european central bank : press conference a€ “ introductory statement introductory statement by mr willem f duisenberg, president of the european central bank and mr christian noyer, vice - president of the european central bank, at the press conference, held in vienna, 11 october 2001. * * * ladies and gentlemen, the governing council of the european central bank met today for the fourth time outside frankfurt. let me first of all thank our host, governor liebscher, and the staff of the oesterreichische nationalbank, for the invitation to vienna and for the generous hospitality offered to us. as usual, the governing council conducted its examination of monetary and economic developments and analysis of their implications for the maintenance of price stability in the euro area. based on its assessment under both the first and second pillar, the governing council decided to keep the key ecb interest rates unchanged. the level of the key ecb interest rates at the current juncture is therefore seen as consistent with maintaining price stability over the medium term. given the high level of uncertainty in the international environment, we will continue to monitor developments very closely and thoroughly, and we will assess new information in the context of our medium - termoriented monetary policy strategy aimed at delivering price stability in the euro area. let me elaborate somewhat on the assessment provided under the two pillars of the monetary policy strategy of the ecb. looking at the first pillar, we have seen a strong increase in m3 growth over the past few months. however, a number of temporary factors play an important role in explaining recent monetary developments. notably the uncertainty in stock markets and the relatively flat yield curve until august have led to portfolio shifts by private investors from longer - term assets to short - term assets included in m3. furthermore, the growth of credit to the private sector continued to slow down in august. for these reasons, we do not judge that monetary developments signal risks to price stability at this juncture. this notwithstanding, the developments of m3 will have to be monitored carefully in the coming months. as regards the second pillar, the assessment is currently surrounded by a particularly high degree of uncertainty. this concerns in particular the international environment. last month's terrorist attacks had a negative impact on economic activity and confidence, which could delay the resumption of higher economic growth. against this background, it was important that policy - makers in the united states, the euro area and in other countries around the world acted with measures to support confidence. a further positive feature is

to the long - term prospects, in order to raise the rate of potential economic growth in the euro area, structural reforms in the size and composition of public revenue and expenditure, as well as in product and labour markets, have to continue. advances have been made in times of high real gdp growth, although in many areas, including in labour markets, more could have been achieved. as adjustment needs are likely to become more visible in periods of less vigorous economic growth, policy - makers must now intensify the acceleration of reforms rather than allow efforts to abate. moving forward the reform agenda decisively will enable the euro area economy to respond flexibly in future and thereby underpin our confidence that external shocks can be more easily absorbed than in the past.