target for a prolonged period. in this context, it is essential that inflation expectations are anchored by the commitment of the central bank to offset the negative pandemic shock to the inflation path and ensure convergence to the inflation aim over the medium term. under these conditions, the first challenge in delivering the medium - term inflation aim is to reconnect inflation to its pre - pandemic projected path. this means boosting inflation momentum towards the upper part of the “ bcde ” area ( the grey shaded area ), so that the adjustment approaches the “ bcd ” path. by setting the monetary stance at the appropriate level to deliver the financial conditions required to offset the pandemic shock to inflation, the underlying inflation trajectory will be restored. in turn, this also serves to underpin the formation of inflation expectations in a manner that is consistent with meeting the medium - term inflation aim. looking beyond the immediate task, even once the disinflationary pressures caused by the pandemic have been sufficiently offset, the second challenge will be to ensure that the postpandemic monetary policy stance will deliver the timely and robust convergence of inflation to our medium - term aim. in this context, our in - progress strategy review will help to shape the future course of our monetary policy. conclusion the pandemic constitutes a multi - phase challenge for monetary policy. in the initial weeks of the pandemic in spring 2020, the top priority was clearly to stabilise markets. with the ongoing https : / / www. ecb. europa. eu / press / key / date / 2020 / html / ecb. sp201126 ~ c5c1036327. en. html 17 / 19 01 / 12 / 2020 monetary policy in a pandemic : ensuring favourable financing conditions interruptions to economic activity throughout 2020 and running into 2021, monetary policy continues to have a clear role to play in ensuring the preservation of favourable financial conditions. this will remain an essential priority even in the post - pandemic phase, given that the macroeconomic hit from the pandemic is likely to persist even after medical solutions have been rolled out. only by ensuring appropriately - favourable financial conditions will the full economic recovery be assured and, by countering the negative impact of the pandemic on the projected inflation path, will robust convergence to our medium - term inflation aim be copperfastened. [ 1 ] i am grateful to krzysztof bankowski, giacomo carboni

the exchange rate mechanism of the eu, for at least two years, and third, after the sustainable fulfilment of all the convergence criteria laid down in the treaty, the new member states will adopt the euro. throughout the process leading to the introduction of the euro, the new member states'economic situations and their policy strategies will have to be assessed on a case - by - case basis. the role of erm ii in this process, first, is to help participating member states orient their policies to stability and to foster economic convergence. second, participation in erm ii without severe tensions for at least two years is one of the convergence criteria. finally, entry into the euro area will be based on the sustainable fulfilment of the maastricht convergence criteria. these criteria will be applied to future euro area entrants in the same way they applied to euro area countries. it may take quite a while before new member states will be in a position to fully participate in emu. a fair share of realism is called for to avoid disappointment. in the long run, such an equitable and strict procedure will be to the advantage of all member states of the european union. in concluding, i would like to reiterate that in many respects, the euro has proved to be a driving force for europe's continued political integration and economic reforms. the euro is regarded as an important token of identity for a modern, dynamic and open europe. the euro provides a stable anchor in unfortunately not so stable times. but the euro can only shield us from external shocks within limits. even though the euro has already triggered considerable fiscal and structural reforms, we must not relinquish our endeavors to make the euro area economy more efficient and productive.