 Ladies and gentlemen, good afternoon. Welcome to the press conference at the ECB after the governing council meeting that just finished. I'm joined here on stage by President Lagarde and by Vice President de Gindos. My name is Wolfgang Preusel and I will now hand over to President Lagarde. President Lagarde, please. Thank you very much, Wolfgang. Well, ladies and gentlemen, the Vice President and I are very pleased to welcome you to our press conference. We will now report on the outcome of the meeting of the governing council, which was also attended by the Commission Executive Vice President Mr. Waldis Dombrovsky. After the contraction in the first quarter of the year, the euro area economy is gradually reopening as the pandemic situation improves and vaccination campaigns make significant progress. The latest data signal abounds back in services activity and ongoing dynamism in manufacturing production. We expect economic activity to accelerate in the second half of this year as further containment measures are lifted. A pickup in consumer spending, strong global demand, and accommodative fiscal and monetary policies will lend crucial support to the recovery. At the same time, uncertainties remain as the near-term economic outlook continues to depend on the course of the pandemic and how the economy responds after reopening. Inflation has picked up over recent months, largely on account of base effects, transitory factors, and an increase in energy prices. It is expected to rise further in the second half of the year before declining as temporary factors fade out. Our new staff projections point to a gradual increase in underlying inflation pressures throughout the projection horizon, although the pressures remain subdued in the context of still significant economic slack that will only be absorbed gradually over the projection horizon. Headline inflation is expected to remain below our aim over the projection horizon. Preserving favourable financing conditions over the pandemic period remains essential to reduce uncertainty and bolster confidence, thereby underpinning economic activity and safeguarding medium-term price stability. Financing conditions for firms and households have remained broadly stable since our monetary policy meeting in March. However, interest rates have increased further. While partly reflecting improved economic prospects, a sustained rise in market rates could translate into a tightening of wider financing conditions that are relevant for the entire economy. Such a tightening would be premature and would pause a risk to the ongoing economic recovery and the outlook for inflation. So, against this background, the Governing Council decided to confirm its very accommodative monetary policy stance. We will keep the key ECB interest rates unchanged. We expect them to remain at their present all lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to but below 2% within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics. We will continue to conduct net asset purchases under the Pandemic Emergency Purchase Programme, well known as PEP, with a total envelope of €1,850 billion, until at least the end of March 22, and in any case until the Governing Council judges that the coronavirus crisis phase is over. Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects net purchases under the PEP over the coming quarter to continue to be conducted at a significantly higher pace than during the first months of the year. We will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions that is inconsistent with the countering of the downward impact of the pandemic on the projected path of inflation. In addition, the flexibility of purchases over time across asset classes and among jurisdictions will continue to support the smooth transmission of monetary policy. If favorable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEP, the envelope need not be used in full. Equally, the envelope can be recalibrated if required to maintain favorable financing conditions to help counter the negative pandemic shock to the path of inflation. We will continue to reinvest principal payments from maturing securities purchased under the PEP until at least the end of 2023. In any case, the future roll-off of the PEP portfolio will be managed to avoid interference with the appropriate monetary policy stance. Net purchases under our asset purchase program, PEP, will continue at the monthly pace of 20 billion euros. We continue to expect monthly net asset purchases under the PEP to run for as long as necessary to reinforce the accommodative impact of our policy rates and to end shortly before we start raising the key ECB interest rates. We also intend to continue reinvesting in full the principal payments from maturing securities purchased under the PEP for an extended period of time past the date when we start raising the key ECB interest rates and in any case, for as long as necessary to maintain favorable liquidity conditions and an ample degree of monetary accommodation. Finally, we will continue to provide ample liquidity through our refinancing operations. The funding obtained through the third series of targeted longer-term refinancing operations, TELTRO3, plays a crucial role in supporting bank lending to firms and to households. Our measures help to preserve favorable financing conditions for all sectors of the economy which is needed for sustained economic recovery and for safeguarding price stability. We will also continue to monitor developments in the exchange rates with regard to their possible implications for the medium-term inflation outlook. We stand ready to adjust all our instruments as appropriate to ensure that inflation moves towards our aim in a sustained manner in line with our commitment to symmetry. So let me now explain