bernanke stood out was that he used qe far more aggressively than the boj ever did, introducing innovations as he went along. qe became “ credit easing ” when private assets were bought to stabilize financial markets, followed by another unconventional move – “ operation twist ” – to intervene directly at the long end of the yield curve with offsetting interventions at the short - end. the latest version of qe, as we all know, is an open ended commitment to purchase mortgage backed securities at the rate of $ 40 billion per month for as long as the “ labour market does not improve substantially ”. qe, in all its variations, was able to halt the downward deflationary spiral by making up for the declining velocity of money caused by deleveraging. it kept sovereign borrowing rates bis central bankers ’ speeches low in the face of a market revolt. it helped clean up the balance sheets of stressed financial institutions through cheap funding. the recovery from the great recession was relatively quick ; at least that was how it seemed through the “ green shoots ” of 2010. now, of course, we are no longer so sure. the limitations of macroeconomic techniques honed through deconstructing the great depression, the inflationary seventies and the great moderation are there for all to see. quite understandably, therefore, qe has its critics. it may be relevant to recall some of the criticism. criticism of qe the main criticism has been that qe is being continued beyond its usefulness. what the us economy requires now is a fiscal stimulus, and further qe is no substitute for a fiscal stimulus. it would only stoke inflationary pressures down the line. a second criticism, in fact a corollary to the first one, has been the argument that stretching monetary policy to unconventional levels has obliterated the firewall between fiscal and monetary policies, with monetary policy increasingly becoming an extension of fiscal policy, thereby renewing concerns about the fiscal dominance of monetary policy. third, whereas fiscal stimulus leads to higher taxes down the line, the combination of zerobound interest rates and qe is an immediate tax on savers, who in effect finance the stimulus. this tax on savings should induce people to consume and invest more, and save less. but with impaired balance sheets, they are possibly saving even more. given this outcome, some have questioned the circumstances under which and the extent to which qe can trigger a virtuous cycle of demand for and supply of credit to

. that is, of course, if it is high - quality public investment which is well - targeted and can enhance the potential output. this is why a consistent and speedy implementation of the next generation eu package will be so important for europe in the near - term horizon. at the heart of the package is the recovery and resilience facility ( rrf ). by supporting member states ’ reforms and public investment, the rrf will provide an anti - cyclical fiscal impulse in the immediate term – much needed across many parts of europe. and i do believe that, given the current circumstances, it can catalyse private sector investment. however, there is a risk that the european money will not be disbursed quickly enough because of administrative obstacles or because the rrf plans put forward by member states may simply lack ambition. lithuania has a good track record regarding the absorption rates of european funds – we currently rank ninth in terms of the 2014 – 2020 financial perspective. but we cannot grow complacent. 1 / 3 bis central bankers'speeches lithuania should take full advantage of the rrf funding and put forward a high - quality plan for the commission in april. by this, i mean a plan that is based on a rigorous cost - benefit analysis and is in line with the european priorities. the bank of lithuania stands ready to mobilise its expert capacities to help ensure that the plan advances a serious investment and reform agenda. this leads me directly to the long - term perspective. according to the latest data, lithuania ’ s gdp decreased by 1. 3 % in 2020, beating the previous forecasts made both by the bank of lithuania and international institutions. and this is despite the ongoing second lockdown. in this light, the rrf is important to lithuania not so much as an immediate relief measure, but as a tool for long - term economic transformation over the upcoming years and even decades. indeed, we need to think strategically of the post - pandemic world. at least three major forces will be shaping our future – shifts in supply chains, digitalisation and climate change. our investment strategies will have to accommodate these trends. first, the pandemic has, at least partly, provided an impulse to reverse globalisation. vulnerabilities related to global value chains have been exposed. countries and regions have declared their intensions to repatriate the production of strategically important goods. it is crucial that lithuania, which has not yet achieved full economic convergence with