inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. the governing council confirms that it will discontinue the reinvestments under the asset purchase programme as of july 2023. the decisions taken today are set out in a press release available on our website. i will now outline in more detail how we see the economy and inflation developing and will then explain our assessment of financial and monetary conditions. 1 / 10 bis - central bankers'speeches economic activity the euro area economy has stagnated in recent months. as in the fourth quarter of last year, it shrank by 0. 1 per cent in the first quarter of 2023, amid a drop in private and public consumption. economic growth is likely to remain weak in the short run but strengthen in the course of the year, as inflation comes down and supply disruptions continue to ease. conditions in different sectors of the economy are uneven : manufacturing continues to weaken, partly owing to lower global demand and tighter euro area financing conditions, while services remain resilient. the labour market remains a source of strength. almost a million new jobs were added in the first quarter of the year and the unemployment rate stood at its historical low of 6. 5 per cent in april. the average number of hours worked has also increased, although it is still somewhat below its pre - pandemic level. as the energy crisis fades, governments should roll back the related support measures promptly and in a concerted manner to avoid driving up medium - term inflationary pressures, which would call for a stronger monetary policy response. fiscal policies should be designed to make our economy more productive and gradually bring down high public debt. policies to enhance the euro area's supply capacity, especially in the energy sector, can also help reduce price pressures in the medium term. the reform of the eu's economic governance framework should be concluded soon. inflation inflation fell further to 6. 1 per cent in may, according to eurostat's flash estimate, from 7. 0 per cent in april. the decline was broad - based. energy price inflation, which had risen in april, resumed its downward trend and was negative in may. food price inflation fell again but remained high at 12. 5 per cent. inflation excluding energy and food declined in may for the second month in a row, to 5. 3 per cent from 5. 6 per cent in april. goods inflation decreased further, to

benoit cœure : exchange of views on the ecb ’ s role in the troika remarks by mr benoit cœure, member of the executive board of the ecb, before the economic and monetary affairs committee, brussels, 13 february 2014. * * * madam chair, honourable members, let me first of all thank you for your invitation to this exchange of views. the adjustment programmes implemented in recent years in several euro area member states were an unprecedented answer to an unprecedented crisis. this crisis has affected the lives of millions of eu citizens – hence it is only natural that you, as their directly elected representatives, assess what has happened. this crisis has revealed major shortcomings, mainly in domestic economic policies, but also in the architecture of emu – thus the european parliament as an institution with a truly european perspective is an appropriate forum to discuss what can be learnt from this experience. it is against this background that i am grateful for the opportunity today to explain the role of the ecb in the troika, to discuss our assessment of the adjustment process in the programme countries and to draw with you some key lessons from the last four years. the ecb ’ s role in the troika let me start by recalling the circumstances under which the troika was set up. when a sovereign debt crisis erupted in spring 2010 in the aftermath of an unprecedented global financial crisis, the euro area was caught unprepared. the maastricht architecture had failed to prevent the build - up of excessive imbalances and unsustainable fiscal positions by a number of countries. europe was then ill - equipped to handle a crisis of such magnitude stemming from these developments. there was no framework for dealing with member states losing market access. there was no governance foreseen for such cases. there was no instrument to provide funding. under these difficult circumstances, the member states decided to grant financial assistance subject to appropriate conditionality as part of an adjustment programme. the eurogroup sought to avail itself of the best available expertise to support it in designing and reviewing these programmes. the imf and the european commission in liaison with the ecb with their complementary experience in crisis management, country surveillance and financial stability were asked to take on this difficult task – this is what we know today as the troika. the particular expertise and euro area focus of the ecb, in other words, the views we have on the systemic consequences of the decisions under discussion, were compelling reasons for