our assessment in greater detail, starting with the economic analysis. In the first quarter of the year, Euroarea Real GDP declined further by 0.3% to stand 5.1% below its pre-pandemic level of the fourth quarter of 2019. Business and consumer surveys and high-frequency indicators point to a sizeable improvement in activity in the second quarter of this year. Business surveys indicate a strong recovery in services activity as infection numbers decline which will allow a gradual normalization of high-contact activities. Manufacturing production remains robust, supported by solid global demand, although supply-side bottlenecks could pose some headwinds for industrial activity in the near term. Indicators of consumer confidence are strengthening, suggesting a strong rebound in private consumption in the period ahead. Business investment shows resilience despite weaker corporate balance sheets and the still uncertain economic outlook. We expect growth to continue to improve strongly in the second half of 2021 as progress in vaccination campaigns allows a further relaxation of containment measures. Over the medium term, the recovery in the euro area economy is expected to be buoyed by stronger global and domestic demand as well as by continued support from both monetary policy and fiscal policy. This assessment is broadly reflected in the baseline scenario of the June 2021 euro system staff macroeconomic projections for the euro area. These projections foresee annual real GDP growth at 4.6% in 2021, 4.7% in 2022 and 2.1% in 2023. Compared with the March 2021 ECB staff macroeconomic projections, the outlook for economic activity has been revised up for 2021 and 2022 while it is unchanged for 2023. Overall, we see the risks surrounding the euro area growth outlook as broadly balanced. On the one hand, an even stronger recovery predicated on brighter prospects for global demand and a faster than anticipated reduction in household savings once social and travel restrictions have been lifted. On the other hand, the ongoing pandemic, including the spread of virus mutations and its implications for economic and financial conditions continue to be a source of downside risk. According to euro start flash release, euro area annual inflation increased from 1.3% in March to 1.6% in April and 2% in May 2021. This rise was due mainly to a strong increase in energy price inflation, reflecting both sizable upward base effects as well as month on month increases and to a lesser extent, a slight increase in non-energy industrial goods inflation. Headline inflation is likely to increase further towards the autumn, reflecting mainly the reversal of the temporary VAT reduction in Germany. Inflation is expected to decline again at the start of next year as temporary factors fade out and global energy prices moderate. We expect underlying price pressures to increase somewhat this year, owing to temporary supply constraints and the recovery in domestic demand. Nevertheless, the price pressures will likely remain subdued overall in part reflecting low wage pressures in the context of still significant economic slack and the appreciation of the euro exchange rate. Once the impact of the pandemic fades, the unwinding of the high level of slack supported by accommodative monetary and fiscal policies will contribute to a gradual increase in underlying inflation over the medium term. Survey-based measures and market-based indicators of longer-term inflation expectations remain at subdued level, although market-based indicators have continued to increase. This assessment is broadly reflected in the baseline scenario of the June 2021 euro system staff macroeconomic projections for the euro area, which foresees annual inflation at 1.9% in 2021, 1.5% in 2022, and 1.4% in 2023. Compared with the March 2021 ECB staff macroeconomic projections, the outlook for inflation has been revised up for 2021 and 2022, largely owing to temporary factors and higher energy price inflation. It is unchanged for 2023 as the increase in underlying inflation is largely counterbalanced by an expected decline in energy price inflation. HICP inflation, excluding energy and food, is projected to increase from 1.1% in 2021 to 1.3% in 2022 and 1.4% in 2023, revised up throughout the projection horizon compared with the March 2021 projection exercise. Turning to the monetary analysis, the annual growth rate of broad money declined to 9.2% in April 2021 from 10% in March and 12.3% in February. The deceleration in March and April was due partly to strong negative base effects as the large inflows in the initial phase of the pandemic crisis dropped out of the annual growth statistics. It also reflects a moderation in shorter-term monetary dynamics, mainly originating from weaker developments in deposits by households and firms in April and lower liquidity needs as the pandemic situation improves. The ongoing asset purchases by the Euro system continue to be the largest source of money creation. While also decelerating, the narrow monetary aggregate M1 remained the main contributor to broader money growth. Its strong contribution is consistent with a still-heightened preference for liquidity in the money-holding sector and a low opportunity cost of holding the most liquid forms of money. The annual growth rate of loans to the private sector declined to 3.2% in April from 3.6% in March and 4.5% in February. This decline took place amid opposing dynamics in lending to non-financial corporations and to households. The annual growth rate of loans to non-financial corporations fell to 3.2% in April after 5.3% in March and 7% in February. The contraction reflects large negative base effects and some front-loading in loan creation in March relative to April. The annual growth rates of loans to households rose to 3.8% in April after 3.3% in March and 3% in February, supported by solid monthly flows and positive base effects. Overall, our policy measures, together with the measures adopted by national governments and other European institutions, remain essential to support bank lending conditions and access to financing, in particular for those most affected by the pandemic. