. in order to restore confidence, policy - makers in the euro area need to push ahead with great determination with fiscal consolidation, structural reforms to enhance competitiveness and european institution - building. at the same time, governments must stand ready to activate the efsf / esm in the bond market when exceptional financial market circumstances and risks to financial stability exist – with strict and effective conditionality in line with the established guidelines. the adherence of governments to their commitments and the fulfilment by the efsf / esm of their role are necessary conditions for our outright transactions to be conducted and to be effective. details of the outright monetary transactions are described in a separate press release. furthermore, the governing council took decisions with a view to ensuring the availability of adequate collateral in eurosystem refinancing operations. the details of these measures are also elaborated in a separate press release. let me now explain our assessment in greater detail, starting with the economic analysis. recently published statistics indicate that euro area real gdp contracted by 0. 2 %, quarter on quarter, in the second quarter of 2012, following zero growth in the previous quarter. economic indicators point to continued weak economic activity in the remainder of 2012, in an environment of heightened uncertainty. looking beyond the short term, we expect the bis central bankers ’ speeches euro area economy to recover only very gradually. the growth momentum is expected to remain dampened by the necessary process of balance sheet adjustment in the financial and non - financial sectors, the existence of high unemployment and an uneven global recovery. the september 2012 ecb staff macroeconomic projections for the euro area foresee annual real gdp growth in a range between – 0. 6 % and – 0. 2 % for 2012 and between – 0. 4 % and 1. 4 % for 2013. compared with the june 2012 eurosystem staff macroeconomic projections, the ranges for 2012 and 2013 have been revised downwards. the risks surrounding the economic outlook for the euro area are assessed to be on the downside. they relate, in particular, to the tensions in several euro area financial markets and their potential spillover to the euro area real economy. these risks should be contained by effective action by all euro area policy - makers. euro area annual hicp inflation was 2. 6 % in august 2012, according to eurostat ’ s flash estimate, compared with 2. 4 % in the previous month. this increase is mainly due to renewed increases in euro - denominated energy prices. on

proposal. to propel the recovery forwards, europe has a strong engine at its disposal : the single market, the eu ’ s greatest achievement for its citizens. as recognised by this parliament just a few weeks ago, the single market is the source of our collective prosperity and well - being. so it is crucial that we repair, strengthen and deepen it in the coming months. and this is even truer for the financial sector. a genuinely integrated and resilient market is essential to ensure financial stability and the financing of our economy. so progress on the capital markets union agenda is crucial. priority should be given to initiatives and proposals aimed at mobilising private savings and improving transparency and information for investors at the european level. given the urgency of the situation, we should be open to any new and innovative ideas which can accelerate progress on the capital markets union. as members of the european parliament and the committee on economic and monetary affairs, you have an important role to play in bringing forward the legislative work on these dossiers. thank you, and i look forward to your questions. 4 / 4 bis central bankers'speeches