fiscal policy. they did not do enough to stabilise public finances and did not reform their economies. that is why there is now a problem of credibility. france is a special case. unlike most crisis countries, it has always enjoyed favourable financial conditions, such as low long - term interest rates. so you can ’ t say that france was a victim of high interest rates. what can germany do? germany recently decided to lower the retirement age for some groups and to introduce a minimum wage. entrepreneurs say that the reforms are weighing negatively on the investment climate. there was some complacency. germany must now ask itself : how do we stay competitive over the next ten years. there is now much debate on the excessively low level of investment. germany has some room to relax its fiscal policy without jeopardising stability in the medium term. it can use that scope to step up investment. i am always surprised that the united states takes a completely different approach than europe. some us policymakers say that we should forget about structural reforms in the current circumstances ; we should only support demand and should not scare people with structural reforms. that is not what we believe in europe, although it is of course true that market flexibility in the united states is far greater than in europe. bis central bankers ’ speeches what is your view of the new belgian government ’ s plans? now that i have a european mandate, i am, in a manner of speaking, no longer a belgian. in theory, i can take a neutral standpoint. but nobody will believe that i ’ m no longer a belgian. i still read belgian newspapers and also take a professional interest in belgium. i am a displaced european. i look at belgium as i would at any other country. belgium has used the small fiscal margin cautiously. just as for other countries, it ’ s good to announce all reforms at the start of the cabinet term and then to implement them properly. what is your general assessment of the results? are they better or worse than you expected? given that banks since july 2013, in the run - up to the publication of the results of the comprehensive assessment, have already taken more than 200 bln in balance sheet repairing measures, the result is more or less what was to be expected. at the same time, this test is only a very good first step and the results will be taken into consideration in the day - to - day supervision which the ecb will conduct as of 4 november. will the

peter praet : interview in de tijd and l ’ echo interview with mr peter praet, member of the executive board of the european central bank, in de tijd and l ’ echo, conducted by mr wouter vervenne and mr marc lambrechts, and published on 28 october 2014. * * * growth in the euro area has come to a standstill. when should we expect a revival? we are now seeing a loss of momentum. it is striking that growth is abating in an early phase of the business cycle. we take that seriously, but we shouldn ’ t exaggerate : our base scenario for a gradual economic recovery is still realistic. the risks have increased and deserve our attention. regarding recent developments, the widest gap between expectations and reality was seen in germany. france was weak and has remained so. growth projections for germany have been lowered, for both 2014 and 2015. the weakness there reflects the slowdown in trade with china and brazil and the impact of the ukrainian crisis, but also technical factors such as a higher than usual number of days leave in the motor industry. we can ’ t ignore the feeble economic climate. that is one of the reasons why we took measures in june and september and further loosened monetary policy. but we shouldn ’ t over - dramatise. so you don ’ t fear a recession? no, i wouldn ’ t say that. confidence indicators for the third and fourth quarter suggest marginal growth in the euro area. that is rather worrying, as the momentum is certainly not strong enough for self - sustaining growth. meanwhile, inflation and inflation expectations are still falling. is there a likelihood of deflation? the risk of deflation is limited. i find it difficult to accept the high probability of deflation ( 30 % ) published by the international monetary fund for the euro area. our models come up with much lower figures. but we do need to be vigilant. a prolonged period of low inflation harbours the risk that an economic shock may trigger negative inflation. if you ’ re hovering close to zero and you experience a new shock, the risk of negative inflation is by no means negligible. falling oil prices exacerbate the risk of deflation that ’ s a concern, but what matters are the inflation expectations for the medium term. is the decline in oil prices temporary or lasting? the fall in oil prices is bringing general inflation down, but the impact also depends on the rate