, if the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase our asset purchase programme in terms of size and / or duration. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp increased by 0. 3 %, quarter on quarter, in the third quarter of 2016, after recording a similar pace of growth in the second quarter. incoming data, notably survey results, point to somewhat stronger growth in the last quarter of 2016. looking ahead, we expect the economic expansion to firm further. the pass - through of our monetary policy measures is supporting domestic demand and facilitating the ongoing deleveraging process. the very favourable financing conditions and improvements in corporate profitability continue to promote the recovery in investment. moreover, sustained employment gains, which are also benefiting from past structural reforms, provide support for private consumption via increases in households ’ real disposable income. at the same time, there are signs of a somewhat stronger global recovery. however, economic growth in the euro area is expected to be dampened by a sluggish pace of implementation of structural reforms and remaining balance sheet adjustments in a number of sectors. the risks surrounding the euro area growth outlook remain tilted to the downside and 1 / 2 bis central bankers'speeches relate predominantly to global factors. according to eurostat, euro area annual hicp inflation increased markedly from 0. 6 % in november 2016 to 1. 1 % in december. this reflected mainly a strong increase in annual energy inflation, while there are no signs yet of a convincing upward trend in underlying inflation. looking ahead, on the basis of current oil futures prices, headline inflation is likely to pick up further in the near term, largely reflecting movements in the annual rate of change of energy prices. however, measures of underlying inflation are expected to rise more gradually over the medium term, supported by our monetary policy measures, the expected economic recovery and the corresponding gradual absorption of slack. turning to the monetary analysis, broad money ( m3 ) continues to expand at a robust pace, with its annual rate of growth increasing to 4. 8 % in november 2016, up from 4. 4 % in october. as in previous months, annual growth in m3 was mainly supported by its most liquid components, with the narrow monetary aggregate m1 expanding at an annual rate of 8. 7 % in november, up from 8. 0 % in october. loan

christine lagarde : how can a united europe meet the challenges it faces today? opening remarks by ms christine lagarde, president of the european central bank, during a dinner on " uniting europe ", world economic forum, davos, 23 january 2020. * * * this year marks the 70th anniversary of the schuman declaration, which first put forward the idea of a single authority to govern the production of coal and steel in europe. robert schuman ’ s method for building europe was clear : “ europe will not be made all at once ”, he said, but “ through concrete achievements which first create a de facto solidarity ”. his idea was that, by taking deliberate policy steps to become interdependent – like sharing raw materials – european countries would become inseparable. and indeed they have. we have become both safer and richer. the formation of the single market gives every eu citizen average welfare gains of €840 each year1. today, schuman ’ s sequence is, in some ways, being reversed. interdependence is now being driven increasingly by a fast - changing global environment – and policymaking has to catch up. european countries have joint exposures to the climate, to the global economy, to multinational firms, to foreign powers. and now we need to work together to address them. so what does that mean practically? there are three key aspects. the first is demonstrating what is needed to make openness globally sustainable. the eu is the most advanced example of cross - border economic and political integration because it has invested in institutions to ensure fairness – a single court and a single set of rules. and when new forces have arisen with the potential to undermine openness – the threat of competitive devaluations or of financial spillovers – europe has not responded by raising barriers. rather it has sought – and is seeking – to fill the gaps in its economic and monetary union with institutional innovations like the banking union. at a time when trade tensions are rising even as global institutions are being weakened, these examples can provide useful lessons. the second aspect is leveraging the areas where the eu is powerful, namely the single market. the eu has become a leader in ensuring strict and fair competition laws which are enforced at arm ’ s length2. this is crucial at a time when winner - takes - all dynamics are increasing in many markets, which raises concerns about firms ’ political and market power. for example, in 2018 the average