latest available data published by the imf in its annual report provide an indication of the share of the euro in worldwide official reserves at the end of 1998, just before its formal introduction. at that time, of the total worldwide official reserves for which a currency breakdown is available ( sdr928 billion ), 17 % were held in the euro legacy currencies, compared with a share of 71 % for the us dollar and 6 % for the yen. 2. factors affecting the future international role of the euro the international role of the euro is likely to evolve gradually in the future. even the us dollar required a very lengthy process to gain its present status, which took several decades and was fully completed only in the 1950s. growing importance of the euro as an international currency could develop differently as emu represents a one - off regime shift and as the emergence of a global financial market could speed up the internationalisation of the euro. a first prerequisite for a significant use of the euro by foreign agents is confidence in the stability of its purchasing power in the long run. this is the primary objective of the eurosystem. in this respect, the value of the euro is based on domestic price stability and on the medium - term orientation of the eurosystem ’ s monetary policy. other factors will also play a role. one important aspect is the possible future enlargement of the euro area. four eu countries have, for different reasons, not yet adopted the euro. without elaborating on that, let me simply state that i am confident that they may join in the coming years. if and when this happens, the economic and financial size of the euro area would be further enhanced, providing new impetus to the international role of the euro. a greater challenge is the potential accession of new countries to the european union. negotiations are currently being conducted with six countries. negotiations with another six candidates will start soon. when joining the eu, the new member states will have to comply with all the requirements set out in the acquis communautaire which relate to economic and monetary union ( emu ). therefore, following their accession to the eu, the new member states will also – in a second step – become members of erm ii and will – in a third step, if and when the maastricht convergence criteria are met – adopt the euro. the accession process entails that, over time, the exchange rate and monetary policies of candidate countries will become

march 2021 ecb staff macroeconomic projections for the euro area, which foresee annual real gdp growth at 4. 0 per cent in 2021, 4. 1 per cent in 2022 and 2. 1 per cent in 2023, broadly unchanged compared with the december 2020 eurosystem staff macroeconomic projections. 1 the risks surrounding the euro area growth outlook over the medium term have become more balanced owing to better prospects for the global economy and progress in vaccination campaigns. however, downside risks remain in the near term, mainly related to the spread of virus mutations and the implications of the ongoing pandemic for economic and financial 1 / 4 bis central bankers'speeches conditions. euro area annual inflation has picked up over recent months, mainly on account of some transitory factors. headline inflation is likely to increase in the coming months, but some volatility is expected throughout 2021 reflecting the changing dynamics of the idiosyncratic factors which are currently pushing inflation up but which can be expected to fade out early next year. underlying price pressures are expected to increase somewhat this year due to current supply constraints and the recovery in domestic demand. nevertheless, we judge that these pressures will remain subdued overall, also reflecting low wage dynamics and the past appreciation of the euro. once the impact of the pandemic fades, the unwinding of the high level of slack, supported by accommodative fiscal and monetary policies, will contribute to a gradual increase in inflation over the medium term. survey - based measures and market - based indicators of longer - term inflation expectations remain at subdued levels. while our latest staff projection exercise foresees a gradual increase in underlying inflation pressures, the medium - term inflation outlook – with projected annual inflation at 1. 5 per cent in 2021, 1. 2 per cent in 2022 and 1. 4 per cent in 2023 – remains broadly unchanged from the staff projections in december 2020 and below our inflation aim. the ecb ’ s monetary policy stance and effectiveness against this background, preserving favourable financing conditions over the pandemic period remains essential to reduce uncertainty and bolster confidence, thereby underpinning economic activity and safeguarding medium - term price stability. let me further elaborate on our assessment of financing conditions. this is defined by a holistic and multifaceted set of indicators. it is holistic because we consider a broad array of indicators, spanning the entire transmission chain of monetary policy from risk - free interest rates and sovereign bond yields to corporate bond yields