bank of canada, we spend a lot of time thinking about confidence, because it is important to the conduct of monetary policy, which is focused on inflation targeting. we aim to keep the trend of inflation at the 2 per cent target midpoint of a 1 to 3 per cent range. when the trend strays away from that midpoint, either upwards or downwards, we take action to return it to 2 per cent over the medium term. we do that by adjusting our target for the overnight interest rate. over the past decade or so, we have successfully kept inflation at around 2 per cent, on average. here ’ s where the confidence factor enters into the equation : canadians now expect that inflation will stay near the target - not just for the near term, but into the future. they believe that the value of their earnings and savings won ’ t be eroded by inflation and that the real burden of their debt won ’ t be increased by deflation. that confidence has paid a real dividend in terms of monetary policy effectiveness. inflation targeting works best when canadians believe that it will work - in other words, when they have confidence that we will keep inflation near the 2 per cent target. with this confidence, inflation and inflation expectations, as well as interest rates, have become more stable - and this benefits the whole economy. how did we achieve this confidence dividend? by establishing a track record of credible, consistent monetary policy, together with greater accountability and transparency. like many other major central banks, we have embraced the notion that monetary policy is more effective when people can understand what their central bank is doing and why. that is the motivation behind our semi - annual monetary policy reports and updates, our eight interest rate announcements every year, and our many public appearances and speeches. of course, monetary policy does not function in isolation. it works best when it is complemented by fiscal policies aimed at avoiding deficits and lightening government debt burdens. reducing, and ultimately eliminating, the federal deficit in the 1990s helped canada ’ s international credibility, lowered the risk premium demanded by investors, and gave canada more flexibility to adjust to changing economic circumstances. and continued fiscal prudence has given us the flexibility to weather the recent economic turmoil rather well. canadians have now seen the benefits of low, stable, and predictable inflation, and balanced budgets. and they expect that their central bank and their governments will continue to deliver those benefits through responsible monetary policy and prudent fiscal management. confidence in markets so, good

euro area economy. fiscal measures taken in response to the pandemic emergency should as much as possible be targeted and temporary in nature. the three safety nets endorsed by the european council for workers, businesses and sovereigns, amounting to a total of €540 billion, provide important funding support in this context. the governing council also strongly welcomes the next generation eu package of €750 billion, which has the potential to significantly support the regions and sectors hardest hit by the pandemic, strengthen the single market and build a lasting and prosperous recovery. in order to fully reach its potential, the package will need to be firmly rooted in sound structural policies conceived and implemented at the national level. well - designed structural policies could contribute to a faster, stronger and more uniform recovery from the crisis, thereby supporting the effectiveness of monetary policy in the euro area. targeted structural policies are particularly important to revitalise our economies, with a focus on boosting investment in priority areas such as the green and digital transitions. we are now ready to take your questions. 3 / 3 bis central bankers'speeches