and realistic fiscal exit strategies and for fiscal consolidation. some countries are in a relatively favourable position because their past management was wise and prudent, while others are already very close to losing credibility. spain – where fiscal consolidation had progressed more than elsewhere – will have to make sure that it keeps its fiscal credibility in the years to come in strictly meeting the requirements of the stability and growth pact. a clear plan for a medium - term fiscal correction becomes even more pressing for rapidly ageing societies like ours, as an increasing numbers of pensioners will mean mounting claims on public transfers. iv. conclusion more than one year after the dramatic deepening of the financial crisis in september 2008, we can spot a number of signs of economic stabilisation in the euro area. we have halted the freefall in economic activity that we witnessed over a period lasting more than six months after the intensification of the crisis in mid - september 2008. but the crisis has debilitated the real economy. as i said, the crisis has proved so deep because it has deprived our citizens of confidence. every business activity is by its very nature an act of trust, an expression of confidence. as regards bankers, by granting loans more actively to entrepreneurs they can contribute to transmitting and inspiring confidence to the economy at large. being part of the euro area and the european union will help in this process. for what concerns the ecb and the entire eurosystem team, with banco de espana as a very active member of the team, our 330 million fellow citizens in the euro area ask that we continue to deliver price stability over the medium term, in line with our definition – less than 2 % but close to 2 %. our determination to anchor solidly inflation expectations has served us well since the introduction of the euro, including in the recent period of crisis, by helping to avoid the materialisation of the risk of deflation. the euro area can count on us to continue to be a solid anchor of stability and confidence in these challenging times. thank you for your attention.

developments remains complex at this stage. the existing excess liquidity, if sustained, might signal risks to price stability in the medium term. however, it is unlikely that excess liquidity will translate into inflationary pressures in the near future, given the environment of subdued economic growth. turning to the second pillar of the ecb ’ s monetary policy strategy, at this juncture the most likely scenario is modest real gdp growth in the second half of 2002 and an acceleration towards growth rates more in line with potential in the course of 2003. the recent scaling down of expectations for economic growth stems partly from a weaker outlook for the global economy, which in turn is closely related to the significant fall in stock prices which has occurred over recent months in all major economies. as regards domestic demand, higher growth of private consumption should be a key factor in supporting economic activity in the euro area. there are indications that such a recovery took place in the second quarter, but at a moderate pace. in the period ahead, if oil prices do not rise further, consumption should be supported by an increase in real disposable income resulting from the decline in inflation from the higher levels recorded at the start of this year. the impact of the introduction of the euro banknotes and coins on consumer prices has been very limited and we are convinced that divergences between factual and perceived inflation are a temporary phenomenon. furthermore, the low levels of interest rates across all maturities should help to support investment and economic growth in the period ahead. in spite of these positive factors, however, the uncertainty surrounding the economic outlook remains high in the short term. in principle, the increase in direct and indirect holdings of equities by euro area households over recent years has raised the potential for recent financial market developments to have an adverse influence through wealth effects. moreover, recent financial market developments may make it more expensive to raise equity capital to finance corporate investment in the euro area. while all available evidence suggests that these effects will continue to be relatively limited and indeed much smaller than in other major economies, the sharp decline in equity prices is an element which has increased the uncertainty surrounding the recovery. in addition, imbalances in the global economy and their potential spillover to the euro area economy remain a significant source of risk for growth. finally, uncertainty is also high because it is difficult to foresee developments in the oil markets against the background of current political developments. moving to the outlook for prices in the euro area, we have seen hicp inflation