currency union ” in the balance of my comments, while recognising that for all practical purposes we are talking about “ dollarisation ”, be it “ australian dollarisation ” or “ us dollarisation ”. some myths about currency union before i comment on some of the economic advantages and disadvantages of currency union, it might be helpful to dispose of a few of the myths that have become rather prevalent. the first myth is that the reserve bank is opposed to currency union, perhaps because “ don brash would lose his job ”. certainly, if we “ dollarised ”, using either the australian dollar or the us dollar, there would be no need for anybody to be employed by the reserve bank of new zealand and those now employed by the bank would lose their jobs. if we went into a currency union, presumably with australia, it is also likely that many existing reserve bank staff would lose their jobs ( though i must admit that the european precedent perhaps suggests that job losses would not be great in that situation! ). but i can assure you that neither the reserve bank nor don brash is opposed to currency union. nor are we promoting currency union. as indicated a moment ago, the bank ’ s responsibility is to advise ministers about the economic implications of currency union, both the pros and the cons, and to foster informed public discussion on the issue. the second myth is that small countries are in some ways just too vulnerable to have their own currencies in the modern world. this is sometimes expressed in terms of the metaphor of a tiny rowing boat, tossed around in a turbulent ocean, with the turbulence arising from the vast flows of capital which every day wash backwards and forwards at the click of a mouse. but there are some extremely successful small countries with their own currencies - singapore and switzerland spring immediately to mind - and, contrary to popular mythology, the new zealand dollar is not a particularly volatile currency. not a particularly volatile currency? no. the reserve bank has looked at this issue both in terms of short - term volatility and in terms of the big exchange rate swings which are, i suspect, of rather greater concern. looking at short - term volatility ( measured as 30 day volatility against the united states dollar ), the new zealand dollar was more volatile than the australian dollar, the british pound, the japanese yen, and the german mark between the time of the float in march 1985 and august 1988. but for most of the period

christine lagarde : ecb press conference - introductory statement introductory statement by ms christine lagarde, president of the european central bank, and mr luis de guindos, vice - president of the european central bank, frankfurt am main, 10 december 2020. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. we will now report on the outcome of today ’ s meeting of the governing council, which was also attended by the commission executive vice - president, mr dombrovskis. while the rebound of economic activity in the third quarter was stronger than expected and the prospects for the roll - out of vaccines are encouraging, the pandemic continues to pose serious risks to public health and to the euro area and global economies. the resurgence in covid - 19 cases and the associated containment measures are significantly restricting euro area economic activity, which is expected to have contracted in the fourth quarter of 2020. while activity in the manufacturing sector continues to hold up well, services activity is being severely curbed by the increase in infection rates and the new restrictions on social interaction and mobility. inflation remains very low in the context of weak demand and significant slack in labour and product markets. overall, the incoming data and our staff projections suggest a more pronounced near - term impact of the pandemic on the economy and a more protracted weakness in inflation than previously envisaged. in view of the economic fallout from the resurgence of the pandemic, today the governing council recalibrated its monetary policy instruments as follows : first, the governing council decided to keep the key ecb interest rates unchanged. we expect them to remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 per cent within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics. second, we decided to increase the envelope of the pandemic emergency purchase programme ( pepp ) by €500 billion to a total of €1, 850 billion. we also extended the horizon for net purchases under the pepp to at least the end of march 2022. in any case, we will conduct net purchases until the governing council judges that the coronavirus crisis phase is over. we will conduct our purchases under the pepp to preserve favourable financing conditions over this extended period. we will purchase flexibly according to market conditions and with a view to preventing a tightening of