##oeuvre. in this regard, current government commitments to start consolidation in 2011 at the latest and to go well beyond the structural benchmark for adjustment of 0. 5 % of gdp per annum represent the minimum requirement for all euro area countries. the success of fiscal adjustment strategies will also depend, crucially, on appropriate national budgetary rules and institutions and requires transparent budgetary procedures, as well as reliable and complete government finance statistics. turning to structural reforms, an appropriate restructuring of the banking sector should play an important role. sound balance sheets, effective risk management, and transparent as well as robust business models are key to strengthening banks ’ resilience to shocks, thereby laying the foundations for sustainable economic growth and financial stability. the eurosystem will submit its response to the european commission ’ s public consultation on the eu 2020 strategy, which is designed as a successor to the current lisbon strategy. to address future challenges, the eu 2020 strategy should focus on raising potential growth and creating high levels of employment through well - functioning labour and product markets, sound financial systems and sustainable fiscal policies. the aim is to achieve a highly competitive social market economy, as spelled out in the treaty. we are now at your disposal for questions.

non - financial sectors, both inside and outside the euro area. in addition, low capacity utilisation rates are likely to dampen investment, and unemployment in the euro area is expected to increase somewhat further, thereby lowering consumption growth. for these reasons, the euro area economy is expected to grow only at a moderate pace in 2010 and the recovery process could be uneven. the governing council continues to view the risks to this outlook as broadly balanced. on the upside, there may be stronger than anticipated effects stemming from the extensive macroeconomic stimulus being provided and from other policy measures taken. confidence may also improve further, and the global economy as well as foreign trade may recover more strongly than projected. on the downside, concerns remain relating to a stronger or more protracted than expected negative feedback loop between the real economy and the financial sector, renewed increases in oil and other commodity prices, the intensification of protectionist pressures and the possibility of disruptive market movements related to the correction of global imbalances. with regard to price developments, as expected, euro area annual hicp inflation increased further in december 2009 to stand at 0. 9 %, after 0. 5 % in november. the rise mainly reflects upward base effects stemming mostly from the drop in global energy prices a year ago. inflation is expected to remain around 1 % in the near term. looking further ahead, inflation is expected to remain moderate over the policy - relevant horizon, with overall price, cost and wage developments staying subdued in line with a slow recovery in demand in the euro area and elsewhere. in this context, it is important to emphasise, once again, that inflation expectations over the medium to longer term remain firmly anchored in line with the governing council ’ s aim of keeping inflation rates below, but close to, 2 % over the medium term. risks to this outlook remain broadly balanced. they relate, in particular, to the outlook for economic activity and the evolution of commodity prices. furthermore, increases in indirect taxation and administered prices may be stronger than currently expected owing to the need for fiscal consolidation in the coming years. turning to the monetary analysis, both the annual growth rates of m3 and loans to the private sector were negative in november, standing at – 0. 2 % and – 0. 7 % respectively. the concurrent declines to historically low growth rates recorded in these two series over the past months support the assessment of a decelerating underlying pace of monetary expansion and low inflationary pressures over the medium term. looking ahead