collateral framework in order to provide the banking sector with appropriate liquidity. our balance sheet has grown by approximately 55 % over the last 12 months. at the same time, we have to permanently ensure that our risk management is improved to take into account the increased volume of risks. question : the financial sector has been largely safeguarded through guarantees and equity capital aid. now the car industry is asking for state support. is this not understandable? answer : the decision on this falls first of all under the responsibility of the national governments and parliaments. as a central bank, we have emphasised the fact that the financial sector is of systemic importance because it affects all other sectors, all enterprises and their employees. question : knowing what we do now, was the interest rate increase in july this year a mistake? and why is it generally so difficult for central bankers to admit to mistakes? answer : the modest interest rate increase in july was important taking into account the inflationary threats that were visible at the time. question : what were those threats? answer : long - term inflation expectations threatened to become unanchored. in addition, wage and salary demands in some euro area countries caused us serious concern that there could be broad - based second - round effects. the interest rate decision enabled us to bring medium to long - term inflation expectations back under control in line with our definition of price stability. and this regained control of expectations was, by the way, the precondition which allowed us to cut rates strongly from october when the crisis worsened. do not forget : our definition of price stability in the medium term is “ less than, but close to, 2 % ”. the interest rate increase in july must be related to the “ less than 2 % ” part. our recent decrease of rates after the intensification of the crisis in september must be related to “ close to 2 % ”. question : since then rates have been cut drastically around the world. the us central bank, the federal reserve ( fed ), has now de facto cut rates to zero. the conventional weapons of monetary policy are fast being exhausted. what unorthodox options does the ecb have at its disposal? answer : first, let me remind you that we have, in all circumstances, to deliver price stability in line with our definition “ less than, but close to, 2 % ”. question : and second? answer : second, the present unlimited provision of liquidity at a fixed rate and with a oneweek

, one - month, three - month and six - month duration can certainly be described as an unusual measure. the extension of eligibility in our collateral framework is also an exceptional measure, particularly as it was already very broad and flexible. we have also expanded our balance sheet on a scale that would have been unthinkable before the crisis : around 55 % in the last 12 months. question : the ecb expects that the economy will gradually start to recover again in 2010. where are the impulses for growth likely to come from? answer : the growth and inflation projections you mention come from the staff of the eurosystem central banks. they are not the forecasts of the governing council of the ecb. we look closely at these projections, but we also consider other forecasts, such as those from the private sector. question : and what conclusion do you arrive at? answer : taking into account the staff projections, we believe that the risks to growth in the euro area are on the downside. that being said, we are in an environment of great uncertainty and we must treat new data and figures with the greatest humility. but we also have to take into account the fact that some developments, such as the drastic reduction in the price of oil and other commodities, are simultaneously disinflationary and expansionary. question : why is the governing council of the ecb so reluctant to give indications regarding the interest rate decision in january? answer : as i said at the last press conference when reporting on the position of the governing council, we are concentrating at present on the impact of our previous decisions. we have already cut rates by 175 basis points within a very short span of time. this impulse is, at the moment, far from having been fully transmitted to the economy. that being said, as i always stress, we are never pre - committed and we always do what is necessary to solidly anchor inflationary expectations in the medium term.