have added to this. but even under a very flexible interpretation of our medium - term inflation objective, i am convinced that not acting would have meant failing in our mandate. without our measures, current inflation would be much lower and the inflation outlook would be much worse. moreover, economic activity would be subdued, there would be fewer jobs, and a sound public budget would be more difficult to achieve, even in germany. silently giving up on the commonly agreed inflation objective, which has served the ecb well for the last 13 years, is not an option. this would make our monetary policy less credible and would in itself create instability. we shouldn ’ t return to a policy that constantly redefines monetary policy objectives on the basis of short - term considerations. in a monetary union, the single monetary policy, through its focus on stable prices, acts as the indispensable anchor to a range of economic policy decisions established at national and regional level. this makes keeping a steady hand in monetary policy particularly important. de - anchoring inflation expectations would be a source of instability in its own right. this would be counterproductive at a time when europe is already confronted with so many challenges. bis central bankers ’ speeches this principle of stability needs to prevail over the often one - dimensional and short - sighted criticism of the ecb ’ s measures expressed in various places. in germany, the ecb has recently been repeatedly criticised for hurting savers through the currently very low interest rates. but people are not just savers – they are also employees, taxpayers and borrowers, as such benefiting from the low level of interest rates. thanks to improved economic conditions, stimulated not least by monetary policy, real income and employment in germany have increased in recent years. in other words, we need low interest rates now to ensure a normalisation of economic conditions, including higher returns on savings in the future. the origins of the current worldwide low level of interest rates are not only monetary, however. the euro area, for example, generates excess savings of over 3 % of its gdp. in conjunction with other factors, this export of savings adds at a global level to the downward pressure on interest rates. in other words, low interest rates are a symptom of macroeconomic interdependencies and measures which go well beyond monetary policy. certainly, monetary policy would become more effective if other euro area policy areas did more to generate stable and sustainable growth, embedded in a credible set of rules.

2007, and between 1. 8 % and 2. 8 % in 2008, the same range projected last june. i would like to emphasise, however, that there is considerable uncertainty surrounding the central, or most likely, scenario for future growth and that there are several downside risks. these relate mainly to a potentially broader impact from the ongoing reappraisal of risk in financial markets, global imbalances, protectionist pressures, and further rises in oil and commodity prices. how about the outlook for and the risks to price stability? the medium - term outlook for price stability remains subject to upside risks. these risks relate to further increases in oil prices and prices for agricultural products, stronger than expected wage developments, and a possible increase in the pricing power in some sectors, and the continued vigour of the underlying monetary and credit expansion, despite some stabilisation in the growth of bank credit to the private sector. the current assessment, and confirmation of the previous one, that upside risks to price stability remain has implications for the stance of monetary policy. it implies that on the basis of the expected favourable medium - term outlook for real gdp growth, the monetary policy stance is still on the accommodative side and that the ecb should act in a timely and effective manner to ensure that risks to price stability over the medium term do not materialise. at the same time, given the increase in uncertainty surrounding the economic outlook, it is prudent and appropriate to wait and gather additional information before drawing any firm conclusions for monetary policy. i should note that the uncertainty we face is not only related to the likelihood of some specific risks materialising that could affect the financial and product markets, but it also pertains to the ongoing process of adjustment of the attitudes toward risk of financial institutions and other market participants, which could have a bearing on financing conditions. so, we will monitor very closely all developments and continue to pay great attention to financial markets in the coming period. having said that, i would like to stress that the ecb ’ s monetary policy is firmly geared towards its primary objective of preserving price stability. and especially during a period of increased uncertainty and market volatility, it is important that inflation expectations remain firmly anchored to price stability. iv. the role of the european central bank having presented these reflections concerning the financial market turmoil, the current macroeconomic outlook and our monetary policy stance, allow me to conclude by touching upon some broader considerations regarding the role and policies