the year to march 2008, and the flow of loans in recent months has been strong. for the time being, there is little evidence that the financial market turbulence seen since early august 2007 has strongly influenced the development of broad money and loans. continued strong loan growth to non - financial corporations suggests that the availability of bank credit to euro area firms has not been significantly impaired by the financial turmoil thus far. further data and analysis will be required in order to obtain a more complete picture of the impact of the financial market developments on banks ’ balance sheets, financing conditions and money and credit growth. to sum up, a cross - check of the outcome of the economic analysis with that of the monetary analysis clearly confirms the assessment that upside risks to price stability prevail over the medium term, in a context of very vigorous money and credit growth and with no significant signs of supply constraints on bank loans. the economic fundamentals of the euro area are sound, and incoming macroeconomic data continue to point to moderate but ongoing real gdp growth. however, the level of uncertainty resulting from the turmoil in financial markets remains high. against this background, we emphasise that the firm anchoring of medium to longer - term inflation expectations is of the highest priority to the governing council. we believe that the current monetary policy stance will contribute to achieving this objective. the governing council remains strongly committed to preventing second - round effects and the materialisation of upside risks to price stability over the medium term. we will continue to monitor very closely all developments over the coming weeks. regarding fiscal policies, the latest forecast by the european commission points to a rise in the euro area general government deficit ratio in 2008, followed by a further small increase in 2009. this deterioration in part reflects a less favourable economic environment and a likely reversal of windfall revenues accrued in past years. however, it also reflects a standstill in fiscal consolidation and new deficit - increasing measures in a number of countries with fiscal imbalances, including some with high deficits. for several countries, the attainment of the country - specific medium - term objectives by 2010 at the latest, which is the commitment made by euro area governments in berlin in april 2007, is clearly at risk. in these countries, much more ambitious policies are imperative. for all countries, prudent fiscal policies would also help to counteract current inflationary pressures. at the current juncture, it is also important to reinforce the structural reform agenda, in particular with a view to fostering market

christine lagarde : hearing of the committee on economic and monetary affairs of the european parliament speech by ms christine lagarde, president of the european central bank, at the hearing of the committee on economic and monetary affairs of the european parliament, brussels, 4 december 2024. * * * charts accompanying the speech i am pleased to return to this committee to discuss the ecb's monetary policy at such a critical juncture for europe. we are witnessing a rapidly shifting geopolitical landscape, but also enduring major structural challenges to our economic model. europe's response must be swift. it should focus on spurring investment, fostering innovation and raising productivity. this will require bold policy action and, together with the new european commission and the council, this parliament will have an important role to play. in my remarks today, i will discuss an important element of this response – the new economic governance framework – which you have chosen as one of the topics of this hearing. but i would like to start by updating you on the ecb's assessment of the euro area economy and our monetary policy stance. the economic outlook and the ecb's monetary policy stance the euro area saw moderate growth in the first half of this year, following five quarters of stagnation. real gdp growth was largely driven by exports and government consumption. domestic private demand remained weak amid high economic policy uncertainty and the effects of past monetary policy tightening. more recently, in the third quarter, real gdp rose by 0. 4 %, driven in part by temporary factors such as the paris olympics. however, survey - based data suggest that growth will be weaker in the short term, on the back of slowing growth in the services sector and a continued contraction in manufacturing. further ahead, the euro area's economic recovery should start to gather some steam. consumer spending is expected to pick up as real incomes rise, and investment is expected to recover as the impact of past monetary policy tightening fades. the euro area labour market has so far proven resilient. the unemployment rate remained historically low at 6. 3 % in october, while employment expanded by 300, 000 jobs in the third quarter. at the same time, surveys point to slowing employment growth and further moderation in the demand for labour. the medium - term economic outlook is uncertain, however, and dominated by downside risks. geopolitical risks are elevated, with growing threats to international trade. high degrees of trade openness and integration into global