Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference today. We will now report on the outcome of today’s meeting of the Governing Council.
Based on its regular economic and monetary analyses, the Governing Council decided to leave the key ECB interest rates unchanged. The current rates remain appropriate. Taking into account all the information and analyses that have become available since our meeting on 14 January 2010, price developments are expected to remain subdued over the policy-relevant horizon. The latest information has also confirmed that euro area economic activity continued to expand around the turn of the year. Looking ahead, the Governing Council expects the euro area economy to grow at a moderate pace in 2010. The recovery process is likely to be uneven and the outlook remains subject to uncertainty. The outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term. All in all, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. Medium to longer-term inflation expectations remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term.
Let me now explain our assessment in greater detail, starting with the economic analysis. The latest information confirms that economic activity in the euro area continued to expand around the turn of the year. The euro area has been benefiting from a turn in the inventory cycle and a recovery in exports, as well as from the significant macroeconomic stimulus under way and the measures adopted to restore the functioning of the financial system. However, these stimuli will unwind over time, while activity is likely to be adversely affected by the ongoing process of balance sheet adjustment in the financial and non-financial sectors, both inside and outside the euro area. In addition, low capacity utilisation rates are likely to dampen investment, and unemployment in the euro area is expected to increase somewhat further, thereby lowering consumption growth. For these reasons, the euro area economy is expected to grow only at a moderate pace in 2010 and the recovery process could be uneven.
The Governing Council continues to view the risks to this outlook as broadly balanced. On the upside, confidence may improve more than expected, and both the global economy and foreign trade may recover more strongly than projected. Furthermore, there may be stronger than anticipated effects stemming from the extensive macroeconomic stimulus being provided and from other policy measures taken. On the downside, concerns remain relating to a stronger or more protracted than expected negative feedback loop between the real economy and the financial sector, renewed increases in oil and other commodity prices, the intensification of protectionist pressures and the possibility of a disorderly correction of global imbalances.
With regard to price developments, euro area annual HICP inflation increased further in January 2010 to stand at 1.0%, according to Eurostat’s flash estimate, after 0.9% in December 2009. Inflation is expected to be around 1% in the near term and to remain moderate over the policy-relevant horizon. In line with a slow recovery in demand in the euro area and elsewhere, overall price, cost and wage developments are expected to stay subdued. In this context, it is important to emphasise that inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term.
Risks to this outlook remain broadly balanced. They relate, in particular, to the further development of economic activity and the evolution of commodity prices. Furthermore, increases in indirect taxation and administered prices may be stronger than currently expected, owing to the need for fiscal consolidation in the coming years.
Turning to the monetary analysis, the annual growth rate of M3 remained negative in December 2009, standing at -0.2%. In the same period, annual growth in loans to the private sector was zero. These data continue to support our assessment of a moderate underlying pace of monetary expansion and low inflationary pressures over the medium term. Actual monetary developments are likely to be weaker than the underlying pace of monetary expansion, owing to the downward impact of the rather steep yield curve. Looking ahead, M3 and credit growth is likely to remain weak for some time to come.
The prevailing interest rate constellation continues to have a strong influence on both the level and composition of annual M3 growth. On the one hand, the low rates of remuneration on short-term bank deposits foster the allocation of funds away from M3 and into longer-term deposits and securities. On the other hand, the narrow spreads between the interest rates paid on different short-term deposits imply a low opportunity cost of holding funds in the most liquid components included in M1, which continued to grow at a robust annual rate of more than 12% in December.
The zero annual growth rate of bank loans to the private sector reflects a further increase in the growth in loans to households, while the annual growth in loans to non-financial corporations moved further into negative territory. Such divergence remains in line with business cycle regularities. The ongoing contraction in the outstanding amounts of loans to non-financial corporations continues to be accounted for entirely by a strong net redemption of loans with a short maturity. For the sector as a whole, the overall contraction may be due partly to substitution with market-based financing.
Given the typical lags between turning points in economic activity and those in the demand for bank loans, growth in loans can be expected to remain weak over the months to come. In the meantime, the real cost of external financing for non-financial enterprises has declined further, while the net tightening of credit standards applied by banks has continued to diminish, as indicated by the Bank Lending Survey for the last quarter of 2009. At the same time, banks have continued to reduce the size of their overall balance sheets over the past few months. In this respect, the challenge remains for banks to adjust the size and structure of their balance sheets while ensuring the availability of credit to the non-financial sector. To address this challenge, banks should use the improved funding conditions to strengthen their capital bases further and, where necessary, take full advantage of government support measures for recapitalisation. This is important to facilitate access to finance, especially for those enterprises that do not have recourse to market-based financing.
