 Well, hello, everybody. Welcome to today's webinar on monetary policy and transition with Mario Chanteno, the governor of the Bank of Portugal. Mr. Chanteno is very well known in European circles. He has been as well as being an active and highly published economist, especially in labor economics. He is a former finance minister of Portugal and is also the former president of the Eurogroup. In his time as finance minister in Portugal, Portugal delivered steady growth. A really impressive reduction in unemployment and a very strong reduction also in government deficits generating just for a brief moment of surplus before the COVID crisis came along and upset all that. Since July 2020, the minister became the governor of the Bank of Portugal, and of course Pascal Dunhu, the Irish finance minister became the head of the Eurogroup. In terms of the Euro area and the Eurogroup, Governor Chanteno managed to bring together a consensus on some really important reforms, reforms that included agreement on peer review of European economies, on common backstops and emergency provisions for banking on the structure and future of the European stability mechanism. And I suspect that he had a few more things in mind if he had a little bit more time, but to generate consensus on such big issues in a relatively short period of time was quite an achievement. More than that, Governor Chanteno is known among his staff and colleagues as being the sort of rarity a good leader who is also a real gentleman. It's a real pleasure to have him here with us. So, Governor Chanteno, we leave the floor to you. Please, members of the audience, remember that you do have a Q&A button and you may put questions in there for the governor and we will come to those after his presentation. Good afternoon. Good afternoon, Kevin, especially to you. Thank you for your very kind words. As usual, we had the opportunity to meet at the ESM and it was a pleasure to work with you then. Well, it is also a pleasure to discuss monetary policy as governor of Bank of Portugal. Portugal is a proud founder of the Euro, myself as former president of the Eurogroup is for me, even a more special occasion to be able to discuss these issues with you. The Eurogroup now, the presidency of the Eurogroup is now filled by my Irish friend Pascal Donoghue, so he's a very good friend of mine and an outstanding president of the Eurogroup and Ireland should be very proud of that as well. Well, it is a pleasure also because an Irish audience fully understands the importance to protect and complete the most tangible symbol of being European, which is the Euro, and the Euro now enjoys the IS support ever among Europeans. 79% of the population of Euro area countries support the Euro. If you go back to 2013, the same figure was only 62%. Let me insist in this idea of being among an Irish audience. I think it's also the perfect setting to state that the object that in my opinion best resembles the Euro is irreverable. I first use this idea and celebrating 20 years of the Euro in the European Parliament. And why is that? That the Euro ball is appropriate to describe the Euro. There are at least three reasons that come up to my mind. First, because the Euro pretty much as a rugby ball is difficult to handle. Second, because in the Euro area, as in a rugby team, we need to progress and to make progress together. No one can be left behind. And finally, in a rugby team and in the Euro, it is quite difficult to succeed with one man or country down. So what I propose to you this afternoon is to play it fair as only rugby players can do and to discuss very openly monetary and fiscal policy alike. The policy response to the pandemic is a remarkable showcase of the power of monetary in fiscal policy interaction. It has always been there. It's embedded indeed in the economic clause and institutional arrangements, but this crisis has made clearer the benefits that may arise from their coordination. Europe was caught in debates focused on the theme of fiscal dominance before. In my opinion, this was the result of the poor handling of the financial crisis and its aftermath. In 2020, although the scope for additional monetary accommodation using traditional policy tools was limited central banks have resorted to unconventional monetary policies. These instruments allowed to circumvent the effective lower bound on policy rates and to guarantee swift access to affordable forms of liquidity. Then with the transmission mechanisms in place, it reached all economic agency need. In response to the pandemic, the CV launched the new asset purchase program, the pandemic emergency purchase program, the so called PEP, but also a new series of targeted longer term refinancing operations, the TLT RO3. And it has been a massive intervention between February 2020 and April 2021. There was an increase of 51% in the stock of original asset purchase program and the pet taken together. TLT RO credit operations exhibited an increase of 242%. If we take the numbers as they show right now, the outstanding amounts in April 2021 for the APP and PEP programs together were almost four trillion euros, and TLT RO represent two trillion euros already. With such tools, monetary policy ensure the proper functioning of the financial system in the peak of the crisis. Like in previous episodes, the latest financial crisis comes to mind. Market liquidity