the fiscal front. the general government deficit as a percentage of gdp was reduced by approximately 5 percentage points. the european commission and the imf, in three successive reviews, acknowledged the progress made, rendering possible the smooth inflow of funding under the financial support agreement. this averted the disastrous developments that seemed inevitable one year ago and a time margin was given to carry out the changes in the economy that, in any case, would have to be implemented, with or without the memorandum of understanding. * * * * * bis central bankers ’ speeches delays, but also objective difficulties, continue to feed market uncertainty within the past year, a lot has been achieved. however, in spite of the positive results and the great effort, the factors that generate uncertainty and feed the markets'wait - and - see attitude remain strong. first, the debt dynamics remain unfavourable, because of the size of the accumulated imbalances and because progress in adjustment has so far not been fast enough in order to reverse these dynamics quickly and decisively. second, competitiveness has improved slightly, mainly as a result of decreases in production costs. however, structural competitiveness, which is linked to the creation of a business - friendly environment, has not. furthermore, cost competitiveness gains in 2010 were small compared to the cumulative losses of the past decade. third, in spite of reforms to the functioning of the public sector, substantial improvement has yet to be made in the areas where deficits are initially generated i. e. public administration, numerous agencies, local government – or in the efficiency of tax collection. thus, fiscal adjustment, after getting off to a strong start, by early 2011 is already showing signs of fatigue and deviating from targets. in 2010, although there was a large reduction of the deficit, the initial target was missed. deviation from targets has also been recorded in the first quarter of 2011. fourth, in the area of structural changes, important legislation has been passed on the pension system, healthcare, closed - shop professions and the labour market, and in several cases there has been progress. in certain cases, however, the reforms do not go deep enough and their implementation is often delayed, either because of administrative inefficiencies or because of a reluctance to push ahead, in the face of opposition. fifth, the real economy performed worse than expected. gdp in 2010 contracted by 4. 5 %, due to a decline in private consumption by 4. 5 %, in public consumption by

introductory statement to the presidency press conference following the meeting of the g7 finance ministers and central bank governors 20. 05. 2022 | konigswinter | joachim nagel 1 introduction 2 promoting long - term growth and resilience 3 ensuring sound public finances 4 refocusing monetary policy 1 introduction ladies and gentlemen, i, too, would like to bid you a very warm welcome to the g7 ( gruppe der sieben ) presidency press conference. and i would like to add my thanks to those expressed by finance minister christian lindner. i am especially grateful to everyone who helped organise the g7 ( gruppe der sieben ) meeting and whose efforts contributed to the smooth running of events. from my point of view, this meeting of finance ministers and central bank governors has been extremely successful – an impression that i hope our guests also share. we have discussed a number of important issues in depth. finance minister lindner has already addressed our support for ukraine. of course, our talks also focused on the economic consequences of the war and the changes to the inflation environment. at the beginning of this week, for example, the european commission downgraded its forecast for euro area economic growth this year to 2. 7 % ; this figure stood at 4 % in the february projections published shortly before the war broke out. the european commission now estimates that inflation in the euro area will come to 6. 1 % this year rather than the 3. 5 % previously anticipated. today, i would like to focus on the medium to long - term fundamental aspects that we have discussed over the past two days. first, in the light of the new geopolitical situation, how can we strengthen the long - term growth and resilience of our economies? second, looking ahead, how can fiscal policy navigate the conflict between the current challenges and rising debt levels? and third, what needs to be taken into account when refocusing monetary policy? 2 promoting long - term growth and resilience russia ’ s war of aggression on ukraine has changed the geopolitical landscape. policymakers and economists are striving to reduce, diversify or focus economic dependencies on safe trading partners. this shift may come at a cost to efficiency and productivity, which is something we will probably have to accept to some extent. that said, however, we should make all the more effort to promote open markets wherever possible and continue to exploit their advantages. greater resilience and strong integration into the