catch up to the price level increases that have already occurred and also the improvement in the labour market – is also a significant contributor to higher and more persistent inflation, while exchange rate depreciation has also added to price pressures. at the same time, the staff projections continue to see a steep reduction in inflation over the projection horizon. while core inflation is expected to remain at elevated levels until the middle of 2023, it is expected to decline thereafter as re - opening effects subside and as supply bottlenecks and energy input cost pressures ease. the projected decline in inflation is also supported by the indicators that suggest that most measures of longer - term inflation expectations currently stand at around two per cent, although recent above - target revisions to some indicators warrant continued monitoring. in terms of the risk assessment, the risks to the inflation outlook are primarily on the upside. the major risk in the short term is a further disruption of energy supplies. over the medium term, inflation may turn out to be higher than expected because of a persistent worsening of the production capacity of the euro area economy, further increases in energy and food prices, a rise in inflation expectations above our target, or higher than anticipated wage rises. however, if energy costs were to decline or demand were to weaken over the medium term, it would lower pressures on prices. this inflation outlook forms the context for the setting of monetary policy. last week ’ s decision is closely linked to our monetary policy strategy, which stipulates that the appropriate monetary policy response to a deviation of inflation from the symmetric two per cent target is context - specific and depends on the origin, magnitude and persistence of the deviation. in the context of a long projected period with inflation far above target, the net upside risks to inflation and taking into account that the current setting of the key policy rates is still highly accommodative, it was appropriate to take a major step that frontloads the transition from the prevailing highly - accommodative level of policy rates towards levels that will support a timely return of inflation to our target. moreover, all else being equal, in calibrating a multi - step transition path, the appropriate size of an individual increment will be larger, the wider the gap to the terminal rate and the more skewed the risks to the inflation target. at the same time, it is crystal clear that the appropriate monetary policy for the euro area should continue to take into account that the energy shock remains a dominant driving force

sabine lautenschlager : europe - past, present and future speech by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, at a meeting with students at copenhagen university, copenhagen, 14 may 2018. * * * it ’ s always nice to visit universities. they are special places, meant for the free exchange of ideas – places where bold thinking is encouraged and the orthodoxy challenged. so today i ’ m going to step back from the technical aspects of my day - to - day work. i ’ m going to take some time to reflect instead on the big picture. i will first talk about some of the eu ’ s historical milestones. after that, i will tell you a bit about my work. and once i ’ ve finished my brief remarks, i look forward to answering your questions – and to asking you some of my own! looking back to look forward as students of economics, many of you will, i ’ m sure, have read articles and books about the future of european economic and monetary union. some of you may even have read about the new system for banking supervision and resolution – the banking union. i hope you have enjoyed learning about these topics. but i also think it ’ s important for students to look beyond technical policy debates. from time to time, it ’ s good practice to go back to the fundamental questions. things like : what has the european union achieved in the past 60 years? and what would we like it to achieve in the next 60? we insiders would also benefit from this kind of reflection. in the humdrum of meetings, papers, non - papers and briefings, i feel that we do not take enough time to reflect on the achievements of the past. nor, perhaps, do we think enough about the strategic, long - term perspective. so today i hope that, together, we can do just that. let us start by travelling back in time. let ’ s try to put ourselves in the shoes of a european citizen in 1945. whether we imagine this person living in paris, berlin, rome or copenhagen, we know they are living in a country scarred by war. now, if this person were able to see what the future would hold from 1945 to 2018, they would find it in many ways almost miraculous. for one thing, anyone over the age of 27 in 1945 had lived through two world wars. so