dried in particular markets immediately, pressure was mounting but prompt monetary action eased market concerns already in March 2020. Since then, financing conditions have remained favorable supporting the flow of credit to the economy. In complement to monetary policy, fiscal policy played an immediate and crucial role in responding to the health emergency and to its impact on economic activity, namely on the financial positions of firms and households. As we used to say, while policy, monetary policy decision makers, monetary policy was not the only game in town this time. To reinforce the functioning of automatic stabilizers, Euro area governments swiftly implemented an unprecedented fiscal package whose direct budgetary costs are estimated to have amounted to more than 4% of GDP in 2020. In addition, member states provided ample support to counter the economic fallout of the COVID-19 pandemic. The largest category of liquidity support measures came in the form of state guarantees to support private sector borrowing. Euro area member states have put in place schemes totaling around 20% of GDP, although the actual take up was smaller. But we should not be surprised by that because some of these measures, especially these guarantees were back stops acting in fact as insurance nets. Initiatives in the European Union provide additional support to the emergency fiscal response to the pandemic. The need and importance of the fiscal support was recognized by the activation of the escape closed in the context of the European Union's fiscal surveillance framework. In a first moment, the SUAR instrument, as well as financing provided by the European Investment Bank and the ESM pandemic crisis support instruments created leeway for national fiscal authorities to mitigate the fallout from the pandemic, while also providing effective risk sharing in Europe. And this is very, very important. After that, the next generation EU. The next generation EU inherits the spirit of the Euro area budget instrument agreed in the Eurogroup in the last quarter of 2019. We used to call it big. The most important aspect of this extraordinary period of economic policy decisions that I was privileged to witness in the front row was the ability to implement innovative measures to join efforts across member states and European institutions and, more importantly, to put aside all divisions and moralized concerns. Innovation coordination and solidarity describe the reaction of Europe in 2020 in stark contrast with the reaction to the financial and sovereign crisis 10 years earlier. Following a call for policy proposals from the Euro summit in December 2019. We found appropriate solutions for the financing of the budgetary instrument for convergence and competitiveness. The reflections on the need of being its objectives, design and modalities were lengthy and lively in the Eurogroup but proved to be very insightful. The integration of the governance framework of the European Union and the modalities for non-Maria member states was part of the debate. The reflections at that stage were fundamental, I can assure you, for all member states of the European Union to have a clear picture of the added value of this kind of instrument and paved the way, no doubt about it, for the quick agreement on the next generation EU. The next generation EU is more than the support mechanism of 750 billion euros, more than 5% of European Union GDP, including the European Union recovery and resilience facility. To finance the 750 billion euros, the European Union will borrow on the market and issue common debt. But this is not only a sign of European solidarity but also of commitment and willingness to pursue the economic integration of the European Union over a long period of time. And why do I say this? Because the maturity of the instruments can reach 30 years. This is certainly not a temporary project. The reinforced capability of the European Union to successfully fund the next generation EU and to manage it in the following 30 years will set the ground for new and ambitious commitments. The crisis has evolved, elsewise in the economic terms, and it's time to look ahead. The same applies, of course, to a monetary policy in transition. The paradigm used at the beginning of the crisis must be adopted. For that, the European Union funds will be crucial. The initial measures aimed at mitigating the direct effect of the severe lockdowns in economic activity. Liquidity was the buzzword that we were all concerned about. We asked firms to stop production and people to stay at home. This is quite dramatic. In a political space known for the birth and development of the welfare state, the plethora of social policies adopted at the outset of the crisis, furlough's creams come to mind was only expected. Supervisors, fiscal authorities and rental banks made sure credit flow to firms in need, and credit and tax moratoria were applied in almost all countries of Europe. As uncertainty begins to fade, measures need to be adjusted, in particular to support the most vulnerable sectors and to mitigate potential scaring effects. But there's nothing structural in this process. It's all the result of the pandemics. These new targeted policies should be combined with measures that improve the fundamentals of the economy and support the green and digital transition. This is the European agenda