relief with its international creditors. observers are now expecting the ecb to also accept greek government bonds in its purchase programme. they have been excluded until now because of doubts about the sustainability of the country ’ s debt. before we change any aspects of the asset purchase programme, we need to conduct our own analysis of greece ’ s debt sustainability. we will not rely on others for that. whether it ’ s the european stability mechanism or the european commission, everyone has their own perspective. but when it comes to buying bonds, we have to take a look for ourselves. 2 / 3 bis central bankers'speeches that means the answer is “ no ”? that means we have to take a look for ourselves. the brexit negotiations started this week. from an economist ’ s perspective, how important is it that the eu and the united kingdom reach an agreement? extremely important. when we say that the economic outlook for the euro area is good and that risks are broadly balanced, that doesn ’ t mean that there

expectations, then wealth and income are transferred from one group to the other. the best way to be neutral is to announce a target that can efficiently guide expectations. to a non - economist, price stability would imply targeting zero inflation. however, we need to explain why targeting zero inflation is not ideal. real wage adjustments can be necessary to maintain competitiveness and sustain employment and this real adjustment is easier to achieve with a positive inflation rate. this is still more important in a monetary union in which real adjustments are necessary to maintain internal balance. the effective lower bound ( elb ) on nominal interest rates would also be reached more frequently, putting a constraint on the use of monetary policy. but i do acknowledge that using the elb argument at, say a family lunch on sunday, is easier said than done. last but not least, credibility. here, households and firms have mixed feelings : they believe that actual inflation is much higher than central banks and statistics institutes claim ; and they doubt we will deliver the “ close to 2 % ” in the future. distrust is too often the name of the game. here, let us again listen and speak. first listen to the inflation expectations of households and firms : we don ’ t measure them properly today, although they are of the essence for economic transmission of monetary policy, as households and firms are the actual priceand wage - setters. indeed, their price expectations are quite different from those of financial markets we tend to focus on. listen and then speak : once a central bank has committed to a target, it must use every tool available to deliver on it and explain clearly that the transmission of the monetary impulse to the economy entails some delays. we are all page 10 sur 10 convinced that a credible inflation objective makes stabilizing inflation easier because the objective anchors inflation expectations. let us convince our fellow citizens of our determination, “ in plain language ” – i hope my remarks today help somewhat to initiate this essential debate we will have to conduct and conclude in our ecb strategy review. thank you for your attention. references i i would particularly like to thank nathalie aufauvre, matthieu bussiere, olivier garnier, ivan odonnat and adrian penalver for their help in preparing this speech. ii https : / / www. ecb. europa. eu / press / pr / date / 2020 / html / ecb. pr200123 ~ 3b8d9fc08d. en. html https