with remaining fiscal imbalances have committed themselves to implement consolidation plans in order to reach budgetary positions close to balance or in surplus in the medium term. as part of this process, governments should put emphasis on growth - oriented consolidation policies that strengthen the productive forces of the economy. such policies are likely to be most effective when integrated into a comprehensive reform strategy based on structural retrenchment in spending. the fiscal policy framework, as laid down in the treaty and the stability and growth pact, provides a sound basis for limiting the risk of fiscal imbalances occurring. at the same time, it preserves an appropriate medium - term orientation for fiscal policy, based on realistic assumptions regarding economic developments. the governing council supports the steps taken by the commission to preserve the functioning of the framework, including the implementation of excessive deficit procedures and the issuing of early warnings, where required. turning to structural reforms, it is essential that governments intensify their efforts to expand the euro area's potential for non - inflationary growth and to reduce its high level of unemployment. the need for further progress in this field is particularly evident in a phase when the euro area economy has to adapt to a sequence of adverse shocks. indeed, such reforms, which should aim to reduce rigidities in labour and goods markets, could significantly enhance the degree of resilience of economic activity to such shocks, both in the euro area as a whole and in its regions. renewed momentum in the process of structural reform will be important to foster confidence among consumers and investors in long - term growth and employment opportunities in the euro area. this, in turn, should also have a positive effect on spending and investment decisions in the short and medium term. we are now at your disposal for questions.

european central bank : press conference - introductory statement introductory statement by mr willem f duisenberg, president of the european central bank and mr lucas papademos, vice - president of the european central bank, at the press conference held in frankfurt, 9 january 2003. * * * ladies and gentlemen, the vice - president and i will report on the outcome of today's meeting of the governing council of the ecb, which was also attended by the president of the ecofin council, mr. christodoulakis, and commissioner solbes. we have reviewed monetary, financial and economic developments and updated our assessment in light of the new information available. overall, we consider that the outlook for price stability in the medium term has not changed since our decision of 5 december to reduce the key ecb interest rates. we judge the current monetary policy stance appropriate to maintain a favourable outlook for price stability in the medium term. hence, we have decided to keep our key rates unchanged. as regards the analysis under the first pillar of our monetary policy strategy, the three - month average of the annual growth rates of m3 was 7. 1 % for the period from september to november 2002, unchanged from the period from august to october 2002. a strong preference of investors for liquid and secure assets, in an environment of continued financial market, economic and geopolitical uncertainty, remains a major driving force behind the strong monetary dynamics. furthermore, the low level of interest rates prevailing in the euro area makes the holding of monetary assets relatively attractive. as a result of the pace of monetary growth, liquidity in the euro area is ample. however, at the current juncture, given that the portfolio shifts due to economic and financial uncertainty may be a temporary phenomenon, and in light of the sluggish economic growth, the excess liquidity is deemed unlikely to translate into inflationary pressures. the continued decline in the growth of loans to the private sector up to november 2002 supports this assessment. turning to the second pillar, the outlook for economic activity in the euro area has remained broadly unchanged. as recently published survey data indicate, economic growth is likely to have remained subdued at the end of last year. for 2003, a gradual increase in real gdp growth rates to levels close to potential later in the year remains the main scenario, provided that the factors currently contributing to the general climate of uncertainty gradually unwind. although some stabilisation in financial markets has been observed over the past couple of months, investors continue to perceive