as of now and we must follow it. We shall not fall full ourselves. The decisions taken in 2010-20, brave as they were, were simpler to design than what comes next. This is of particular importance in a scenario of elevated debt that carry an additional vulnerability in our decentralized currency union. The absence of a fully consolidated public balance sheet exposes governments to a higher risk of self-fulfilling debt crisis. We worked very hard in the recent past in order to reduce risks, to expose ourselves now to these risks again. We don't need to raise old worries. We must avoid to revive moralized concerns that we successfully curb in the pre-crisis period with the reduction of NPLs, with the capitalization of European banks, with fiscal balances at their medium-term objectives in 14 out of the 19 euro area member states and public debt falling in all euro area member states. This was 2019, not that long ago. The crisis was exogenous and no accumulated imbalances brought this year. The monetary policy front is also challenging as ever, but the grounds to its implementation are now also richer than ever. Risk reduction, as described above, facilitates the transmission of monetary policy because it reduces the risk of fragmentation. The completion of the institutional framework in the euro area is now much closer and will also reinforce the role of monetary policy. Monetary policy is expected to remain very accommodative amid a persistently low inflation environment. Forward guidance points to interest rates remaining at low levels and the maintenance of the purchasing program in the foreseeable future. A strategic review of the monetary policy is ongoing. We couldn't think of a better setting to debate the monetary policy strategy. The objective of the European system of central banks is clearly stated in article one to seven of the Treaty of the functioning of the European Union. The primary objective is to maintain price stability. Without prejudice to these main objective, it should also support the general economies of the union contributing to the achievement of its objectives. Against these, the discussion has to be broad based and encompass the different elements currently at the core of the union's policies. Although we have to proper balance the impact of any change, we cannot hide behind limited mandates. We have to be effective. We cannot afford a myopic view. Our midterm orientation has to retain flexibility to allow for adjustments as shocks are unexpected in nature and size and 2020 is a great example of that. The lessons drawn from the current crisis and the decisions taken in the context of the pandemic are important and should be duly considered. The use of unconventional measures that is not a novelty of this crisis, it dates to 2014, have proved to be effective in particular concerning the challenges posed by the effective lower bond. They have been key in averting daily risks and easing financial conditions. The revised monetary policy strategy ought to retain many elements of the practice of the last decade. Recognizing that monetary policy is liquidity provision mechanism in a very broad sense is one of those elements. Recognizing the particular effectiveness of monetary policy in moments of stress is another one. We must meet some perceived limitations of monetary policy in more normal times, at least to ensure that inflation converges towards a defined objective. On these, there are suggestions that make up strategies will be very helpful. It is perhaps too early to conclude that this is indeed the case. Maybe a symmetric formulation for the price stability objective is more flexible than tying one sense as in makeup strategies. A symmetric objective means that when inflation is either above or below the objective, monetary policy will react to bring it towards the objective. This definition would convey the idea that we will act proportionally either when inflation is above or below the objective. Sure, this may not be enough to bring inflation back to our aim. One option is to be patient and communicating. Now that we found that substantial monetary accommodation as effects on on real variables but perhaps insufficient effects on inflation. Our medium term orientation can certainly be used to accommodate such policy choice. Another and complementary avenue is to highlight further the overall success of policy and its profound effects on the course of our economies when tensions are acute. Regarding our concerns with preserving monetary policy transmission and avoiding fragmentation of credit market markets, arguably important conditions for the prosecution of the price stability objective would help attenuate some an easiness with persistent deviations from the inflation aim, and we have been observing these for quite some time already. To energize to the price stability objective, this could come along with a clearer rule for full employment and balanced economic growth in our policy. That would further help aligning our concerns with those of the citizens we serve, but it will also make our strategy more comfortable with our actions, which include welfare criteria as a clear motivation. I think it is quite appropriate to be so. Well, I hope these reflections can open up the debate. I am, of course, available to to your questions, which I think in advance. Thank you, Kevin and thank you all.