To sum up, the current key ECB interest rates remain appropriate. Taking into account all the information and analyses that have become available since our meeting on 14 January 2010, price developments are expected to remain subdued over the policy-relevant horizon. The latest information has also confirmed that euro area economic activity continued to expand around the turn of the year. Looking ahead, the Governing Council expects the euro area economy to grow at a moderate pace in 2010. The recovery process is likely to be uneven and the outlook remains subject to uncertainty. A cross-check of the outcome of the economic analysis with that of the monetary analysis confirms the assessment of low inflationary pressure over the medium term. All in all, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. Medium to longer-term inflation expectations remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term.
We will continue our enhanced credit support to the banking system, while taking into account the ongoing improvement in financial market conditions and avoiding distortions associated with maintaining non-standard measures for too long. The Governing Council will, in early March, take decisions on the continued implementation of the gradual phasing-out of the extraordinary liquidity measures that are not needed to the same extent as in the past. In order to counter effectively any threat to price stability over the medium to longer term, the liquidity provided will be absorbed when necessary. Accordingly, we will continue to monitor very closely all developments over the period ahead.
As regards fiscal policies, many euro area countries are faced with large, sharply rising fiscal imbalances, leading to less favourable medium and long-term interest rates and lower levels of private investment. Moreover, high levels of public deficit and debt place an additional burden on monetary policy and undermine the Stability and Growth Pact as a key pillar of Economic and Monetary Union. Against this background, it is of paramount importance that the stability programme of each euro area country clearly defines the fiscal exit and consolidation strategies for the period ahead. Countries will be required to meet their commitments under the excessive deficit procedures. Consolidation of public finances should start in 2011 at the latest and will have to exceed substantially the annual adjustment of 0.5% of GDP set as a minimum requirement by the Stability and Growth Pact. A strong focus on expenditure reforms is needed.
The key challenge in order to reinforce sustainable growth and job creation is to accelerate structural reforms, as the financial crisis has negatively affected the productive capacity of our economies. In the case of product markets, policies that enhance competition and innovation are urgently needed to speed up restructuring and investment and to create new business opportunities. In labour markets, moderate wage-setting, effective incentives to work and sufficient labour market flexibility are required in order to avoid significantly higher structural unemployment over the coming years. Finally, an appropriate restructuring of the banking sector should play an important role. Sound balance sheets, effective risk management and transparent, robust business models are key to strengthening banks’ resilience to shocks, thereby laying the foundations for sustainable growth and financial stability.
We are now at your disposal for questions.* * *
Question: My first question is about the situation of Greece: how confident are you that Greece will meet the targets that they have set in their very substantial programme? My second question is: the markets have certainly more than priced in the risk stemming from Greece to euro zone stability, they have priced in possible contagion effects from other countries; how concerned are you that Greece is only the proverbial tip of a fiscal iceberg, and that other countries, like Spain and Portugal, might face (maybe not) such drastic but similar problems? And thirdly, when you are looking at the inflation scenario, price stability certainly seems to be safe enough stemming from the real economy, but how concerned are you that the deterioration of fiscal deficit situations might indeed produce an inflationary risk some time in the future, which you might have to rein in, if governments do not?
Trichet: In reply to your first question on Greece, I would say that the position of the ECB is the following: the ECB Governing Council approves of the medium-term goal that has been fixed by the Greek government, to get the public finance deficit back to less than 3% as a proportion of GDP in 2012. Now, we expect and we are confident that the Greek government will take all the decisions that will permit it to reach that goal. In this respect, the measures taken last Tuesday, namely the taxation on oil, the freezing of wages in the public sector and the pension reform, are steps in the right direction. In any case, the deficit targeted for 2010 has to be attained, as well as the final goal of less than 3% in 2012. This strategy is crucial for medium-term sustainable growth and job creation in Greece. That is what I had to say on Greece.
