Mr. Paolo Gentiloni:

We do so in what we were able to do in the past 18 months, especially with this unprecedented interplay between fiscal and monetary policy. I want to stress that this interplay came from two streams that maintained the autonomy of countries. There was not a central body governing fiscal and monetary policy but the fiscal and monetary policy worked in the same direction in member states because of their autonomy. This stabilised the markets. In this terrible 18 months we did not have turbulence in the financial markets. The banking systems were already in much better condition than they were during the previous financial crisis. We were able to support employment with extraordinary programmes. In Ireland. there was the PUP programme and other countries had programmes with different names but at the end of the day this was a way to keep jobs alive during the crisis.

We also had the European SURE mechanism to strengthen this capacity through loans. This SURE mechanism was used by 19 member states, or even if it was only based on loans a certain number of countries used it. This is no longer a general response; it is more selective but it still continues.

I am not saying I do not see risks in the future. I see that we have a reassuringly high level of growth, stability in financial markets and a better situation in the banks. What kind of downside risks can we have in this outlook and forecast? The main one remains connected to the pandemic. Here we have to recognise a great EU success. I remember well how difficult the situation was in February this year when we began the common procurement of vaccines at EU level in several countries. People were blaming the EU for some delays we had and everybody was making comparisons between the EU and the UK and the US. Now we are in September and the EU is in a much better place than other big regions of the world, although we are not happy about this.

The first risk we can see from our perspective still relates to the pandemic. We are well equipped. Some 74% of adult people in the EU are vaccinated. By the way, the percentage in Ireland is much higher. This is a good guarantee but we know that variants present a risk and that, in some parts of the world, the level of vaccination is so low, we cannot consider this issue to be completely solved.

There are also some specific difficulties arising with respect to our supply chains, the price of raw materials, the increasing price of electricity in some countries and the increasing price of housing in other countries. We have to take an accurate look. The European Commission and the European Central Bank estimate that, for the time being, the rise in the rate of inflation is fundamentally linked to temporary factors and that the rate is destined to decrease again. Of course, this differs from country to country. In some countries the rate is higher and in others it is lower. The average in the EU and the euro area is 3%. It is our assessment that this is temporary. Of course, we have to look at this and address the problems we see. I know several member states are now dealing with the problem of higher electricity prices or housing difficulties. I understand this second issue is crucial in the activity of the Parliament and Government of Ireland. This is part of the solution, however. If we do not repeat the mistake of tightening financial conditions and overreacting to temporary inflation trends, for example, and if we avoid making wrong decisions of this kind, we can steer this transition towards a more persistent level of sustainable growth. Of course we will be monitoring the trends. The ECB talked about this recently in respect of inflation. However, I believe we are on the right track and I am somewhat more optimistic about the outlook for September than I was last year.