##ldkircher, 2015 ; feldkircher and schuberth, 2020 ) by positively influencing the output of trading partners as well. some authors also find that output spillovers are relatively stronger than price spillovers when compared to the relative strength of output versus price effects in the euro area itself ( benecka et al., 2018 ; moder, 2019 ). these effects are transmitted through different channels : via demand, exchange rates and financial linkages ( feldkircher et al., 2020 ). a thorough understanding of such spillover effects is thus crucial for the design of appropriate domestic monetary, and also macroprudential, policies which should ideally allow economies to reap the benefits of strong economic and financial integration with the euro area, while mitigating the associated risks. i am looking forward to discussing these issues with my esteemed colleagues later on in panel 1. 3. the role of eu funds third, let me turn to the role of eu funds. as an immediate response, eu authorities provided emergency support financing and eased certain requirements, such as national co - financing requirements, to tap available cohesion and structural funds from this year ’ s eu budget. in parallel, flexibility clauses in the fiscal framework were activated and state aid rules temporarily adjusted. as a next step, the european parliament and the council agreed on the eur 100 billion sure instrument proposed by the european commission. sure stands for “ support to mitigate unemployment risks in an emergency. ” based on eu budget capital market borrowing, the sure instrument will provide loans to individual member states to support short - time work schemes and help member states protect jobs and thus employees and self - employed against the risk of unemployment. the first bond issuance for this program was substantially oversubscribed and can be considered a success. the council has already approved financial support under sure to several member states. romania, for example, will receive eur 4 billion, and poland will receive eur 11 billion. pursuant to the invitation by the european council and with a view to supporting a common broad - based recovery within the eu, the european commission complemented its previous budgetary proposals for the next multiannual financial framework ( mff ) for the period from 2021 to 2027 with a “ recovery package ” at the end of may. according to the council, the funds under this european union recovery instrument referred to as “ next generation eu ” ( ngeu ) are page 4 von 8 designed to be committed over the period from

the continuing impact of our past monetary policy tightening on consumer prices should help this process. while market - based indicators of inflation compensation have largely reversed the declines observed in the autumn, most measures of longer - term inflation expectations continue to stand at around 2 per cent. risk assessment the risks to economic growth remain tilted to the downside. greater friction in global trade could weigh on euro area growth by dampening exports and weakening the global economy. lower confidence could prevent consumption and investment from recovering as fast as expected. this could be amplified by geopolitical risks, such as russia's unjustified war against ukraine and the tragic conflict in the middle east, which 2 / 4 bis - central bankers'speeches could disrupt energy supplies and further weigh on global trade. growth could also be lower if the lagged effects of monetary policy tightening last longer than expected. it could be higher if easier financing conditions and falling inflation allow domestic consumption and investment to rebound faster. inflation could turn out higher if wages or profits increase by more than expected. upside risks to inflation also stem from the heightened geopolitical tensions, which could push energy prices and freight costs higher in the near term and disrupt global trade. moreover, extreme weather events, and the unfolding climate crisis more broadly, could drive up food prices by more than expected. by contrast, inflation may surprise on the downside if low confidence and concerns about geopolitical events prevent consumption and investment from recovering as fast as expected, if monetary policy dampens demand by more than expected, or if the economic environment in the rest of the world worsens unexpectedly. greater friction in global trade would make the euro area inflation outlook more uncertain. financial and monetary conditions market interest rates in the euro area have risen since our december meeting, partly mirroring higher rates in global financial markets. while financing conditions remain tight, our interest rate cuts are gradually making it less expensive for firms and households to borrow. the average interest rate on new loans to firms declined to 4. 5 per cent in november, while the cost of issuing market - based debt remained at 3. 6 per cent. the average rate on new mortgages edged down to 3. 5 per cent. growth in bank lending to firms rose to 1. 5 per cent in december, up from 1. 0 per cent in november, amid a strong monthly flow. growth in debt securities issued by firms moderated to 3. 2 per cent in annual terms. mortgage lending continued to rise gradually but remained muted overall,