will be uneven across the various euro area countries, aside from the fact that the general government fiscal position is also very different. therefore, retaining the pepp ’ s flexibility is essential to head off problems of financial fragmentation that hinder the transmission of our monetary policy. in addition to the pepp, another instrument that may be recalibrated in the near term are our tltros. this programme provides banks with funding under particularly advantageous conditions, provided that they achieve certain goals in terms of lending to firms and households ( the latter excluding loans for house purchase ). the programme was made more attractive still to banks at the outbreak of the pandemic, allowing them to obtain funding at an interest rate that could temporarily be as low as - 1 %, on the condition that they do not reduce their volume of eligible lending in light of the pandemic crisis. these revised terms and conditions have been a success : in the june tltro iii operation, participating banks received a total of €1. 31 trillion, an all - time high for the eurosystem ’ s refinancing operations. more importantly, the evidence available suggests that banks have indeed used the financing received to lend to the real economy. in conclusion, in the face of a deteriorating outlook for activity and inflation, the ecb governing council must increase monetary accommodation and head off problems of fragmentation in the transmission of monetary policy, primarily through the instruments that have proved most effective during this crisis. the ecb's strategy review in the second part of my address i will take a longer - term perspective and reflect on the changes occurring in the implementation of monetary policy in the advanced economies, which have led the ecb, like other central banks, to review its strategy. in the years prior to the 2007 – 2012 crisis, which in our case coincided with the early years of the ecb, a certain consensus emerged among the advanced economies regarding the role and functioning of central banks. these were designed as independent entities, that is, not subject to direct control by governments, with a clear mandate to ensure price stability, in addition to full employment in some jurisdictions, such as the united states. the price stability mandate is normally expressed as a numerical inflation target, frequently 2 % or, as in the case of the ecb, a rate below, but close to, 2 %. to achieve its price stability target, the central bank adjusts the general level of interest rates on the funding raised – via bank loans

results show a fresh downward revision of real gdp growth expectations from the second quarter, down to 2. 8 % for 2022 and to 1. 5 % for 2023 ( down 0. 8 pp on the previous survey ), followed by 1. 8 % for 2024. i should emphasise, however, that the eurosystem projections are built on the assumptions that the sanctions against russia will remain in place over the full projection horizon, that the intense phase of the war will continue until the end of the year with no further escalation, that disruptions to energy supplies will not lead to rationing in euro area countries, and that supply bottlenecks will gradually be resolved by the end of 2023. the reduction owed to the fall in both the services sector component ( down 2. 4 points to 50. 6, a 15 - month low ) and the manufacturing pmi ( down 3. 2 points to 46. 1, the second consecutive month in contraction ). however, a prolongation of the war in ukraine remains a significant downside risk for growth, particularly if energy supplies from russia are suspended and result in rationing for firms and households. likewise, the war could also further dampen confidence and aggravate supply - side constraints, while energy and food prices could remain persistently higher than expected. a faster deceleration in global growth would also pose a risk to the euro area outlook. indeed, given the high uncertainty surrounding the outlook, the june projections are complemented by a downside scenario that reflects the possibility of a severe disruption to european energy supplies, leading to further increases in energy prices and production cuts. under this scenario real gdp grows by only 1. 3 % in 2022, contracts by 1. 7 % in 2023 and, despite recovering in 2024 when it grows by 3 %, remains significantly below the baseline level throughout the projection horizon. the inflationary episode since mid - 2021 we have witnessed a global inflationary episode that has proved more persistent than initially expected. this inflation has intensified in recent months as a result of the war in ukraine, and has spread to numerous components of the consumption basket. in june euro area inflation rose again, reaching 8. 6 %. this is the highest figure for the euro area overall since the launch of the euro and up from 1. 9 % just one year earlier. the energy component remains the main factor behind this increase. however, food inflation also continued to rise, standing at 8.