proponents of this view considered 6 percent a reasonable estimate of the nairu. since 1995, however, the unemployment rate has been below this level, and substantially below of late, while inflation has continued to progress toward our price - stability objective. in response, over the past few years, many observers have revised their estimates of the nairu down by half a percentage point or more. yet considerable uncertainty remains about the confidence with which the new estimates can be relied upon for evaluating inflationary pressures. the nairu never was measured with precision ; statistical inference has always provided a distribution of likely values around a point estimate. and several factors, for instance the demographic composition of the labor force, have long been known to introduce systematic variation in its value over time. nonetheless, the uncertainties about how structural forces may be changing the nairu seem unusually large at present and cannot be ignored. and for some the present uncertainties have called into further question the basic usefulness of the concept, or at least of a point estimate held with any confidence. a related uncertainty concerns the underlying trend growth of labor productivity. until fairly recently, this trend had seemed to have been about constant since the mid 1970s. but there are many that believe that a pickup may have occurred in the last few years, and a faster productivity trend would help to explain the unexpectedly favorable economic growth - unemployment - inflation nexus in recent years. unfortunately, much as with the nairu, our understanding of the forces that drive the productivity trend is less than perfect. certainly, the investment boom of the current expansion has raised the amount of capital for each worker and contributed to an increase in labor productivity, and it may be that advancing technology is making the capital stock and workforce more productive. however, some of the recent pickup in productivity is the normal response to the faster output growth of late, so the degree to which there is a new higher trend remains an open question. another difficulty in assessing the current amount of slack in the economy, and a third uncertainty, concerns the divergent patterns in alternative measures of excess demand. capacity utilization in manufacturing and the rate of unemployment have historically moved together over the cycle. unexpectedly, they have diverged in the current expansion, in part as the surge in investment has kept capacity utilization in the manufacturing sector near its historic average while labor markets have become tighter and tighter. recent developments in south - east asia also have contributed to uncertainty about the current monetary policy environment. one place where the effect of the crisis is being felt is

9 % in france. the consensus view of economists on the current crisis is that each month of lockdown will mean a loss of 2 % to 3 % of annual growth in 2020. that would imply a fall in gdp of 3. 5 % to 4 % in a scenario where the lockdown lasts a few weeks, and of 9 % to 10 % in the event of a longer lockdown lasting several months. but i would caution that these are just estimates! are eu countries responding adequately? they have quickly taken far - reaching measures, increasing fiscal spending and providing support for employees and businesses. the eu has granted countries maximum flexibility in terms of both deficits and debt ratios. we are in a period where we need to use all of our tools without hesitation. having fully recognised this, germany, although very attached to its balanced budget principle, has temporarily relinquished its zero deficit policy. but if debt soars, could certain european countries default? is there a risk of a domino effect? 1 / 3 bis central bankers'speeches no. the euro area ’ s architecture has been strengthened precisely to address that fragmentation risk. in addition, the european central bank ( ecb ) is there ; it has its entire toolbox at its disposal and it will provide the necessary shield to protect the euro area. before march, people said to me, “ the toolbox is empty, you have nothing left, you can ’ t use the monetary weapon ” – and then we did! the “ bazooka ” used by the ecb consists of a fund of €750 billion. how does it work? our new asset - buying programme enables us to respond to an enormous shock which would otherwise risk undermining price stability. it consists of a large envelope for the purchase of public and private sector securities, including corporate bonds and commercial paper. we are a bit like a control tower : we intervene where there is a risk of fragmentation. altogether, we have more than €1, 000 billion of firepower at our disposal to support financing conditions, and thus companies and jobs. at the same time, we can mobilise €3, 000 billion of liquidity. today, if a bank extends a loan, whether it is to someone who is self - employed, a small business, a small or medium - sized enterprise or a large company, it can bring those loans to us as collateral and say, “ here you go, i need funding ”. and the funding is there, at very