On other countries and on Greece, you could see in the introductory remarks what the Governing Council had said. It is a very strong goal of having to fully respect the Stability and Growth Pact, and fully respect the excessive deficit procedure. And you know that each country has its own goal in terms of going down to below 3%. And we consider, of course, that all this is crucial. You know that we have always been inflexible in our defence of the Stability and Growth Pact. Even at a time when we had some countries (in 2004 for instance and also a little bit in 2005) that were calling for significant alleviation of the constraints of the Pact, we always said that we are in an economic and monetary union. We are ourselves responsible for the monetary union part of it. The main pillar of the economic union is the Stability and Growth Pact. And the least I can say is that we have been vindicated in this respect. Let me also say that, looking at the euro area, there is very often a misunderstanding. A lot of people imagine that you have this kind of sequence: you have problems and you get help, and conditionality comes with the help. This is the normal case for a country which is not in the euro area, which is in the rest of the world. In the euro area, the situation is very different: you have ex-ante (not ex-post) help because you are in the euro area, then you have an easy inbuilt financing of the current account deficit. We have seen that functioning extremely well over the years: very easy financing of the current account deficit, which is the kind of help given by international financial institutions. But it is given ex ante, in our case, and the conditionality is also ex ante. It is, in particular, the Stability and Growth Pact, namely the Commission’s work on checking the quality and the level of soundness which is embedded in the fiscal policies and, on that basis, the peer’s surveillance with the relevant peer’s decision where needed. And that is the reason why we call for the Stability and Growth Pact to be strictly respected in all circumstances.
In response to your question on fiscal issues, the Governing Council considered that loose fiscal policy can overburden the monetary policy at the level of the euro area as a whole. But now I will surprise most of you: do you know what the consolidated public finance deficit of the euro area is? All countries taken into account – and you know that when we reflect on monetary policy, we have to take into account the 330 million people and the 16 countries – this deficit should be around 6% of GDP in 2010, according to the IMF. Allow me to mention what it is for other major industrialised countries: it will probably be a little bit more than 10% for the US according to the IMF, and also a little bit more than 10% for Japan, which is more than 4% above the consolidated fiscal deficit of the euro area. And you can find other important industrialised countries with deficits that are even higher than 10%. So I mention that en passant to say very clearly that it is not because, according to the IMF, we have at a consolidated level only 6% in the present circumstances that we consider that it is acceptable. It is a potential burden on the monetary policy and we call for strict implementation of the Stability and Growth Pact and of the excessive deficit procedure goals. The stability programmes will also be examined. They were due to be submitted before the end of January and this was done in practically all cases, as you might know.
Thank you very much for very good questions indeed.
Question: You have just said you are confident that the Greek government will take the right decisions or is going in the right direction. But if you look at the figures, the Greek government’s budget consolidation plan assumes economic growth of 1.5% in 2011, and 1.9% and 2.5% in 2012 and 2013 respectively. Do you really think that is realistic? And did you discuss at today’s meeting the further withdrawal of your non-standard liquidity support – in particular the full allotment procedure in your refinancing operations? And a last question on Greece, Portugal and Spain: do you think Portugal and Spain have to make the same effort as Greece to consolidate?
Trichet: Thank you very much for your questions. On Greece, I have said what I have to say. They have to reach the goals that they have set themselves. This is absolutely crucial, and we expect and are confident that they will take the measures, such as those taken last Tuesday, that will allow them to reach their goal. That is fundamental. It is our position. I was very clear on that. As regards the procedure for the withdrawal of the non-standard measures, I will see you again after our next monetary policy meeting in early March, as I have said. At that meeting we will take the decision that you are waiting for regarding the second quarter. And as you know, we are now implementing the decision that we took for the first quarter. As regards the third point, again I will not single out any countries. I will just say that all countries will have to fully respect what has been decided upon in the excessive deficit procedures. We ourselves will be alert – as will be the Commission – in ensuring that this commitment is respected by all countries, without exception .
Question : I would like to know whether you have discussed the interest rate for the six-month operation in March and whether this operation will track the main refinancing rate. And could the ECB go back to auctions in the second quarter or the second half of the year?
Trichet: I will see you in one month’s time and tell you what we will do. As you know, we have already decided that this will be the last six-month refinancing operation, but as regards the details you are asking for, you will have them next month.
Question: Jean-Claude Juncker recently said that the euro is overvalued. Do you share his assessment? And Almunia yesterday rejected the idea of IMF help for Greece and said that the EU and the euro area have enough instruments to solve potential problems. Do you agree with him? And if so, what potential instruments do you see? And finally, you have called for both coordinated and quick reforms to the financial system. Given the difficulties of coordination, do you not think that there might be a trade-off between the two? And if so, which of the two should take priority – speed or coordination?
