growth pact and the macro - economic imbalances procedure by simplifying and strengthening the rules. second, introduce some form of sovereign debt restructuring mechanism. in the future, it should be ensured that the public debt is sustainable before countries get access to financial support from the esm. third, regulate the sovereign exposures on bank balance sheets to further weaken the sovereign bank nexus. many banks still hold large government bond portfolios of their own sovereign. while these exposures are treated as risk - free, the crisis has demonstrated that this is not always true. 7 / 15 finally, encourage private risk - sharing via more robust financial integration. the european capital markets union is a good starting point in this regard. conclusion ladies and gentlemen, allow me to conclude. over the past decade, the policy mix was mainly directed at the short - term, with a large involvement from the central bank. but the outlook is improving, and policy should rebalance towards the long - term factors that hold back growth. that still requires significant effort, but not necessarily from central banks. let me again quote some wise words of hans tietmeyer, that he mentioned at an event of this very wirtschaftsrat in 2006. “ es reicht [ … ] nicht aus, auf konjunkturelles wachstum zu setzen. es geht vielmehr darum, die strukturprobleme [ … ] nachhaltig zu losen. nur so erreichen wir ein nachhaltig hoheres wirtschaftswachstum, nachhaltig mehr beschaftigung, nachhaltig stabile sozialsysteme und offentliche finanzen. ” ich danke ihnen fur ihre aufmerksamkeit. 8 / 15

has had to take far - reaching measures. we have lowered our main policy rates substantially, even into negative territory, to stimulate consumption and investment. moreover, several non - standard monetary policy measures were taken to bolster the pass - through of low policy rates when tensions in financial markets persisted. in spite of these policy actions, over the course of 2014, the outlook for inflation was deteriorating. even though the fall in inflation partly reflected a sharp drop in oil prices, persisting cyclical underperformance also played a role. there were fears that low inflation expectations would become self - fulfilling, with concerns about downward deflationary spirals as we haven ’ t seen since the 1930s. given that the policy rates were close to their lower bound, in 2015 the eurosystem launched an asset purchase programme to provide further monetary policy accommodation and fight low inflation ; a policy better known as qe. by lowering long - term interest rates, our asset purchases have helped to further loosen financing conditions for households and firms. this in turn should have a positive impact on their spending decisions, and ultimately on inflation – but the exact impact on output and inflation is more uncertain. 2 / 15 monetary policy stretched to its limits all in all, monetary policy has truly been stretched to its limits to achieve price stability in the face of negative economic shocks. there has even been some public discussion on whether the ecb has over - stretched its mandate. in particular, some question the legitimacy of public asset purchases as a monetary policy tool. in my opinion, and this is confirmed by the eu court of justice, asset purchases are a legitimate albeit non - standard monetary tool, provided that the ecb complies with the limits and restrictions as set out in the treaty. examples of such restrictions are the prohibition of monetary financing and the requirement that the eurosystem shall act in accordance with the principle of an open market economy. to make sure that we act within this legal framework, we have set up several safeguards. one important safeguard is that we have introduced limits on the share of outstanding securities we can buy from a given issuance. these limits prevent us from becoming a dominant creditor of euro area governments and help to safeguard the functioning of the market. in our december meeting the legal importance of maintaining these limits has been reconfirmed. non - standard measures not without side - effects of course, the fact that a certain monetary tool is available to us doesn ’ t mean that its use is always automatically justified.