duration of the adverse effects of the conflict on financial markets, energy input prices and global value chains. as a result, euro area gdp growth for 2022 has been revised down, compared with the december 2021 projections, by between 0. 5 pp ( to 3. 7 % ) and 1. 9 pp ( to 2. 3 % ), while the average inflation rate for 2022 has been revised up, again compared with the december 2021 projections, by between 1. 9 pp ( to 5. 1 % ) and 3. 9 pp ( to 7. 1 % ). the economic policy response the scale of the effects of the conflict will also ultimately depend on the economic policy response. allow me to now offer a few thoughts on that response. european economic policy like the pandemic, the armed conflict in ukraine represents a highly adverse, exogenous shock common to all european economies, but potentially one that will have asymmetric the scale of the adverse effect of growing uncertainty on economic activity is per se very difficult to measure. however, various simulation exercises carried out internally at the banco de espana suggest that in some particularly acute scenarios as to the severity and duration of the conflict, gdp losses owing to this channel could be significant. effects across countries, sectors and firms, given that, as i have said, the levels of exposure to and dependence on the russian and ukrainian economies vary widely. an optimal response to this shock should mitigate the short - term economic effects and, over the medium term, boost europe ’ s strategic autonomy in both energy and defence. in addition, joint european action, through the pooling of budgetary resources, is once again the most effective means of financing the public expenditure stemming from the invasion. a joint response should allow the economies hardest hit by this latest shock to effectively weather the adverse scenario without suffering any persistent deterioration in their economic outlook or future growth capacity, while simultaneously eliminating a new potential source of financial fragmentation in europe. it should focus on providing support to the firms and individuals most vulnerable to this new shock, in addition to implementing the investments needed to reduce europe ’ s energy dependence on russia and increase our defence capacity. in this respect, it will be important to see how some of the initiatives discussed at the recent eu leaders ’ summit in versailles take shape over the weeks ahead. for instance, the european commission, under the framework of the repowereu initiative, has proposed a plan to reduce the eu ’ s demand for russian gas by 60 % by

glenn stevens : the united kingdom and australia – shared history, shared outlook remarks by mr glenn stevens, governor of the reserve bank of australia, to the australian british chamber of commerce, sydney, 18 october 2013. * * * i thank alexandra rush for assistance in preparing these remarks. it could have been the dutch who started european settlement in australia. in their journeys to the east indies numerous dutch traders saw the western and northern coastlines of the continent and some came ashore. but the conditions were not hospitable and, finding nothing in the way of commodities that they could exchange for value at home, they left. or it could have been the french : jean - francois de galaup la perouse arrived in botany bay only a few days after arthur phillip ’ s fleet in 1788. apparently the english and french mariners, despite the rivalry of their countries, enjoyed cordial relations for a brief interlude before la perouse sailed off into the south pacific, never to be seen by europeans again ( dyer 2009 ). but it was the english who came to start a colony. eighteen years after james cook landed at botany bay, the first fleet anchored there in january 1788. after only a few days, finding the shallow, sandy bay too exposed and short on potable water, they sailed 20 kilometres or so north to port jackson, which they regarded as a superior location to found the settlement. looking at sydney harbour today, it appears they made the right call. the contrast with today ’ s prosperity could not, however, have been more pronounced. in time the great south land would help to feed the world, but in 1788 the new arrivals couldn ’ t feed themselves. geoffrey blainey ’ s book the tyranny of distance records how the fledgling settlement nearly starved – and how, later in 1788, hms sirius was sent to a suitable supply station to bring back food and seed. that station was the cape of good hope ( now cape town, south africa ) – 11, 000 kilometres away – a measure of the degree of isolation the first fleeters must have felt. the return journey took about seven months, shorter than it would have been had captain hunter not ignored the advice of his superiors. after proceeding south from sydney, he turned east, rather than west, so picking up a favourable wind for the outward journey. he sailed more miles, but in a shorter time. and so began the inflow of people, capital, and know - how that ultimately resulted in the modern australian nation.