Mr. Ajai Chopra:

Okay. Remember, the ECB is the lender of last resort for the euro area.

So, it is perfectly within the rights of a creditor such as the ECB as ... in its lender of last resort function to ask about the viability and solvency of the banks that it is supporting, and it is perfectly within the rights of the ECB to ask about how the problems of these banks are going to be addressed. In addition, I think it is fine for the ECB and its senior management to say that if the sovereign cannot borrow on the market to recapitalise banks, then the sovereign, in this case Ireland, should seek international support from the EU and the IMF. So those things, I think, are perfectly within the rights of a lender of last resort.

But, in my view, ultimatums are not the right way to conduct business amongst euro area members and institutions, and we've seen that such ultimatums were delivered in the case of Ireland, through the letters that you've mentioned, and also we've seen them recently in the case of Greece. Furthermore, and I'm coming back to the letters, discussing fiscal policy and structural reforms, in my view, goes beyond the ECB's mandate and is not appropriate. There's a broader issue over here in my view. The ECB during this crisis - the first several years of this crisis - were central in pushing the agenda of deflationary structural reforms as the solution to the eurozone crisis, instead of demand stimulus. This resulted in asymmetric adjustment. What I mean is that it resulted in excessive emphasis on deflationary internal devaluation while the ECB chronically failed to meet its 2% inflation target.

The eurozone, and the ECB was ... as a key institution in this regard, emphasised supply side policies when the real problem in the eurozone was deficient demand. It took a long time before the policy mix changed. The policy mix is now improved but, in my view, it's not enough. Too much of a burden is being put on monetary policy, and a neutral fiscal stance for the euro area, which it now is - for a while it was contractionary - is not appropriate. So I think you need to see my comments about this letter in this broader context of whether ultimatums are appropriate in discussions amongst euro area members and in the context of the macroeconomic policy mix and the ECB not meeting its own inflation mandate.