Trichet: I do not participate in the game of commenting on the comments of others. I am here representing the Governing Council’s position. On exchange rates, you know what I have to say, which is very clear. I appreciate enormously the fact that the US authorities are themselves saying that a strong dollar vis-à-vis the other major floating currencies is in the interests of the United States. And I believe that it is in the interests of the United States, as well as in the interests of the rest of the world, including Europe. As regards the second question, I have already responded to that in stressing the point – which was not necessarily known by all of us – that in our case, belonging to the euro area means that you have, ex ante, considerable help. In terms of GDP, I will let you do the calculations showing the kind of easy financing of the balance of payments deficit experienced by members of the euro area. So, ex ante help and ex ante conditionality. This conditionality is enshrined in the Stability and Growth Pact, following a proposal from the Commission to the peers. And such peer assessment, peer judgement and peer decisions – including decisions on possible sanctions – are at the heart of the Stability and Growth Pact. As regards the overall lessons to be learnt from the global crisis, we have an agreement at the global level on the methodology and on the main avenues to pursue our work, and we are working very actively. I always call for ideas, which could be interesting, that are submitted to the international community by different countries to be examined and studied very professionally, actively and rapidly, because the international community requires us to be reasonably expeditious. We have the G20, we have the Financial Stability Board, we have the various working groups, including, of course, the Basel Committee – but not just the Basel Committee: all of this has been agreed upon by the industrialised countries and by the emerging countries, and I think that this consensus is a major asset in this very difficult crisis we have to cope with. It is a major asset that the entire world – all the systemically important countries, whether industrialised or emerging – have agreed upon the methodology and the main avenues that we have to pursue to be sure that the system is much more resilient in the future than it was in the past.
Question: Question: I have a question about euro zone enlargement. Can Estonia’s high unemployment rate become an obstacle to Estonia joining the euro zone at the beginning of next year? And, in which ways may unemployment impact the eventual exchange rate between the Estonian kroon and the euro?
Trichet: I would only say that there are a number of criteria. The unemployment criterion is not on the list of criteria that we will have to examine. What is important for us is that all those criteria which we have to examine are met. There is also the Treaty obligation that these criteria have to be met not only at the moment of the examination but also on a sustainable basis. That is what is absolutely essential, and always has been, in the eyes of the Governing Council. The criteria have to be met not only today but on a sustainable basis. This is true not just for Estonia but for all countries, of course.
Question: Mr Trichet, last month you said that the difficulty in Greece had to be kept in perspective. Given that you’ve also stressed today the ex-ante help that the euro zone provides to countries, given that you’ve described as absurd the idea of the euro zone breaking up, do you think that bond markets are overpricing the risks currently associated with countries such as Spain, Portugal and Greece?
Trichet : I never comment on the market itself. I think that it is not necessarily very well known how solid the euro area actually is – the concept of the euro area. I, myself, have, over 20 years, had to explain tirelessly, on a lot of occasions, what we have been doing. So, I have no further comments to make. Let me only mention the fact that the euro area, as a concept, is in the position I have already underlined and, for the euro area as a whole, we are in a situation which compares very flatteringly with a number of industrialised countries. This is not an excuse to become complacent. We have a track record of absence of complacency and we will continue on that path.
Question: I have to come back to Greece, again, just to put it at a bit more general level. In what way and to what extent might the decision of the EU to control very closely the measures that Greece has taken? How and to what extent might this shape and change the quality of EMU? Because, of course, Greece, in a way, is giving up certain sovereignty in terms of budget discipline, if you want, or at least control of the EU. So, the question again: is that not changing the face of EMU?
Trichet: I am not responding on Greece, as your question was not on Greece but on all countries. The Stability and Growth Pact is a framework that applies what is in the Treaty itself, which is very strong. Because the peers enlightened by the Commission and observed by us have to decide whether a situation is abnormal and which kind of decision should be taken. If the recommendations are not followed by facts and by real decisions, there are sanctions, which would be decided by peers. So the system is very constraining. When you share a single currency with others, the counterpart is that you have to have a sound fiscal policy. It’s been said since the very beginning and there is nothing new there. I said all that myself when, at the time, there was some teasing of the concept of the Stability and Growth Pact. A number of us might have a very vivid memory of that. There was a strong call to weaken the Stability and Growth Pact. We said “No!”. It is a crucial part of EMU and there is nothing new in what happens now. It is the implementation of what is required by the Pact.
