operate efficiently without endangering sound fiscal positions in the longer term. moreover, governments are encouraged to push ahead with reforms relating to the size and structure of public expenditure and revenue, which will also create room for tax cuts and absorb the fiscal costs of population ageing. in the field of structural reforms allow me to refer briefly to the adoption of the broad economic policy guidelines. if implemented in a determined manner, structural reforms will contribute to expanding the euro area's potential for non - inflationary growth and to reducing its high level of unemployment. we are now at your disposal for questions.

christine lagarde : introductory statement at ecb press conference introductory statement by ms christine lagarde, president of the european central bank, at a press conference with ecb vice president luis de guindos, frankfurt am main, 3 february 2022. * * * good afternoon, the vice - president and i welcome you to our press conference. the euro area economy is continuing to recover and the labour market is improving further, helped by ample policy support. but growth is likely to remain subdued in the first quarter, as the current pandemic wave is still weighing on economic activity. shortages of materials, equipment and labour continue to hold back output in some industries. high energy costs are hurting incomes and are likely to dampen spending. however, the economy is affected less and less by each wave of the pandemic and the factors restraining production and consumption should gradually ease, allowing the economy to pick up again strongly in the course of the year. inflation has risen sharply in recent months and it has further surprised to the upside in january. this is primarily driven by higher energy costs that are pushing up prices across many sectors, as well as higher food prices. inflation is likely to remain elevated for longer than previously expected, but to decline in the course of this year. the governing council therefore confirmed the decisions taken at its monetary policy meeting last december, as detailed in the press release published at 13 : 45 today. accordingly, we will continue reducing the pace of our asset purchases step by step over the coming quarters, and will end net purchases under the pandemic emergency purchase programme ( pepp ) at the end of march. in view of the current uncertainty, we need more than ever to maintain flexibility and optionality in the conduct of monetary policy. the governing council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation stabilises at its two per cent target over the medium term. i will now outline in more detail how we see the economy and inflation developing, and will then talk about our assessment of financial and monetary conditions. economic activity economic growth weakened to 0. 3 per cent in the final quarter of last year. nevertheless, output reached its pre - pandemic level at the end of 2021. economic activity and demand will likely remain muted in the early part of this year for several reasons. first, containment measures are affecting consumer services, especially travel, tourism, hospitality and entertainment. although infection rates are still very high, the impact of the