major investor in the asian continent. only last march the european commission announced over €6. 5 billion in new support for countries and organisations in asia for the period 2015 – 2020. vii. final remarks from the above analysis, there is a rather straightforward answer to the question posed in the title of my speech, if the euro area ’ s low inflation is a symptom or a cause of weak recovery : the current low inflation environment is rather a symptom than a cause of weak demand. the latter is the key effect of deflation on the real economy due to the deferment of private spending. the important question is of course if the policy proves effective at the end, what – and how certain – would be the final impact of qe on aggregate output and on anchoring inflation expectations. moreover, if the monetary stimulus is not sufficient to achieve the policy objective, what role fiscal policy could play alongside monetary policy. i turn to these issues right now, and these will be my closing remarks. verdict on qe to start with the first question the truth is that we cannot identify precisely how much of an impact on the economy is a direct result of qe or something else. moreover, we will probably never know exactly the degree of efficacy of qe for the simple reason that we can never know with precision what would have happened in its absence. on top of that, we are living in an era full of uncertainties ; the only certainty is that there is no certainty! often our decisions are only as good as our last meeting. however, even if qe ’ s other effects are uncertain, i expect the signalling effect and the resultant boost in confidence to be quite strong. what more should be done if the euro area ’ s low inflation persists and recovery remains weak, then priority should be given to complementary fiscal policy, such as changes into the composition of government bis central bankers ’ speeches spending towards bringing forward public investment, especially if one considers the fact that long - term borrowing rates are so low today. such a policy would boost aggregate demand in the short run, but also it would aim to improve productivity ( tfp, the main driver of long - run growth, is moving at negative rates since 2007 in the euro area ). in this context, the european commission ’ s investment plan for europe ( also known as the juncker plan ) comprising a package of measures to unlock public and private investments in the real economy of at least €315 billion over the

banks at a rate of 1. 00 per cent. in addition, sound and creditworthy banks can secure overnight funds in the interbank market at a rate that is between the 1. 00 per cent main policy rate and the deposit rate, the latter of which is only 0. 25 per cent. moreover, we have taken several measures that are not standard in order to encourage banks to extend new credit or to continue to roll over maturing loans to firms. these measures include fixed - rate, fullallotment tenders which grant eligible banks access to unlimited funding for up to six months at our main policy rate, and the expansion of the list of eligible assets that can be used as collateral. i should also mention that ecb president jean - claude trichet recently announced that additional non - standard measures will be implemented in the next few months. as concerns about the extent of the downturn have mounted, euro - area governments have also turned to fiscal policy to support demand. fiscal policy is providing support through automatic stabilizers and the use of government balance sheets to shore up the financial system, including capital injections to banks. in addition, many euro - area governments have taken discretionary measures to stimulate their economies. while discretionary fiscal measures can help bolster aggregate demand and limit the impact of the financial crisis on the real economy, the room for such measures is subject to a number of important limitations. • first, the use of fiscal policies will need to take account of the sustainability of public finances. while global developments have played a role in the widening of euro - area sovereign - interest - rate differentials since last fall, country - specific factors, including projected debt levels, have also played an important role. • second, a clear and credible commitment to long - run fiscal consolidation is more essential than ever in present circumstances. any loss of market confidence could raise long - term real interest rates and debt - service costs, offsetting the expansionary effects of measures already taken and adding to financing costs. therefore, fiscal support measures should be accompanied by a plan to withdraw the stimulus as the crisis abates. • third, to attain such a credible commitment, it is crucial that euro - area countries respect fully the provisions of the stability and growth pact. this will provide the necessary medium - term framework with which to preserve the public's trust in the sustainability of the public finances. • fourth, as growth is a key factor in restoring debt sustainability, directing expenditures toward productive areas – such as