Mr. Gabriel Makhlouf:

We have, for the past decade or so, lived in an extraordinary time of accommodative monetary policy. Interest rates have been very low. It has not been a normal time. One of the risks is that people feel that this is a normal world to be living in when in the history of our economies, it is a very unusual period. When the governing council of the ECB met in December and announced it was going to cease its pandemic emergency purchase programme at the end of this month, that was a signal that we were starting to normalise monetary policy. In my view, and that of the governing council, that process will be gradual rather than rapid. When we met a few weeks ago, we took some further steps that reinforced the proposition that we would move gradually and look carefully at the data, the evidence of what was happening in the economy. We reconfirmed that our asset purchase programme would end before interest rates went up. We said that interest rates would go up but we are not giving an indication of a timescale for that, nor are we saying where interest rates may end up. Since we last met, events in Ukraine have clouded the picture significantly.

One thing we can be sure of is that the European Central Bank, ECB, is absolutely focused on its mandate of price stability, which we define as maintaining inflation at 2% over the medium-term. We will take whatever action is necessary, but actually predicting today exactly what action we will take and when is too difficult. We will be very data dependent and we are going to try to maintain as much optionality in our decision-making as we can.