done in a manner that is consistent and stable over time and homogeneous across countries. the procedures must not be vulnerable to political cycles, as stated by the ecofin council. countries should consider the quality and integrity of their statistics as a matter of priority. 2. the need for structural reform in the euro area let me now turn to the lisbon agenda. the european council intended to reinforce the process of structural reforms as from 2000 onwards. however, almost five years later, the european programme to become “ the most competitive and dynamic knowledge - based economy in the world [.. ] by 2010 ” has not been implemented as promised. in this regard, the recent report by the high level group chaired by wim kok, which provides an independent assessment of the lisbon strategy and contributes to next year ’ s mid - term review of the strategy, expresses an urgent call for renewed impetus. it proposes a stronger commitment of national governments and a sharpening of the lisbon strategy ’ s focus by placing particular emphasis on the acceleration of employment and productivity growth “ via a wide range of reform policies as well as a wider macroeconomic framework as supportive as possible of growth, demand and employment. ” the ecb welcomes the conclusions of the high level group as well as the subsequent ecofin reaction, which is also supportive. concerning the role of macroeconomic policies in fostering the success of the lisbon process, i would like to stress that an independent monetary policy aimed at delivering price stability and being credible in that delivery over the medium and long term, together with a fiscal policy in compliance with the stability and growth pact to maintain fiscal sustainability, are the best contributions that macroeconomic policies can make to facilitate the implementation of reforms. price stability is a necessary condition for being effective in fostering sustainable growth as well as of supporting employment and social cohesion, thus supporting the lisbon objectives which, in turn, are another necessary condition for enhancing growth and job creation. consequently, as was concluded by the ecofin council in its first reaction to the kok report, the macroeconomic framework needs to be supportive of stability and growth. as for increasing the incentives to implement reforms, the ecb has in the past pointed to the supportive role of a more transparent and effective benchmarking based on sensibly defined quantitative indicators. apart from creating peer pressure and accountability on the side of policymakers, benchmarking can be a crucial driver of public discussion in the eu, raising public awareness about the benefits all european citizens could derive in

remains robust. in this context, euro area exports should continue to benefit from favourable global demand conditions. on the domestic side, investment should be supported by the global environment, the very favourable financing conditions in the euro area, solid profits and greater corporate efficiency gained through business restructuring. finally, there is scope for private consumption to strengthen, in particular if uncertainties surrounding the extent and pace of the implementation of structural reforms are reduced. the outlook for economic activity, both globally and domestically, continues to be surrounded by uncertainties, in particular as a result of present and possible future developments in oil markets which can dampen the strength of the recovery both inside and outside the euro area. in any event, it is important that second - round effects in wage and price - setting be avoided. in addition, it would be essential to refrain from taking measures which would prolong the necessary adjustment process. finally, monetary policy must remain firmly committed to the objective of maintaining price stability over the medium term. over recent months, oil price developments have also had a significant impact on consumer price inflation. in november, annual hicp inflation was estimated by eurostat to have been 2. 2 %, after 2. 4 % in october. in addition, increases in indirect taxes and administered prices earlier this year have had a notable effect on consumer prices. looking ahead, inflation rates are likely to remain above 2 % for the coming months, but should moderate thereafter in the absence of additional upward shocks. the information available does not suggest that stronger underlying inflationary pressures are building up in the euro area. wage increases have remained moderate over recent quarters. in the context of moderate economic growth, this trend should continue in the future. there are a number of upward risks to price stability. such risks are mainly associated with oil price developments, uncertainty regarding future increases in indirect taxes and administrative prices, and potential second - round effects stemming from wage and price - setting behaviour. in this respect, it is essential that long - term inflation expectations remain solidly anchored to our definition of price stability and are not affected by current upward movements in hicp inflation. our monetary analysis also calls for vigilance regarding upside risks to price stability over the medium term. the shorter - term dynamics of m3 growth have strengthened over recent months. this seems very much related to the low level of interest rates in the euro area. this very low level of interest rates also fuels private sector demand for credit. in particular, the demand for loans for house purchases is strong