christine lagarde : ecb press conference - introductory statement introductory statement by ms christine lagarde, president of the european central bank, and mr luis de guindos, vice - president of the european central bank, athens, 25 october 2023. * * * good afternoon, the vice - president and i welcome you to our press conference. i would like to thank governor stournaras for his kind hospitality and express our special gratitude to his staff for the excellent organisation of today's meeting of the governing council. the governing council today decided to keep the three key ecb interest rates unchanged. the incoming information has broadly confirmed our previous assessment of the medium - term inflation outlook. inflation is still expected to stay too high for too long, and domestic price pressures remain strong. at the same time, inflation dropped markedly in september, including due to strong base effects, and most measures of underlying inflation have continued to ease. our past interest rate increases continue to be transmitted forcefully into financing conditions. this is increasingly dampening demand and thereby helps push down inflation. we are determined to ensure that inflation returns to our two per cent medium - term target in a timely manner. based on our current assessment, we consider that the key ecb interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. our future decisions will ensure that our policy rates will be set at sufficiently restrictive levels for as long as necessary. we will continue to follow a data - dependent approach to determining the appropriate level and duration of restriction. in particular, our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. the decisions taken today are set out in a press release available on our website. i will now outline in more detail how we see the economy and inflation developing and will then explain our assessment of financial and monetary conditions. economic activity the euro area economy remains weak. recent information suggests that manufacturing output has continued to fall. subdued foreign demand and tighter financing conditions are increasingly weighing on investment and consumer spending. the services sector is also weakening further. this is mainly because weaker industrial activity is spilling over to other sectors, the impetus from reopening effects is fading and the impact of higher interest rates is broadening. the economy is likely to remain weak for the 1 / 4 bis - central bankers'speeches remainder of this year. but

markets that the ecb was unwavering would put a halt to the downward spiral. i was determined to make that point forcefully. and the markets did the rest. so once you ’ d said this and it had a market reaction, did you have a clear plan then of what you were going to do to back it up? a strong commitment to intervene in an unlimited fashion supported by an equally credible commitment of the country concerned. given the experience with smp, that commitment needed to be clearly spelled out and backed by a programme with the then efsf, now the esm. the sense is now that it has acted as a nuclear deterrent. you never really needed to draw on it because markets find it so convincing. were you convinced yourself at the point you created it that markets wouldn ’ t test it? the second meeting was in early september. then we were ready to be tested. the continuation of the favourable market reaction in my eyes showed that it was really a crisis of confidence that we needed to address. yes. that was the genius of it. did you figure that it might have a chance of working that way? the message was expected to calm the markets, but i also knew this message would be sustained if the countries undertook reforms needed to cement those lower spreads and to 5 / 10 bis central bankers'speeches produce sustainable growth. and of course omt was crucially upheld in the court. that pronouncement of the ecj confirmed the legitimacy of our actions. to call a cat a cat, if you ’ re looking at your tenure do you think you ’ ve had any impact on german public opinion? well, the ecb. let ’ s not personalise it. the behaviour of the ecb during the crisis, the fact that after so many years we ’ re still together, that the economy has now fully recovered of course helped. i would never miss an opportunity to say, employment increased by almost 11 million in less than six years. in the euro area we lost fewer jobs in the crisis and then created more new ones than was the case in the united states. and germany, the country where our conversation is taking place right now, is actually doing not only better than many others but very well in absolute terms and the best in 40 years. in fact, germany ’ s real gdp growth, on a yearly basis, has been positive for 24 consecutive quarters and the unemployment rate stands at its post - unification historical low of 3. 1