% this year, 1. 7 % next year and 1. 6 % in 2019. unemployment has been falling in many euro area countries. in the euro area as a whole, the unemployment rate is now less than 1 percentage point above its average in the pre - crisis years after declining to 9. 6 % last year. the economic upswing and improved employment data in the euro area are likely to drive up price pressures gradually. inflation rose more sharply at the start of the year than anticipated in the december projection. in february, hicp hit a four - year high of 2. 0 %. however, this increase was largely attributable to base effects and higher energy prices. on friday, eurostat published 1 / 5 bis central bankers'speeches its most recent estimate : the inflation rate is expected to hit 1. 9 % in april. meanwhile, core inflation is currently estimated at 1. 2 %. according to the march forecasts, it will slowly increase as the euro area ’ s economic recovery continues. it is expected to reach 1. 8 % at the end of the forecast horizon in 2019. considering these numbers, an accommodative monetary policy remains appropriate. it goes without saying that opinions differ with respect to the right degree of monetary accommodation. of course, views also vary regarding the point in time at which the price outlook will have firmed enough to justify a change in communication and, ultimately, in the monetary policy stance. let me share three thoughts on this issue. first, the bundesbank has always been critical of government bond purchases by the eurosystem central banks as they lead to a dangerous commingling of monetary and fiscal policy. second, as inflation has increased, the real interest rate has declined even further. the effects are comparable to a central bank rate cut. hence, monetary conditions in the euro area will be looser even without any further central bank action. third, the risk of a deflation scenario in the euro area is extremely low. financial market participants seem to have a similar take on it : according to the respondents to the survey of professional forecasters, the probability of the inflation rate turning negative in the next five years is in the region of only 2 %. against the backdrop of robust growth and inflation rates, public discussion regarding an exit from the ultra - loose monetary policy has already started. that said, as you might already expect, i did not come to new york to comment on the timing of the exit. it

lehman brothers which threatened to produce very adverse economic outcomes with strong reductions in output, deflationary spirals and high unemployment, we made a series of policy rate cuts. these limited the consequences the downturn could have had on the income of households and firms across the euro area. our more recent rate cuts have narrowed the interest rate corridor between the deposit rate and our main policy rate to 50 basis points. these rate cuts have further eased the financing conditions of borrowers in the euro area and they have contributed to a decline in the crosscountry heterogeneity in funding costs. banks from stressed countries which participate most in eurosystem liquidity - providing operations will benefit from the lower interest rate charged for these operations. this will, over time, translate into reduced financing costs and improved access to credit for households and firms in stressed countries. second, apart from standard monetary policy, the ecb has also resorted to a number of nonstandard measures. by re - directing credit to those segments where financial intermediation ceased to function, the non - standard measures supported those areas most in need and thereby countered the increasing heterogeneity. the announcement of outright monetary transactions ( omts ) in particular has played a crucial role : it has improved the transmission of monetary policy by removing the “ tail risk ” arising from redenomination concerns in certain euro area countries. see m. brunnermeier, and y. sannikov, 2012. “ redistributive monetary policy ”, paper prepared for the 2012 jackson hole symposium, princeton university. see b. coeure, 2012. “ central banking, insurance and incentives ”, speech at the ecb conference on “ debt, growth and macroeconomic policies ” frankfurt, 6 december. bis central bankers ’ speeches overall, while our non - standard measures were designed for the euro area as a whole, their use has varied among counterparties and across countries. in this regard, our non - standard measures restored the distributional neutrality of our monetary policy by mitigating distortions in certain stressed asset classes or sectors. their impact has prevented very adverse economic outcomes for certain sectors and countries, and because of the effect this would have had on the rest of the euro area, it has thereby also supported medium - term price stability in the euro area as a whole. today we are clearly seeing signs of improvement in financial conditions. spreads in sovereign and corporate debt markets have fallen substantially. deposits placed by the euro