: in order to preserve a level of medium and long - term market interest rates that is exceptionally favourable to growth and job creation, we have to solidly anchor inflation expectations at a level that is fully in line with our definition of price stability. we do that precisely by demonstrating to observers, investors, savers and our 313 million fellow citizens of the euro area that we do whatever is necessary to deliver price stability. if we were not credible in doing so, all our medium and long - term market interest rates would be much higher. this is well understood by european and global observers. by delivering price stability we also contribute to reinforcing consumer confidence. we are telling consumers : “ look, we are protecting and preserving your present and future purchasing power ’ ’. to sum up, what we are doing, i. e. being faithful to our mandate, allows the present euro area recovery to be sustainable in the medium and long run. the growth rate of europe now seems unable to reach its potential. should the ecb therefore become more than a financial watchdog? our present assessment is that the current trend in the growth rate in the euro area is around its potential growth rate, taking into account some volatility in the quarterly figures. we will see whether economic growth will accelerate, or whether we will have to cope with other, new shocks. we are constantly assessing the situation in a pragmatic way, based on the facts and the new information that we receive. let me add something which is important : a good monetary policy is a necessary condition for growth and job creation, but is not sufficient in itself. we also need a sound fiscal policy, bold structural reforms and appropriate monitoring of competitive indicators. this is the responsibility of all the other stakeholders which have a part in the overall result. the political leaders gave a very sharp reaction to your first rate hike in december, but not to the second in march. did you convince them in the meantime or how do you explain that? the ecb is totally and fiercely independent, as you can read in the treaty on european union. its credibility is based upon this independence. that credibility is our most precious asset and permits us today to have exceptionally favourable medium and long - term interest rates. i trust that this is increasingly well understood by all our partners in the euro area. did the recovery in germany help the ecb governing council to decide on the last rate hike? as you know, we look at the situation of the euro area as

a whole. the significantly positive signals in various german surveys are important, because germany is the largest national economy of the euro area. we will see how the present period of recovery develops. we have quite a number of good signals. these signals are encouraging for the euro area and confirm a trend for the recovery that is likely to be around our growth potential. that said, we are very pragmatic. we look at all the facts, figures and data, and stand ready to incorporate them in our future assessment. what risks to price stability do you see, with the exception of oil prices? we see a number of risks. some of them are associated with the increasing prices of oil and commodities. these increases are progressively incorporated in the prices of other goods and services that are energy intensive. we have another set of risks, which are associated with indirect taxes and increases in administered prices. furthermore, we have the risk of “ second round ” effects. this means that economic agents may incorporate in their price setting the wrong assumption that the higher headline inflation due to oil price increases will last in the medium and long run. these risks of “ second round ” effects are particularly significant as regards wages and salaries. we are there precisely to ensure price stability in the medium term. to date, we have not seen these risks materialise, but we have to prevent them. once the second round effects materialise, it is too late. signals for risks in the medium to long term can be deducted from our monetary analysis. for example, loans to the private sector are growing quite rapidly. you said you are not committed to a series of rate hikes, but two hikes do not make a cycle. can we expect a scenario similar to that from 1999 to 2000, with seven rate hikes in a row? we have not decided ex ante a series of rate hikes. it is important to convey this message, because otherwise observers might think that we have decided to raise rates at every meeting, as has been done by another important central bank. at the same time, i said that we never embark on any precommitment – we will do what is necessary to counter the risks that we identify. that is why we increased rates in december, why we did not in january and february, and why we did increase rates in march. i don ’ t want to say anything else. one thing is for sure : all observers have understood that we did not decide a priori to increase rates