stability. even though the latter is certainly a precondition for price stability, this change could raise potential conflicts between the two objectives, undermining the credibility of central banks and the effectiveness of their policies. preserving financial stability should instead be the main task of macroprudential action. the same considerations apply to regulation and microprudential supervision : each policy can work well only if it has clear objectives and targeted intervention tools to achieve them. the deterioration in the international outlook has also had a strong negative impact on the italian economy : economic activity progressively weakened in 2018, recording a slight contraction – a so - called “ technical recession ” – in the second half of the year. overall gdp growth was just 0. 9 per cent last year, around half the level recorded in 2017 ; all the main international forecasters expect it to decelerate further this year. the slowdown of activity in germany, with which we share close economic ties, and the fall in business confidence, have been especially important factors in the weakness of aggregate demand and, especially, the marked deceleration in investment by italian firms. our surveys confirm that weak capital accumulation reflects greater cautiousness on the part of enterprises in the face of uncertainty about economic and political factors, and the persistent trade tensions. economic activity returned to slightly positive growth in the early months of this year : according to the preliminary estimate gdp increased by 0. 2 per cent in the first quarter of 2019. this trend could continue, especially if the global rebound in investors ’ confidence observed since late 2018 proceeds and continues to exert its effects in italy too. but to fully recover the path of sustainable growth, italy must tackle its two main structural problems : the stagnation of productivity observed since the 1990s and the high level of public debt. italy has been growing on average by around 1 percentage point less than the rest of the euro area since 1999. this is the result of the country ’ s delayed response to the big changes of our era : globalisation and the technological revolution. a short - lived relief provided by fiscal or monetary policy, albeit important, is not enough to solve this problem. to address it, italy must quickly adopt a consistent growth strategy combining measures to support innovation, with those to improve the quality of human capital, and to create a more favourable environment for “ doing business ”. following the double - dip recession associated with the two financial crises that erupted in the past decade ( the global financial crisis of 2007 – 09 and the euro

our monetary policy. should we go further, below r *? i wouldn't exclude it in the future, if growth were to remain subdued and inflation at risk of falling below target. but as a pragmatist, let me stress that these two questions are not urgent : the first part of the journey till the " confidence zone " of r * is clear and still significant ; we will then have time and additional data to adjust for the second part. and this brings me to the pace of this first part. which pace to remove the restrictive bias? the name of the game here is and remains full optionality, combining the two dimensions of pace which are the frequency of rate cuts and their size. we'll discuss in each of our next meetings, and look at data – be they actual or forecasts. that said, let me give two indications : seen from today, there is every reason to cut on december 12th. optionality should remain open on the size of the cut, depending on incoming data, economic projections and our risk assessment. optionality also means that, for the following meetings, we shouldn't exclude any of them for possible cuts. stating so the obvious, i don't mean to precommit to cut " back to back " in each of these meetings : this would be a renewed and excessive 2 / 5 bis - central bankers'speeches forward guidance. we should stick, as we did in october, to what i call an " agile pragmatism ", data driven but not timid. ii. some thoughts about our unconventional toolkit looking back now to the last 10 years, let me turn to some personal reflections on the two broad sets of " non - conventional " instruments. it will be a focus of our next strategy review. by the way, we should avoid the possible trap of the " immediate weather forecast ". in the previous 2021 review, we were just exiting the period of lowflation and even the risk of covid deflation, and we were unconditionally positive about our nonconventional toolsvi : " [ the ] assessment [ conducted as part of the strategic review ] found that each of the instruments ( including negative interest rates, forward guidance, asset purchases and longer - term refinancing operations ) has been effective in raising output, employment and inflation, and that the different instruments have reinforced each other. " let us be careful not to make a symmetrical one - sided assessment today :