economic policy tool a decade ago. its primary objective is to maintain price stability in the euro area over the medium term. from the point of view of domestic requirements, the monetary and financial conditions in which spanish households and businesses have been operating have been becoming progressively tighter and are currently more in line with the need to stem inflationary pressures in the spanish economy. for its part, the fiscal position is in a favourable starting position since public finances were again in surplus in 2007 ( 2. 2 % of gdp ) and the debt ratio stood at 36. 2 % of gdp, levels unprecedented in the recent history of the spanish economy. these results reflect the strong commitment of previous governments to fiscal discipline, but also substantial growth of the spanish economy in recent years and the buoyancy of the property market. that has resulted in strong growth in tax revenues, exceeding that seen in previous upturns. accordingly, the fiscal projections that are consistent with the macroeconomic scenario i have set out today point to the fiscal surplus almost disappearing in 2009. with this in mind, when designing the appropriate fiscal policy strategy for the downturn in the spanish economy, it makes complete sense to give free rein to the automatic stabilisers, whose movement tends to counter cyclical fluctuations. this is one of the great advantages arising from the fiscal consolidation drive that took place during the expansion. the automatic nature of these instruments makes them the most suitable ones for stabilisation, because they respond rapidly to changes in the cycle, they help agents to form correct expectations regarding the authorities ’ actions and they boost confidence. however, discretionary increases in public spending and tax reductions beyond the specific scope of the automatic stabilisers should be avoided, since they may compromise the maintenance of medium and long - term budgetary stability and eliminate the fiscal policy leeway to respond to sharper slowdowns. maintaining a stance of budgetary stability during the downturn is, in any case, compatible with measures that may alter the composition of revenues and spending, without giving rise to a permanent deterioration in the budgetary situation, especially if such measures contribute to enhancing the quality of public finances and the efficiency of the economy. but, for this to be possible, it is essential to strive to contain expenditure, by means of countermeasures in those areas that offer the most scope for cost reductions, at all levels of general government. it would seem, then, that the promotion of structural measures and reforms, geared towards improving the functioning of markets, making

will be how to translate the findings from new data into concrete policy implications. after all, the micro evidence has to add up to policy advice for monetary policy which is a macro policy with a rather limited set of instruments. therefore, in some cases, other policies – such as macro - prudential, fiscal or structural policies – could be more appropriate for tackling the challenges that new data reveal. thank you for your attention. 1 liquidity - constrained households are indeed unable or unwilling to borrow against the future rise in income that the promise of low rates underpins ( kaplan et al. ). according to lenza and slacalek, the effects of qe and unconventional monetary policy on income via lower unemployment ( benefiting the poor ) are more significant than the effects of high prices for financial assets ( benefiting the wealthy ). 3 globalisation is another structural phenomenon that has the potential to influence our thinking about monetary policy – a view the bis often emphasises – and which could also have implications for what data to monitor. as claudio borio from the bis suggests, many of the issues surrounding digitalisation could apply in a somewhat similar way for globalisation as well ( i refer to his “ through the looking glass " speech from 2017 ). 4 / 4 bis central bankers'speeches