mario draghi : hearing before the plenary of the european parliament on the occasion of the adoption of the resolution on the ecb annual report 2012 introductory statement by mr mario draghi, president of the european central bank, at a hearing before the plenary of the european parliament on the occasion of the adoption of the resolution on the ecb annual report 2012, strasbourg, 12 december 2013. * * * president, honourable members of the european parliament, i am very pleased to take part in this debate on the ecb annual report 2012. today is the last time in this legislature that i participate in the plenary. this represents a good opportunity to take stock of the progress made over the past few years in strengthening the resilience and stability of the euro area. to introduce the debate, i would first like to review the more recent ecb ’ s monetary policy decisions. i will then address institutional matters of particular interest to your house as well as the progress made so far in reinforcing emu governance. i will thereby address most of the issues which the econ committee highlighted in its draft resolution on the ecb annual report. ecb ’ s monetary policy let me begin by describing the economic environment of the past years. the economic recovery that followed the post - lehman global recession of 2008 – 09 was aborted in the euro area as the sovereign debt crisis took hold. financial stability was threatened ; the viability of banks that had survived the first phase of the crisis was called into question. credit was curtailed and the recession that ensued has lasted until the first quarter of this year. since then, we have been experiencing a weak recovery. weak economic activity and high unemployment have resulted in a subdued inflation. against this backdrop, and in respect of our price stability mandate that was assigned to us by the treaty, we have lowered our key interest rates to historically low levels. to clarify the orientation of our monetary policy going forward in an exceptionally uncertain environment, we introduced forward guidance in july 2013 : we stated that we expected key interest rates to remain at present or lower levels for an extended period of time. that statement was conditional and based on an overall subdued outlook for inflation extending into the medium term, given the broad - based weakness in the real economy and subdued monetary dynamics. in november we acted upon that conditional pledge by reducing two of our key interest rates, as price pressures have diminished further and we anticipate inflation weakness to be protracted. in keeping with these anticipations,

##s, households and the government. economic growth in serbia is also supported by net foreign direct investments which came at eur 1. 8 billion, rising by 45. 6 % from a year earlier. the fact that, today, investments in serbia are channeled into a large number of projects, and that they originate from a larger number of countries, indicates that companies which decided to invest in serbia are sure that they have made a good business move. and here, we must not forget to mention domestic investors which we consider equally important and valuable. bis central bankers ’ speeches by achieving successful coordination of monetary and fiscal policies, while ensuring a clear division of powers among different institutions, we have strengthened our credibility with all relevant entities considering the prospect of investing in serbia. if i were to summarize the results achieved by our institution with regard to the overall investment climate in just one sentence, i would point out : low inflation rate, record low interest rates, anchored inflation expectations, relatively stable exchange rate, stable and resilient financial system, higher investment loans, increased confidence in the dinar coupled with higher household borrowing and savings in the local currency. that we are not the only ones who say this is confirmed by data and the assessment of credit agencies and relevant international institutions. we have also enjoyed excellent cooperation with the international monetary fund, providing maximum contribution to positive signals coming from that important institution, the arrangements with which lend major support to our economic stability. in particular, the national bank of serbia strongly supports the commitment of the serbian government to european integrations and has taken direct part in this process, not only through negotiations, but also through a series of other activities aimed at harmonizing regulations and creating a better and safer investment environment, following the lead of countries such as france. we are proud to say that all of the above has been achieved by relying on our own resources, bravely facing all challenges coming from the international environment and global financial flows. i therefore hope we will continue to enjoy your understanding and support, and will fully reciprocate it, to our mutual satisfaction. finally, allow me to add a few facts regarding french - serbian economic and cultural cooperation. the national bank of serbia has had intense cooperation with the bank of france, but also with the french agency for prudential supervision of financial institutions. the bank of france took part in the technical assistance project for strengthening the institutional capacities of the national bank of serbia, thereby continuing, in the best possible way, the cooperation