, but the war is eroding growth ] russia ’ s brutal, illegal war in ukraine has profoundly transformed the european security order, as well as the economic policy landscape, with global ramifications. as an expression of europe ’ s firm support of ukraine, the european commission yesterday recommended candidate status for ukraine, which is a critical, major step in ukraine ’ s journey towards eu membership – and i assume the eu leaders will soon endorse it. before the war broke out, the eurozone economy had recovered from the pandemic better than expected. while russia ’ s share of the world economy is small, knock - on effects of the war are amplifying the supply bottlenecks and impacting energy, commodity and food prices. these headwinds will weigh on confidence and dampen growth in the near term, but once they abate, economic activity is expected to pick up again. the ecb ’ s latest eurozone projections forecast annual real gdp growth of 2. 8 % in 2022, 2. 1 % in 2023 and 2. 1 % in 2024. like in the us, the inflation outlook is ever more challenging for the eurozone, with headline inflation accelerating above 8 % in may. [ slide # 3 inflation dynamics – a driver and an anchor ] currently, we have a very clear driver and likewise a very clear anchor for inflation dynamics in the eurozone. the driver is of course energy inflation, as fuel prices have steeply increased since the summer of 2021. the anchor is a relatively moderate level of wage inflation – at least until recently. let me elaborate in a bit more detail on these. [ slide # 4 inflation on the rise in the eurozone – energy inflation explains ] while eurozone inflation has risen mainly because of surging energy and food prices, inflationary pressures have recently broadened and intensified. the latest ecb projections forecast an annual eurozone inflation rate of 6. 8 % in 2022, after which it is projected to decline to 3. 5 % in 2023 and to 2. 1 % in 2024. headline inflation at the end of the projection horizon is thus expected to be only slightly above the ecb ’ s target of 2 %. it must be underlined that energy inflation and supply chain bottlenecks alone would not lead to a sustained acceleration in inflation. in the medium term, the critical question is whether rising energy prices will increase inflation expectations and wage demands, leading to a wage - price

had already steadily weakened against major currencies in the second half of 2014. furthermore, at the start of 2015, there were signs of further easing of monetary policy in the euro area. against this backdrop, the euro was expected to weaken further. in contrast to 2011, the environment at the beginning of 2015 was no longer characterised by swiss franc strength, but by broadbased euro weakness. in these circumstances, the minimum exchange rate was no longer sustainable. the snb could only have enforced it through ongoing foreign currency purchases of rapidly increasing magnitude. however, there would still have been no prospect of a long - term stabilisation of the situation. an uncontrolled expansion of the balance sheet would have compromised the snb ’ s bis central bankers ’ speeches ability to conduct monetary policy in the long term. continuing to uphold the minimum exchange rate was therefore no longer justifiable. delaying any decision to discontinue would also not have helped the situation. on the contrary, if we had not faced facts and had delayed abandoning the minimum rate, the turbulence on the foreign exchange markets would have been no less severe. the impact on the economy would have been just as great, while the losses on the foreign exchange reserves would have been considerably heavier. the swiss franc initially appreciated sharply on 15 january 2015. in the meantime, it has broadly declined, although it is still considerably stronger against the euro than before discontinuation. this is attributable to the persistent weakness of the euro. developments since january 2015 have confirmed that our assessment at the time was correct. current situation the discontinuation of the minimum exchange rate marked a shift in our monetary policy focus. it is now based on two key elements. the first is the negative interest rate, which is currently – 0. 75 %. this is charged on sight deposits held at the snb by banks and other financial market participants. the second is our willingness to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration. our monetary policy is thus expansionary and aimed at easing pressure on the swiss franc, thereby ensuring price stability in the medium term. many feared a recession on the back of the discontinuation of the minimum exchange rate and the rapid appreciation of the swiss franc. yet our economy grew by 0. 9 % last year. this may not be a strong growth rate, but it is still a good sign. on the one hand, it