has proven indispensable in conditions where monetary policy transmission is impaired or where space for interest rate cuts is limited. third, we have seen the importance of a strong accountability framework, particularly when central banks have to use new tools that are not well - understood by the public. central banks are powerful and independent, but they are unelected. this combination can only be squared if they are held accountable by elected authorities. in light of this, we have stepped up our efforts to improve our communication and strengthen our accountability in recent years. the governing council has started to publish the accounts of its monetary policy meetings. the ecb and the european parliament have increased the intensity and focus of their exchanges. 2 all this has provided us with more opportunities to explain our decisions and demonstrate how the ecb is acting in accordance with its mandate, which is a fundamental pillar of its legitimacy. the crisis has offered many lessons beyond monetary policy, too. the euro area entered the crisis with an incomplete institutional and regulatory framework, not only for the banking sector but also in other areas of economic policy. the creation of the banking union and the european stability mechanism has strengthened the ability of eu authorities to intervene decisively in future crises. reforms at national level, and the strong political commitment to the euro shown by european policymakers, were equally instrumental in strengthening the foundations of our common project. but the necessary changes took time, and it was time that the euro area lost in its recovery. our monetary union is now in better shape, but further progress can and should be made. as i had the opportunity to discuss during my regular hearing before the committee on economic and monetary affairs, and as your draft resolution points out, the priority now is to increase the resilience of the euro area. this would also strengthen the transmission of monetary policy in future downturns. 3 resilience depends on the euro area being able to use a broad policy mix involving monetary, fiscal, prudential and structural instruments. 4 conclusion let me conclude. the first two decades of the euro area have seen an evolution in the way the ecb conducts its monetary policy. faced with unprecedented threats to price stability, the ecb adapted its policy instruments to continue delivering on its mandate. we will continue to do so if and when needed, in compliance with our mandate as defined by the eu treaties, and with all the independence over our tools as defined by our legal framework. today, we can say that the euro area has emerged from

from an inflation perspective, we cannot be satisfied yet. we need patience and persistence. we need to be patient because inflation convergence needs more time to show through convincingly in the data. and we need to be persistent, because our baseline for future inflation remains crucially contingent on very easy financing conditions which, to a large extent, depend on the current accommodative monetary policy stance. the bank for international settlements ( bis ) says that we should increase interest rates so as to keep some ammunition in reserve in case we encounter difficult times again. but if we increase interest rates and tighten policy too quickly, we could jeopardise the recovery and end up further away than ever from our ( inflation ) target. the ecb has pumped more than €2 trillion into the market. how confident are you that all those funds can be absorbed in an orderly manner? the ecb governing council will discuss the conclusions for monetary policy and what this 1 / 5 bis central bankers'speeches means for quantitative easing. i can ’ t say anything about that yet. we do say that we still need a long period of accommodative policy before we are ready. as the economic prospects brighten, higher expected returns on business investment will make borrowing conditions increasingly attractive. this will reinforce accommodation and make sure that inflation sustainably converges towards our objective of below, but close to, 2 % over the medium term. growth is picking up and unemployment is going down, but wages are not really increasing. doesn ’ t that totally contradict traditional economic theory? wages are also a reflection of the past. wage increases are partly based on current inflation rates and they are relatively low at the moment. let us also not forget that the level of unemployment is still high. that merely underlines that the process of reflation is a long one that remains highly dependent on accommodative monetary policy. but will the wages still evolve in the same way as before, now that all kinds of new factors are emerging such as computerisation, flexible jobs, etc? are the ecb ’ s instruments still reliable? well, how do you measure the impact of china on international competition, of e - commerce, of automation? we have many internal discussions about that, about whether something in the inflation process has broken down. the phillips curve ( which shows that wages rise when unemployment falls ) is not broken, but it is flatter and the process is slower. wage inflation is on the way, but we