expected to remain at very low or negative levels in the early months of 2015. this heightens the risk of second - round effects on wages and prices that could have an adverse impact on inflation expectations in the medium term. indeed, the latest private sector forecasts have seen substantial downward revisions for all terms. thus, for example, according to the january edition of consensus forecasts, the leading private sector economic forecast publication, the average rate of inflation forecast for 2015 is just 0. 1 %, compared with 0. 6 % forecast for the same period a month earlier. in a macroeconomic context of weak demand, these rates, so far from 2 %, not only endanger the current anchoring of medium - term inflation expectations, but also heighten the risks to price stability and hamper the economic recovery of the area as a whole. economic recovery is even more difficult for countries that are in the process of correcting imbalances that built up in the past, and in particular for those, such as spain, that have suffered competitiveness losses and need their prices and costs to fall relative to the euro area as a whole. to address these risks the ecb has in recent months taken further measures to make its highly expansionary monetary policy even more expansionary. bis central bankers ’ speeches as regards standard measures, the ecb has reduced the interest rate on its main refinancing operations to 0. 05 %, which is technically the lower bound for this rate. also, the interest rate on the deposit facility, which is the rate at which the cash surpluses that credit institutions hold in their eurosystem accounts are remunerated, stands at negative levels ( – 0. 20 % ), which discourages the accumulation of such balances and stimulates lending. recent actions also include non - standard measures : a new long - term financing facility specifically aimed at promoting greater lending to the private sector ; and two asset purchase programmes, one for asset - backed securities and the other for different types of covered bonds. finally, on 22 january, the ecb announced new monetary stimulus measures. the interest rate applicable to the long - term financing facility, which aims to stimulate lending, was reduced and an expanded asset purchase programme was announced. this programme includes, in addition to the purchases of asset - backed securities and covered bonds issued by the private sector, purchases of bonds issued by euro area central governments, agencies and european institutions. the size of this expanded programme is ambitious, with monthly

turning to budgetary policy, lowering the deficit is absolutely necessary given the stance of the markets, whose distrust of the sovereign debt of the euro area countries has been increasing in recent weeks. admittedly, tough decisions have already been taken in spain, such as the reform of pensions, which have served to reduce the deficit not only in the short run, but also in the medium and long term. however, there is still a long way to go merely to comply in 2012 with the 4. 4 % budget deficit commitment, whatever the final figure for 2011. finally, some very significant progress has been made in spain in recent years in financial restructuring. the banking system has written off bad debts ( equivalent to more than 10 % of gdp in the last three - and - a - half years ), the average size of banks has increased, capacity has been reduced and a process is under way to transform the savings bank sector, which will help these institutions to meet the new prudential regulation requirements and strengthen their ability to fund themselves on the markets. yet, as i said in september when presenting the results of the recapitalisation required by the royal decree law passed early this year, the restructuring process cannot be considered to have been completed. in fact, insofar as the economic forecasts for 2012 have in recent weeks been revised drastically downwards and funding problems on wholesale markets have worsened for all european banks, the pressure bis central bankers ’ speeches on our credit institutions has intensified and therefore the need for adjustment and financial restructuring not only remains but has actually increased. during economic upturns the major danger is complacency, which leads one to think that reforms are not necessary because everything ( growth, employment, government revenues ) is going well. during crises however, the great danger is reform fatigue, tiring of reforms that have no visible effects in the short term. for this reason, we must not only press ahead with financial restructuring, but must also be open to the possibility of taking further action when this is considered necessary. that said, irrespective of the instruments that may soon be adopted, both the objective and the main criteria that have been followed in recent years should, in my opinion, be maintained. the objective is clear and leaves little room for discussion : to have solid institutions that are able to contribute effectively to the financing of households and businesses. and it would also be useful to preserve the main criteria used hitherto in the financial restructuring. specifically, i am referring