take up loans. it is hoped that this investment and consumption will stimulate the economy. this should restore the inflation rate to close to 2 %. there are doubts among the general public in germany about whether the benefits of the purchase programmes outweigh the costs. the criticism is often made that, unlike for our interest rate instrument, there are no reliable empirical data on the effect of the purchases. the benefit of quantitative easing is called into question. in fact, we can identify the first positive effects on financing conditions in the euro area. however, there is uncertainty about how large the effects actually are. it is also pointed out that the potential benefits are also accompanied by risks. because there is no historical comparison for the effects of such a broad programme in the euro area, these risks are, in part, difficult to assess and almost impossible to quantify. the already mentioned side - effects of the low interest rate policy – wrong incentives for governments, financial market stability and distribution effects – are even more acute in the case of quantitative easing. further monetary policy easing? ladies and gentlemen, let me briefly summarise what has been said so far : i have explained to you why i consider the low interest rate policy to be necessary and the risks it creates for financial market stability and the sustainability of fiscal policy. one thing, however, is crucial : there are limits to expansive monetary policy. it buys time, but does not heal the structural causes of the sluggish economic recovery in the euro area and the persistently weak inflation trend. like any medicine, the beneficial effects of monetary policy measures decline with continued use, while the undesirable side - effects increase. and over - use can lead to the result that the patient feels well and no longer works on the causes of the illness. in that case, longterm harm cannot be ruled out. even though less than a year has passed since the decision to launch the quantitative easing programme, new measures are being considered, such as the expansion of the programme. although certain successes of the programme are visible in the financial markets ( for example, in the form of lower interest rates for long - term borrowing ) the hopes of a rapid normalisation of medium - term inflation expectations have not yet been fulfilled. bis central bankers ’ speeches however, this raises two questions. are the inflation and economic outlooks so bad that new measures are needed? and how effective can further monetary policy measures be, in particular an expansion of the programme, in the current

agreement last friday on unconditional esm [ european stability mechanism ] credit lines to finance health expenditure. page 6 sur 10 let us now look to the future. and do so together : the german federal president warned last month, “ germany cannot emerge from the crisis strong and healthy if [ its ] neighbours do not also become strong and healthy ” i. of course the same applies to, say, the netherlands or austria : selfishness today could come at a high price tomorrow. and let me stress the utmost importance of chancellor merkel ’ s words precisely just yesterday : “ this will encourage us to do more in the area of economic policy, in order to further integration of the euro area. we will address this issue in connection with what we call the recovery fund for europe ”. a. our common goals : recovery and repair 1 / supporting growth in the recovery phase is a shared objective for all of us in europe. there is indeed no magic bullet, and – at the end of the day – the debt inherited from the crisis will need to be financed through growth and through our work. as pointed out by my colleague and friend governor ignazio visco, “ adequate investment in education is [ … ] needed to face the uncertainty that surrounds the jobs and the skills that will matter in the future ” ii. yet, in the face of such enormous upheaval such as the covid - crisis, investment at the national level will inevitably reach its limit. facing the deep european investment and growth gap, we need to implement major european investment programmes to bridge that gap while tackling common structural priorities such as the fight against climate change which must absolutely not become a collateral victim of the crisis, or digitalisation which will be even more than before the key driver of future productivity. 2 / preserving the single market while “ repairing ” firms is our second common goal in the recovery phase. national governments did well in the acute phase, by taking emergency measures such as providing guarantees and liquidity support to their smes. but, as these measures will have to be prolonged and transformed into long - term solvency measures, national differences could create an “ unlevel playing field “. a single market – which is in the interest of all member states, starting with germany – means common rules for corporates : page 7 sur 10 if not, our economies risk further divergence and that would be very unfortunate. the solvency of european business is our shared challenge, and calls for shared solutions. focusing