inflation to levels that are below, but close to, 2 % over the medium term. regarding fiscal policies, an ambitious and coordinated fiscal stance remains critical, in view of the sharp contraction in the euro area economy. measures taken in response to the pandemic emergency should as much as possible be targeted and temporary in nature. the three safety nets endorsed by the european council for workers, businesses and sovereigns, amounting to a package worth €540 billion, provide important funding support in this context. at the same time, the governing council urges further strong and timely efforts to prepare and support the recovery. we therefore strongly welcome the european commission ’ s next generation eu proposal, which is dedicated to supporting the regions and sectors hardest hit by the pandemic, to strengthening the single market and to building a lasting and prosperous recovery. it is important for the european leaders to quickly agree on an ambitious package. in order to reach its full potential, the european union ’ s recovery and resilience facility will need to be firmly rooted in sound structural policies conceived and implemented at the national level. well - designed structural policies could contribute to a faster, stronger and more uniform recovery from the crisis, thereby supporting the effectiveness of monetary policy in the euro area. targeted structural policies are particularly important to rejuvenate our economies, with a focus on accelerating investment in priority areas such as the green and digital transitions. we are now ready to take your questions. 3 / 3 bis central bankers'speeches

preserve a smooth and efficient transmission of our monetary policy to the real economy. counterparties will be entitled to borrow up to 30 % of the stock of eligible loans as at 28 february 2019 at a rate indexed to the interest rate on the main refinancing operations over the life of each operation, with further details on the precise terms of the new operations to be communicated in due course. finally, we extended the fixed rate tender procedure with full allotment. this means that we will continue to provide banks with a liquidity backstop against sufficient and adequate collateral. these measures give us renewed confidence that growth will return to its potential level, supporting the continued convergence of inflation towards our aim. concluding remarks our monetary policy is bearing fruit, and we remain confident that the labour cost pressures that have strengthened and broadened amid high levels of capacity utilisation and tightening labour markets will continue to support underlying inflation over the medium term. the process of inflation convergence takes time. while the sluggishness of the transmission mechanism can in part be attributed to the persistence of uncertainties related to geopolitical factors and the threat 4 / 5 bis central bankers'speeches of protectionism that still cloud the euro area economic outlook, persistent, patient and prudent monetary policy creates the conditions for the fundamental economic relationships to prevail and for inflation to converge to our aim in a sustainable manner. in any case, we stand ready to adjust all of our instruments, as appropriate, to ensure sustained inflation convergence towards levels below, but close to, 2 % over the medium term. all our instruments remain available following the return to rate forward guidance as our main policy tool. the activation of any existing or new instruments always depends on our assessment of the risks to price stability and our judgement of the effectiveness of those instruments in ensuring the convergence of inflation to levels that are below, but close to, 2 % in the medium term. in march we judged that recalibrating the date - based leg of our rate forward guidance, complemented with the announcement of a new series of tltros, was appropriate to respond to the weaker economic momentum and the related slowdown in the pace of inflation convergence to our aim. monetary policy acts in full independence, but not in isolation. the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are also providing support to economic activity. growth - friendly public finances based on sustainable fiscal plans and a sound composition of taxes and expenditures are essential for macro