european central bank : press conference - introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, at the press conference following the meeting of the ecb governing council, madrid, 8 june 2006. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to the press conference here in madrid. i would particularly like to thank governor caruana for his kind hospitality and express our special gratitude to the staff of the banco de espana for their excellent organisation. let me now report on the outcome of today ’ s meeting, which was also attended by the president of the eurogroup, prime minister juncker, and commissioner almunia. at today ’ s meeting, we decided to increase the key ecb interest rates by 25 basis points. this decision reflects the upside risks to price stability over the medium term that have been identified through both our economic and monetary analyses. the further withdrawal of monetary accommodation will thus contribute to ensuring that longer - term inflation expectations in the euro area remain solidly anchored at levels consistent with price stability. as stressed on previous occasions, such anchoring is a prerequisite for monetary policy to make an ongoing contribution towards supporting economic growth and job creation in the euro area. overall, also after today ’ s increase, the key ecb interest rates are still low by historical standards, liquidity is ample and our monetary policy remains accommodative. given the outlook for price developments and the dynamism of money and credit growth in the euro area, we will continue to monitor closely all developments to ensure price stability over the medium and longer term. allow me to explain our assessment in greater detail, starting with the economic analysis. all the main indicators of economic activity that have recently become available are positive. according to eurostat ’ s first estimate, on a quarter - on - quarter basis, real gdp grew by 0. 6 % in the euro area in the first quarter of 2006, compared with 0. 3 % in the previous quarter, with domestic demand making a significant contribution. the expected re - acceleration of real gdp growth in the first months of 2006 has thus materialised, confirming our view that economic growth is broadening and becoming more sustained. this assessment is further supported by information on activity in the second quarter – such as various confidence surveys and indicator - based estimates – which continues to be encouraging. looking further ahead, the conditions are in place for growth in the euro area to remain close

asset price misalignment, which may need to be addressed by policy. in addition, financial market indicators have the potential to reflect developments at critical stages of the transmission process. this is due to the fact that financial markets in general adjust faster than goods markets, and their prices are timelier and less prone to measurement error. today ’ s workshop will give us the chance to discuss these and many other issues. i am that sure my colleagues around the table would like to share their practical experiences so that we could have a better understanding of the financial market indicators suitable for emerging markets and how we as policy makers can best make use of them. let me now pass the chair to mr. eli remolona, head of economics for asia and pacific, bis.