christine lagarde : introductory statement at the cosac meeting introductory statement by ms christine lagarde, president of the european central bank, at the meeting of the conference of parliamentary committees for union affairs of the parliaments of the european union ( cosac ), paris, 14 january 2022. * * * before i begin my remarks, i would like to take a moment to honour the memory of president david sassoli. like all who knew him, i was deeply saddened by his loss, and i would like to remember him with the words he said in his inaugural speech as president of the european parliament : “ europe still has much to say if we can all speak with one voice ”. his commitment to europe, and to all europeans, will be greatly missed. i am very grateful for the chance to speak today with parliamentarians from across the eu. almost 27 years ago to the day, also while inaugurating a french eu presidency, president francois mitterrand said : “ the more europe there will be, the more democratic this europe must be, and the more parliamentary it must be ”. these words remain as true today as they were at the time. what a long way we have come since then. in january 2002, people in 12 eu countries held euro banknotes and coins in their hands for the very first time. now, 20 years later, over 340 million people are using euro cash in their everyday life and our single currency is more popular than ever. reaching this point has not been easy. we have faced a series of crises, ranging from the global financial crisis to the sovereign debt crisis to the pandemic crisis. we have had to redesign and reinforce our institutional framework multiple times along the way. but, despite the sceptics and against their expectations, we have prevailed – and we have emerged from each crisis stronger. today, though the number of infections in europe remains very high, we are moving out of the emergency phase of the pandemic. this is thanks to our remarkable collective response. but we need to retain our sense of unity and direction as we move into the next phase. the task we are facing now is to build on the foundations we have laid in the past two years and embed the lessons we have learned. if we do so, we can turn our achievements into lasting progress for europe. i see three key directions in which this is possible. these are providing stability, strengthening supply and ensuring strategic autonomy

important role in our monetary policy. if the key interest rate is below the natural rate, monetary policy has a stimulating effect on the economy as it encourages consumption and investment. conversely, when the key rates are above the natural rate, this dampens demand and thus price rises. in the current environment, the ecb has brought the market rate below the level of the natural rate. the key rate since march this year has been at zero and the rate on the deposit facility – 0. 4 %. had we not done this, constant nominal interest rates amid falling inflation rates would have led to higher real interest rates and undermined anaemic growth even more. this would have increased the risk of deflation. we therefore had to act in order to abide by our price stability mandate. 1 / 5 bis central bankers'speeches but we cannot lower our interest rates to an unlimited extent. at a certain level, it becomes more attractive for market participants, for example, to keep cash – despite the associated costs – than to pay negative interest rates. although this point has not yet been reached, we should bear in mind that reactions to rate cuts further into negative territory do not necessarily follow a linear path. the reactions of people in extreme situations cannot be anticipated. but we can also influence market interest rates in other ways. thus, for example, with our asset purchases we have pushed the yield curve down. and by offering targeted longer - term refinancing on favourable terms which reward additional lending, we have made it possible for banks to cut their interest rates, a move which has led to increased lending. all our measures in recent years have contributed to the economic recovery in the euro area, although this has been slower than expected and desired. as i said just now, lending is on the rise, as is demand. the unemployment rate in the euro area fell to 10 % in the third quarter, and deflation risks have clearly decreased. we expect inflation to reach 1. 6 % in 2018, which is very close to our objective. however, to bring about a sustainable recovery, additional support will be needed from the political sphere in the shape of structural reforms in various areas. only in this way can we reverse the growth trend over the long term and increase growth potential. although the return to price stability is taking longer than originally expected and has become more difficult in structural terms, this is no reason to deviate from our goals – whether in relation to our definition of price stability or to its