“ quantum leap ”, the radical improvement that i would like. europe, as an historic construction, has often been able to make radical progress during times of difficulty and crisis. the governing council of the ecb is ready – within the scope of its responsibilities – to help europe to make essential, new progress. this supposes of course that each of the european partners takes all its responsibilities which are, today, fully of a historic nature. would you like to be able to inspect member states ’ budgets prior to their adoption by national parliaments as the commission proposes to do? each institution has its own responsibilities. the ecb is very closely involved in the work of the commission and the eurogroup. i support the commission ’ s proposal, which i consider to be perfectly aligned with the goal of improving governance in the euro area. i have noticed some negative reactions, in particular in france, and i don ’ t understand this, especially in a country that has a tradition of favouring a strong “ economic governance ”. can non - democratically elected bodies grant themselves a supranational inspection right? the governments of the eurogroup all stem from a democratic process! they are the ones who, following any clarifications from the commission – and where necessary from the ecb – take the decisions. economic and monetary union includes a very close supervision and, when necessary, injunctions and sanctions imposed collectively by the governments participating in the union. we are interdependent, which means that bad management on the part of a single member leads to problems for all of the others. austerity plans are multiplying in europe but certain economists are warning against an overzealousness that could jeopardise growth. what is your view on this? when a household systematically spends more than it earns, so that its debt rises exponentially, its situation is clearly untenable. correcting this situation demonstrates both wise and sound judgment. it is also wise and sound judgment for a country to return to a sustainable fiscal situation in the medium term. there is a semantic issue here. what you call austerity plans i call plans for a progressive return to a sound fiscal situation. in any case these wise policies are favourable to growth since they increase the confidence of households, businesses and investors. today this confidence is – as i have said – essential for the recovery. the oecd has just raised its growth estimates for 2010 and 2011. do you share this view

expansion are clearly on the downside. in particular, heightened geopolitical tensions could dampen business and consumer confidence. risks of insufficient structural reforms could weigh on the business environment. from a high of 3. 0 % toward the end of 2011, inflation in the euro area has been on a downward path for a considerable period of time. in august, inflation was estimated to have reached a low of 0. 3 % but has been revised later to 0. 4 %. we expect inflation to remain at low levels over the coming months, before increasing gradually during 2015 and 2016. given the prolonged period of low inflation that we have already experienced, we will closely monitor risks to price developments looking forward. we will focus in particular on the bis central bankers ’ speeches possible repercussions of dampened growth dynamics, geopolitical developments, exchange rate developments and the pass - through of our monetary policy measures. tltros, the september measures, and the transmission mechanism before turning to our latest monetary policy decisions, let me stress that the ecb has done a lot over the past three years to safeguard price stability. we successfully fought the confidence crisis in the euro that raised interest rates to abnormal levels. we provided the euro area banking system with unprecedented funding. we have continuously lowered our policy rates. yet, against the backdrop of a persistently weak inflation outlook, a slowing growth momentum, and subdued monetary and credit dynamics, we decided in early september to adopt a number of additional monetary policy initiatives which will complete and complement the measures already announced in june. first, we lowered the key ecb interest rates by 10 basis points to their effective lower bound. the main refinancing rate now stands at 0. 05 %, and the deposit facility rate at – 0. 20 %. second, we announced further measures to enhance the functioning of monetary policy transmission, support lending to the real economy and provide further monetary accommodation given that we have now reached the lower bound. restoring a functioning transmission, notably in bank lending, is instrumental in ensuring that the monetary policy stimulus that has been introduced reaches the final borrowers and thereby supports real incomes, spending and price formation. following this announcement, under our abs purchase programme ( abspp ) we will soon start purchasing simple and transparent securities with underlying assets consisting of claims against the euro area non - financial private sector. we will also start purchasing covered bonds issued by euro area mfis under a new covered bond purchase programme ( cbpp3 ). these measures