Question: The Irish Finance Minister, in his budget speech, declared that the worst was over for Ireland. Yet a very recent opinion poll found that a majority of people do not believe him. Is the Minister right, or are people right to be sceptical?
Trichet: With Ireland being an English-speaking country, we rely very much in our rhetoric in English on the suggestions which are given by the Irish governor and Irish friends. I will say that we all have to remain alert, permanently. This is no time for complacency. But let me also add that the decisions that have been taken by the Irish government to put its house in order have been very impressive. I believe that they were right, and I take it that this is probably what the Minister of Finance was alluding to.
Question: Mr Trichet, do you see the risk that rising risk premia for sovereign bonds of some countries could bring back turmoil to the banking system?
Trichet: Strict implementation of the Stability and Growth Pact and of the excessive deficit procedures is crucial. I have no other comment. Of course, it is better to have low treasury interest rates than to have higher treasury interest rates. This is true, and this is the way you are rewarded when you do the job.
Question: I have two questions. First question: do you think that the recent decline in the euro is threatening to become disorderly? And why or why not? And my second question is: what is your assessment of the speed of Germany’s economic recovery? Thank you.
Trichet: I already responded to the exchange rate question. On Germany, I look with my colleagues, including the central bank governors, at the euro area as a whole, the 330 million people. Germany represents a very important part of the euro area, and so attention is of course paid to this particular economy. I think what we can say is that this country protected itself in the very difficult situation in which we were all put, particularly on the employment front, in a way which is quite impressive. We are all reflecting, not only in Europe but also at the global level, on the different behaviours that we have observed from the employment angle in various countries, to understand better what dynamics are at stake and what might explain those differences. Now, we will see what happens in this country, which is very highly internationalised, which has specialisations that are important, particularly as regards capital goods, machine tools, equipment and so forth. We will see exactly what happens when we have confirmation of the growing recovery in Asia, in particular in emerging Asian countries, and in the emerging world economies altogether. I expect that in this episode of the recovery, Germany will probably have more orders and more exports, which will contribute to its growth. I respond to the question because you asked a very specific question, but I cannot embark on responding to questions on particular countries. We are looking at a continent: 330 million people, 16 countries. It is as numerous as the United States, and I doubt that, in a press conference, Ben Bernanke would have a question on Alaska or Massachusetts…
Question: Does the combination of large fiscal consolidation in the countries that have larger deficits and structural reforms imply a lengthy period of very slow growth and very low inflation, well below the average for the rest of the euro area?
Trichet: I don’t think so. In terms of sustainable growth and job creation, if you are obviously in a very bad situation, say in terms of fiscal policy, then you have no confidence in your country, and then households have no confidence, entrepreneurs have no confidence, and you cannot expect a recovery that would be satisfactory. You have to be credible in your medium-term path towards fiscal policy sustainability, and then you will gain the confidence of the households and of the entrepreneurs. When you are in a very difficult situation you cannot reason using the idea that the economy respects the usual linear model – you are in a special situation, where the main problem is to regain the confidence of your own economic agents precisely to get back to growth and job creation. And I would say the same for structural reforms. There is no particular reason why structural reforms would not help growth. Of course, they are there mainly in order to help growth in the medium and long term, but by increasing confidence they can also help in the shorter term. In any case, now that we have been examining the euro area for 11 years, we have observed that you have the same overall big business cycle at the level of the euro area as a whole, and then you have country differences compared with the business cycle of the euro area. And it is clear that those countries that were growing very fast in the past now have growth which is more modest, and those that were not necessarily growing very fast (Germany, for instance) will perhaps demonstrate that they are now growing more dynamically and actively. These oscillations are not abnormal, when you have to cope with such a large integrated economy as the euro area.
Question : What are the key issues that you want to discuss at the upcoming G7 meeting? And the second question is: could you clarify how it is that you see medium-term price stability assured, yet the mid-point of the forecast range for inflation in 2011 is 1.4%, which is far below your own definition?
