the ecb and the european parliament. the ecb has made a proposal to the european parliament and looks forward to finalising an agreement between our two institutions. thank you for your attention. i am now looking forward to listening to your views during today's debate. 1 the final outcome could be slightly higher than the flash estimate when the official data for germany are included. 2 standard eurobarometer 97. 3 lagarde, c. ( 2022 ), " a new global map : european resilience in a changing world ", keynote speech at the peterson institute for international economics, 22 april. 4 / 5 bis - central bankers'speeches 4 ecb ( 2022 ), " ecb supports eu issuance service ", press release, 12 july. 5 ecb ( 2021 ) " eurosystem reply to the communication from the european commission " the eu economy after covid - 19 : implications for economic governance " of 19 october 2021 ", 1 december. 5 / 5 bis - central bankers'speeches

of the euro area economy, as discussed by the governing council earlier this month. euro area growth slowed in the fourth quarter of 2022. the outcome was better than we had initially expected, as the adverse economic effects from russia's unjustified war were partly buffered by improving supply conditions and fiscal support related to the energy crisis. while confidence is rising and energy prices have fallen, we expect activity to remain weak in the near term. according to eurostat's flash estimate – calculated using eurostat estimates for germany –, inflation was 8. 5 % in january. 1 the decrease compared with december was mainly due to a sharp drop in energy prices. at the same time, the prior surge in energy prices and other input costs is still feeding through to consumer prices. overall, price pressures remain strong and underlying inflation is still high – excluding energy and food, it remained at 5. 2 % in january. looking at the labour market, wages are growing faster, supported by robust employment dynamics, with the main theme in wage negotiations becoming how wages can to some extent catch up with high inflation. and even though most measures of longer - term inflation expectations currently stand at around 2 %, these measures warrant continued monitoring. the risks to the growth outlook are now more balanced than they were in december. russia's war against ukraine and its people continues to be a significant downside risk, but a faster resolution of the energy shock would support growth. the risks to the inflation outlook have also become more balanced, especially in the near term. the ecb's monetary policy against this backdrop, at our latest meeting on 2 february we decided to raise the key ecb interest rates by 50 basis points and we expect to raise them further. in view of the underlying inflation pressures we intend to raise interest rates by another 50 basis points at our next meeting in march, and we will then evaluate the subsequent path of our monetary policy. keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations. our future policy rate decisions will continue to be data - dependent and follow a meeting - by - meeting approach. at our february meeting, we also decided on the modalities for reducing the size of the eurosystem's balance sheet under the asset purchase programmes ( app ). as communicated in december, the app portfolio will decline at a measured and predictable pace, with the decline amounting to €15