mario draghi : ecb press conference – introductory statement introductory statement by mr mario draghi, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 6 september 2012. * * * 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 president of the eurogroup, prime minister juncker, and by the commission vice - president, mr rehn. based on our regular economic and monetary analyses, we decided to keep the key ecb interest rates unchanged. owing to high energy prices and increases in indirect taxes in some euro area countries, inflation rates are expected to remain above 2 % throughout 2012, to fall below that level again in the course of next year and to remain in line with price stability over the policy - relevant horizon. consistent with this picture, the underlying pace of monetary expansion remains subdued. inflation expectations for the euro area economy continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 % over the medium term. economic growth in the euro area is expected to remain weak, with the ongoing tensions in financial markets and heightened uncertainty weighing on confidence and sentiment. a renewed intensification of financial market tensions would have the potential to affect the balance of risks for both growth and inflation. it is against this background that the governing council today decided on the modalities for undertaking outright monetary transactions ( omts ) in secondary markets for sovereign bonds in the euro area. as we said a month ago, we need to be in the position to safeguard the monetary policy transmission mechanism in all countries of the euro area. we aim to preserve the singleness of our monetary policy and to ensure the proper transmission of our policy stance to the real economy throughout the area. omts will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro. hence, under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area. let me repeat what i said last month : we act strictly within our mandate to maintain price stability over the medium term ; we act independently in determining monetary policy ; and the euro is irreversible

. in order to restore confidence, policy - makers in the euro area need to push ahead with great determination with fiscal consolidation, structural reforms to enhance competitiveness and european institution - building. at the same time, governments must stand ready to activate the efsf / esm in the bond market when exceptional financial market circumstances and risks to financial stability exist – with strict and effective conditionality in line with the established guidelines. the adherence of governments to their commitments and the fulfilment by the efsf / esm of their role are necessary conditions for our outright transactions to be conducted and to be effective. details of the outright monetary transactions are described in a separate press release. furthermore, the governing council took decisions with a view to ensuring the availability of adequate collateral in eurosystem refinancing operations. the details of these measures are also elaborated in a separate press release. let me now explain our assessment in greater detail, starting with the economic analysis. recently published statistics indicate that euro area real gdp contracted by 0. 2 %, quarter on quarter, in the second quarter of 2012, following zero growth in the previous quarter. economic indicators point to continued weak economic activity in the remainder of 2012, in an environment of heightened uncertainty. looking beyond the short term, we expect the bis central bankers ’ speeches euro area economy to recover only very gradually. the growth momentum is expected to remain dampened by the necessary process of balance sheet adjustment in the financial and non - financial sectors, the existence of high unemployment and an uneven global recovery. the september 2012 ecb staff macroeconomic projections for the euro area foresee annual real gdp growth in a range between – 0. 6 % and – 0. 2 % for 2012 and between – 0. 4 % and 1. 4 % for 2013. compared with the june 2012 eurosystem staff macroeconomic projections, the ranges for 2012 and 2013 have been revised downwards. the risks surrounding the economic outlook for the euro area are assessed to be on the downside. they relate, in particular, to the tensions in several euro area financial markets and their potential spillover to the euro area real economy. these risks should be contained by effective action by all euro area policy - makers. euro area annual hicp inflation was 2. 6 % in august 2012, according to eurostat ’ s flash estimate, compared with 2. 4 % in the previous month. this increase is mainly due to renewed increases in euro - denominated energy prices. on