opinion? “ i think it is important that we have a progressive improvement in the global governance. the g20 should be given credit for being the place where global governance could be effective. the g20 is called to be essential, appropriately enlightened by the imf, because we need to have both as good analytical presentations and diagnosis and the peer pressure of the g20. the g20 has to address the issues of the domestic large imbalances between savings and investments, and of the set of unsustainable external imbalances. we know that these imbalances have been at the roots of the present difficulties. if we don ’ t correct them, we ’ ll have the recipe for the next major crisis. and this of course would be totally unacceptable. ” could it be dangerous for the recovery, if governments would withdraw their support to the economy? “ one thing is sure. when time comes, systemic economies are not credible in going back to sustainable fiscal policy in the mid to long run. we won ’ t have the recovery which we are hoping for. because governments would not inspire confidence to households and corporate business. it is the evaporation of confidence that created this dramatic turmoil. now we have to do everything to rebuild confidence. ” when is the timing for a fiscal exit strategy? “ the position of the governing council of the ecb is that the fiscal adjustment process should start, in any case, not later than the economic recovery and that the consolidated effort should be stepped up in 2011. this is the position for the euro area as a whole. naturally some countries have more problems than others and they have to take into account their particular situation. ” in germany and italy there is a debate for cutting taxes – would it be a right way to support growth? “ the rule which is the best in terms of running a fiscal policy is : first, to be careful that the level of deficits in the mid - long term is in line with the stability and growth pact ; that the fiscal strategy is sustainable and inspire confidence. second : to go to this position you need to reduce public expenditure. and third, if it is not enough, you have to increase taxes. only in the case your reduction of spending is big enough to give you additional room you can embark on tax reductions. there is no other way to proceed. i ’ m not responding for italy, or for a particular country, it is simple arithmetic. ” how can a high ratio of debt

. as a result, the ecb has a clearer and more credible inflation target, since this 2 % target eliminates the possible impression of asymmetry that could stem from the previous target ( “ below, but close, to 2 % ” ) and seeks to provide a clear anchor for inflation expectations. as i will highlight later on in my talk, this definition also confirms the medium - term orientation of monetary policy that already existed under the previous strategy. this medium - term orientation provides room for inevitable short - term deviations of inflation from the target, as well as for lags and uncertainty in the transmission of monetary policy. moreover, the flexibility embedded in this medium - term orientation also allows for an appropriate monetary policy response to inflation deviations from the target that takes into account the origin, scale and persistence of the underlying shocks to inflation. second, the ecb has taken into account the monetary policy implications of the lower bound on interest rates. in particular, the new strategy establishes a requirement for especially forceful or persistent monetary measures when the economy is close to the effective lower bound, in order to prevent negative deviations from the inflation target from becoming entrenched. this may also imply a transitory period of overshooting in which inflation is moderately above target. i will also refer to this key aspect of the new strategy in the third part of my talk today. and third, the ecb has made explicit that the set of policy rates remains its primary monetary policy instrument. however, in recognition of the effective lower bound on interest rates, the ecb has stated that it will also employ forward guidance, asset purchases and longer - term refinancing operations, or any other instrument, as appropriate. in this respect, let me very briefly mention some relevant elements in relation to these nonconventional monetary policy instruments. regarding forward guidance on interest rates, at end - july 2021, the ecb revised this monetary policy tool to bring it into line with the new strategy. in particular, the revised forward guidance incorporates the 2 % symmetric inflation target and establishes three conditions that need to be fulfilled before the ecb governing council raises its interest rates. first, we have to observe “ that inflation reaches 2 % well ahead of the end of its projection horizon ”. as ecb president christine lagarde explained following the announcement of the new forward guidance, “ well ahead ” basically refers to the mid - point of our projection horizon, which covers two to three years. 5 second, inflation