Trichet: It is not customary for me to say in advance what we will discuss in the G7 meetings. I am very happy to be going so far up, to the very north of Canada. We will have just the right environment to be as cool as possible in judging the situation! I believe it is important for the industrialised countries to have this kind of opportunity for meditation, also taking into account their responsibility, including as regards the recent crisis. And we will cover the usual important issues, but let us not forget that it has been decided, and I stick very firmly to that decision, that the prime grouping for international cooperation is the G20; it is no longer the G7 in this format of ministers and governors. And I also have to say that we, central banks, fully accept that. We were even, in some respects, anticipating that in our constituency of central banks. We think that the cooperation between us now has to take place under the governance of a larger group, including the emerging countries’ central banks.
On your second question, as you know, we are delivering price stability in the medium term. The strict inflation targeters – but they have now enlarged and enriched their own initial concept – were targeting inflation in, say, approximately two years, and the policy was like a guided missile: the guided missile was modified in order to hit the target in two years’ time. So what happens for inflation in 2011 as an average is not, even for the strict inflation targeters, the target. But for us, we always said that we have a wider concept of “medium term”, and that we were not sticking to an inflation target in 24 months in our own monetary policy concept. Very often, I myself refer, as a very important indicator for the anchoring of inflationary expectations, to the “five-year forward break-even inflation rate five years ahead”, which, again, shows to what extent we are looking at the medium and longer term for ensuring that price stability in the medium term is in line with our definition. I have no problem with the present level of expectations for average inflation over the next year. I take into consideration the fact that we are in a period following the worst recession since the Second World War, and the inflationary expectations that we are looking at as the pertinent indicators confirm that we are at the level of 1.9%. It is not a secret: I can tell you that the next survey of professional forecasters will give us, for five years, 1.9%, which is a confirmation of the solid anchoring of inflationary expectations that I mentioned in the introductory statement.
Question: 1.9% for when?
Trichet: Five years.
Question: Mr Trichet, I refer to your answer to the question regarding the G7 and the G20. Is the G7 a dying thing? Because we have the G20 now − we have had it for one or two years. Why on earth are you going to the North of Canada? It is impossible that the G7 are going to do something which they will not inform the others about. The world is getting bigger. What is the purpose of the G7 now?
Trichet: It is a good question. It is not necessarily only the pleasure of being in the cool environment. Even if it is absolutely clear that the prime grouping for cooperation is the G20 − and that is very clear and fully accepted, it seems to me, by the G7, and fully accepted by the central banks, which again have themselves in some way anticipated this evolution − nevertheless, it is not absurd for the industrialised countries, which have a major responsibility in the present situation, to meet together, as do the emerging countries themselves from time to time, without claiming any global authority. Do you know where the crisis came from? It came from the industrialised world. So, I think it is not necessarily useless to have this kind of meeting. But you are absolutely right: it is of a different nature now, clearly. And there is clear-cut consensus at a global level that it is of a different nature. And I am sure that Jim Flaherty will mention that very well when he sums up the discussion in Canada.
Question: Despite the crisis, banks are making profits: Deutsche Bank made €5 billion; Banco Santander in Spain today announced a profit of €9 billion. Do these figures impress you? How do you view them in the wider context?
Trichet: First of all, obviously I prefer that the banks are making money. Because when they were losing money it created a catastrophe. We have to be consistent: we ourselves have been in a very difficult situation, because we had a terrible crisis of the financial sector. Second, profits, in our opinion, should serve not to distribute enormous amounts of dividends to shareholders; not to distribute enormous amounts of bonuses, packages, remunerations to the members of these institutions; but to reinforce their balance sheets, to reinforce their own position as financial institutions that have a role to play, which is to finance the real economy as actively as possible. By the way, I did not have too many questions on growth of credit, on the outstanding credit growth of non-financial corporations, on SMEs, and so forth. We are looking at that with enormous care and we consider that it is extremely important in the present period that there is no supply constraint on the credit allocation by the financial system to the clients, customers, enterprises and households. With regard to households, now we see that the outstanding credit is picking up again, which is of course a good sign, and we know also that the recession was such that it is not abnormal at this stage that we still have dynamics of credit which are negative as regards the non-financial corporations. All that being said, our message to the banks is very clear: it is good that you are now making money; we prefer that you make money instead of lose money, because when you were losing money it was a drama. But, do not forget that you have a duty. Our commitment as central banks to avoid the depression, and the commitment of the taxpayer, has been such that the banks have to understand that. I am sure that they will understand that. We cannot accept that we will have supply constraints in the present period.
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