confidence and preventing economic activity? that is absolutely right : you can see it in the numbers, you can see it in the lack of investment that we have today in europe. we want investment to come back and investment is about confidence. investment is about animal spirits, so you need these animal spirits to gather and to show up. and for that, you need reforms in countries. there are very high expectations for europe – people want to be in europe, they want europe to deliver jobs, they want europe to deliver reforms. we ’ ve got to live up to these expectations. how do you deliver that message from an ecb perspective? well, the first thing the ecb has to do is to just do our job, which is to bring inflation back towards 2 % and to create an environment that makes it possible to invest and to reform. that environment is there now. the ecb is not going to create projects, the ecb is not going to create jobs. we create the environment, and the governments have to get their act together and reform. the governments have to make tax reforms and regulatory reforms and instil confidence in the business community. we ’ ve had two very interesting political outcomes recently : alexis tsipras easily survived a no - confidence vote this week, and we also have seen, of course, a proausterity minister return in portugal. what do you think that tells us about how europeans feel about their economic future? bis central bankers ’ speeches well, obviously, i don ’ t want to pass judgement on political outcomes. but what we can see is that the people of europe understand the need for reforms. it has to be done differently in different countries and different environments, but there is a need for reform that is very well understood. but is it a reflection of, perhaps, people ’ s improving incomes or the fact that they feel financially better off? they feel better because the whole environment is better than it was only one year ago or six months ago. we are moving out of a crisis, and the conditions are here for recovery to kick off, to accelerate, and this is understood. but now people have to create the right projects, they have to invest and they have to create jobs. and that is not something the ecb will do or can do. let ’ s talk about what the ecb can do for a moment here, because the markets are now very much looking at china, its impact on germany and wider europe and the

of 2003, though only slowly. at the same time, the growth of loans to the private sector has been edging up. both monetary and credit growth seem to be supported by the low level of interest rates prevailing in the euro area and may also reflect the improvement in the economic environment since the summer of 2003. given the strong m3 growth over the past few years, there is currently more liquidity in the euro area than is needed to finance non - inflationary growth. the effects of this high liquidity on inflation over the medium term will greatly depend on future developments in the economy and financial markets. should excess liquidity persist, it could lead to inflationary pressures over the medium term. to conclude, the economic analysis continues to indicate that the outlook for price developments in the medium term is in line with price stability. cross - checking with the monetary analysis does not alter this picture. let me also make a few remarks on other policies in the euro area. with regard to fiscal policies, the governing council sees continued reasons for concern. recent information indicates that significant imbalances are emerging in a growing number of countries and that current policies would not be sufficient to attain the consolidation objectives specified in the latest stability programmes. we strongly urge governments to take corrective action in a timely and sustained fashion, where and when necessary. finally, with regard to structural reforms, the governing council welcomed the presidency conclusions of last weekend ’ s brussels european council. structural reforms are necessary to meet the lisbon challenge and thus reap the benefits of higher sustainable growth and employment. as pointed out by the european council, the pace of reform needs to be significantly stepped up and the critical issue now is the need for better implementation of commitments already made. ending the political uncertainty and delays surrounding the implementation of sustainable fiscal policies and effective structural reforms would indeed support private sector confidence, which would add momentum to the economic recovery in the euro area, given the supportive stance of monetary policy. we are now at your disposal for questions.