instruments that allows us to support economic activity and bring inflation back towards 2 %. there are not just the asset purchases, there are also interest rates. and on this, we have been clear that interest rates will remain at their current levels, that is, very, very low, close to zero – even below zero – for a long period, even beyond the horizon of our asset purchases. so we need to look at the longer term. in the event of an economic slowdown – and, again, it is a possibility – do you have the means to respond effectively? it ’ s not a possibility that we are currently talking about, because right now there is no reason to worry about growth in the euro area. growth is very strong, very robust and very broad - based across the euro area. but whatever the circumstances, the ecb has a clear mandate : to bring inflation back towards 2 %. we will do whatever needs to be done to bring inflation back towards 2 %. but at the moment there is no need to adjust the path that has been decided on by the governing council. inflation is currently at 1. 4 %... 1 / 3 bis central bankers'speeches yes, it ’ s just under 1. 5 %. is that a good level? it ’ s not enough, it ’ s disappointing. but we know the reasons : it ’ s because unemployment is still high and there is a lot of economic slack in europe. but we want to bring inflation back towards 2 % in the medium term, and that is why monetary policy will remain accommodative. the major issue at present are the threats issued by the us president, donald trump, who blows hot and cold on trade policy, and in particular this power struggle he has embarked on with china. should europe get involved at this stage? as a large trading power, europe is bound to be affected … for now, trump is saying “ i ’ ll threaten europe but without specific customs barriers on european products ” … europe has a single trade policy and that means it has to react, and not just to the threat of import tariffs. it also needs to look at the source of the problem, that is, overcapacity throughout the world, and in particular overcapacity in china. this is not a matter for the ecb, of course ; it ’ s a matter for the european commission and for eu governments. what ’ s important for us, from an economic perspective,

have been excessive. is the economy now in such a high gear that high inflation could become entrenched? looking at the big picture, the positive factors are that economic recovery continues in the euro area and employment is improving. at the same time, high fuel and food prices have hit the pockets of many people and cause concern to citizens. euro area consumer prices have increased exceptionally rapidly, by 5. 1 % in january. inflation has been fuelled by three factors in particular. 1 1. energy inflation explains over half of euro area inflation. the escalation of geopolitical tensions is likely to keep energy prices high for a long period. 2. inflation has been driven up by the normalisation of prices for services, following the opening up of economies in autumn 2021. 3. the rapid recovery from the recession has aggravated production bottlenecks and problems in the availability of components and has pushed up product prices. however, by themselves, these factors that are fuelling inflation will not lead to a permanent, prolonged rise in inflation, unless they cause significant second - round effects and a wage - price spiral. in contrast to the united states, wage inflation has thus far been fairly moderate in the euro area. we are thus following wage developments very closely. last summer, the european central bank ’ s governing council adopted a new monetary policy strategy for the ecb : we have a symmetric inflation target of 2 % over the medium term. currently, the medium - term outlook for inflation in the euro area is not far from this target. monetary policy decision - making does not react to short - term deviations from the symmetric inflation target, unless they are expected to leave a more permanent mark on inflation. if, however, inflation threatens to climb too high and for a prolonged period, the ecb ’ s monetary policy will work to prevent this by reducing the purchase programmes and refinancing operations as well as by raising policy interest rates. this is how an independent central bank that has been 2 / 3 bis central bankers'speeches set the primary objective of price stability operates. the ecb governing council launched in december the gradual normalisation of monetary policy. net purchases under the pandemic emergency purchase programme ( pepp ) will be discontinued at the end of march 2022. in our meeting last week, we assessed that risks to the inflation outlook are tilted to the upside. in an uncertain situation – i am referring also to the current geopolitical tensions and their possible impact on energy prices