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PRESS RELEASE

Statement of the Governing Council following the start of military action in Iraq

20 March 2003

Military action in Iraq has started. The Governing Council has again discussed the economic situation in light of the tense geopolitical environment. It stands ready to act if necessary. Financial markets can rely on the provision of sufficient liquidity even under exceptional circumstances, as was demonstrated in the past.

The impact of this military confrontation on the global economy can vary significantly in scope and size, depending on the extent and duration of the conflict. It is therefore not possible at this juncture to conclusively assess the short and medium-term implications for the euro area.

In times of severe tension, it is of the utmost importance that policymakers do not lose sight of their primary responsibility, so as to reduce uncertainty and strengthen confidence. The ECB will therefore continue to evaluate thoroughly the course of events in light of its mandate. Ongoing developments will be monitored very carefully.

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