fallen too. but apart from a short, temporary blip at the end of 2016, the gap between market - based medium - term inflation expectations in the united states and the euro area is the widest it has been for more than four and a half years. this suggests that idiosyncratic factors are at work too. i would argue, though, that this is unlikely to be related to concerns about the ecb ’ s credibility. a breakdown of inflation - linked swap rates into expected inflation and an inflation risk premium suggests that medium - term inflation expectations have remained close to levels consistent with price stability. you can see this on the left - hand side of my last slide. this is in line with our reading of survey - based inflation expectations. 11 / 14 bis central bankers'speeches rather, the marked fall in the inflation risk premium suggests that investors assign only a small probability to inflation turning out to be higher than expected. again, this is a global phenomenon but in my view it is also linked to the unique institutional architecture that sets the euro area apart from other constituencies. 11 it relates to the question of how monetary and fiscal policies can optimally interact and reinforce each other in an environment in which policy space is significantly smaller today than it was before the crisis. our response to such concerns should not be to challenge our institutional arrangements. it should not be about blurring the lines between monetary and fiscal policies. central bank independence, which has clear and indisputable benefits, is a public good that needs protection. instead, our response should be about strengthening complementarities. ecb research shows that, during the early stages of the latest recovery, monetary policy was the dominant driver of growth. you can see this on the right - hand side. other policies subtracted from growth. this has changed more recently. the euro area aggregate fiscal stance will be slightly expansionary in 2019, and will thereby support monetary policy. but to do it in a sustainable way, it needs to be adequately distributed : while countries that have fiscal space should use it, in countries where government debt is high, rebuilding fiscal buffers is the best contribution to support the single monetary policy. and while not all countries have the space to spend more, all have the opportunity to spend better. 12 12 / 14 bis central bankers'speeches if fiscal policy preferences contribute to disinflationary concerns – for example, by holding back public investments in education, future technologies and research and development – then they directly counter

our central bank services, for example by supporting eu debt securities issuance to fund the next generation eu programme. 4 however, the future of eu capital markets hinges on the broader regulatory environment which is in your hands. deeper, more integrated eu capital markets are essential for enhancing risk - sharing and mobilising the private financing needed for the green and digital transitions. by the same token, we must not overlook the crucial work remaining for the completion of the banking union – an issue highlighted in your draft resolution and on which this parliament has been vocal in pushing for progress. 3 / 5 bis - central bankers'speeches second, the reform of the eu economic governance framework needs to move forward. the ecb has highlighted the importance of a simpler and more predictable framework, stronger national ownership and sustained implementation. 5 i encourage eu policymakers, including this parliament, to rapidly reach a viable and broadly shared agreement that strengthens the foundations of our economic and monetary union. third, an appropriate regulatory framework for the digital euro needs to be laid down. the digital euro project is a truly european initiative which is moving ahead at a steady pace. in the autumn, the ecb's investigation phase will come to an end and the governing council will decide on the next steps. but let me be clear : that does not mean that we will then issue a digital euro. that would only happen at a later stage, based on a dedicated decision, and only after the parliament and the council of the eu have adopted the legislative act. all eu policymakers should continue playing their part, and i am counting on this parliament to swiftly start working on the legislative proposal which the european commission intends to publish in a few months. conclusion let me now conclude. we are committed to bringing inflation back to our 2 % medium - term target, in line with our mandate, and we will take the necessary measures to do so. but as thomas jefferson once wrote, " the price of freedom is eternal vigilance ". in a democratic society, central bank independence can only be legitimate if it is founded on a clear mandate and balanced with accountability to ensure that the central bank follows its mandate. this also means that forceful efforts to ensure price stability need to be accompanied by equally forceful democratic scrutiny. in this spirit, we will continue our ongoing dialogue with you as the representatives of eu citizens. as also advocated in your draft resolution, the ecb stands ready to agree on a formalisation, in writing, of the current accountability practices between