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is necessary to support economic activity and the robust convergence of inflation to levels that are below but close to 2% over the medium term. Regarding fiscal policies, an ambitious and coordinated fiscal stance remains crucial as a premature withdrawal of fiscal support could risk weakening the recovery and amplifying the longer-term scaring effects. National fiscal policies should thus continue to provide critical and timely support to the firms and households most exposed to the ongoing pandemic and the associated containment measures. At the same time, fiscal measures should remain temporary and counter-cyclical while ensuring that they are sufficiently targeted in nature to address vulnerabilities effectively and to support a swift recovery in the euro area economy. The three safety nets endorsed by the European Council for workers, businesses and governments provide important funding support. The governing council reiterates the key role of the next-generation EU package. It calls on member states to deploy the funds productively accompanied by the productivity enhancing structural policies. This would allow the next-generation EU program to contribute to a faster, stronger and more uniform recovery and would increase economic resilience as well as the growth potential of member states' economies. In doing so, the program would support the effectiveness of monetary policy in the euro area. Such structural policies are particularly important in improving economic structures and institutions and in accelerating the green and digital transitions. We're now ready to take your questions. Thank you. Good afternoon, and thank you very much for the opportunity. I have a question on the meeting. President Lagarde, may you tell us how was the discussion of the governing council meeting today? How was the mood as you said also the uncertainties remain? And what prevailed in the next generation and what prevailed in the discussion as you decided to confirm the very accommodative monetary policy stance? Thank you. Well, thank you for that open question because it gives me a chance to tell you a little bit about how this meeting went. But let me start with what would be my takeaway of the overall analysis that we conducted, and the conclusion that we reached. I would say steady hand. And let me drill a little bit into that. We spent a lot of time looking at the quarterly staff projections and went deep into each and every item of those projections and in conclusion of this work, I think would say that we were somewhat more optimistic about the economic outlook than we were three months ago. I think that the latest signal that we are getting is a strong rebound which is starting with the second quarter and hopefully will be amplified in the third quarter. And I think we took that moderate optimism from the fact that number one we are seeing that the vaccination rollout has accelerated significantly and is increasingly outpacing other advanced economies vaccination rollout. And second we are seeing that containment measures are gradually lifted that should lead to a vigorous bounce back in that sector which was most affected by the pandemic. We are also seeing a sharp increase in May actually the largest increase that they had ever recorded. And we expect private consumption to rise sharply. So when we look at the service PMI for instance it is clearly now an expansionary territory. It went up from just marginal 50 in April to now 55.2 in May. And we expect private consumption to rise sharply as the containment measures are gradually lifted. So that is good news from the services point of view which was most affected. Now when we look at the manufacturing sector which has earlier on been robust it continues to be robust. And when we look at the European manufacturing for instance it has stabilized at very elevated level to be robust. But we also looked into those supply side bottlenecks that clearly have an impact in the short term on our inflation particularly now but for the short term outlook as well. And that will create some headwinds certainly. So that is all on the positive front. But we also acknowledged and looked into those uncertainties that we have on the horizon. Which has been a big and how we see little nest of revival based on another kind of variants. We are also dependent on how fast the containment measures will be lifted particularly for those countries that are most sensitive to the service industry. The activities that are most factor of those containment measures are lifted early on. The tourism season for instance or a lot of the transportation activities will pick up. But that is an uncertainty as we look forward. So it is as a result of that, that our staff increased their projection for 21, 22 and kept it at the same level in 23. So it has been revised up. Then the big job of the governing council after it has looked deeply into our projections and what we see in terms of macroeconomic situation, our job is then to look at the financing conditions on the one hand and the inflation outlook on the other hand. Because we do conduct that joint assessment which we decided back in December that we confirmed again in March and which is our monetary policy reaction. So on the financing front we clearly see broadly stable financing conditions taking together the corporate and the household sector. And there is a little bit of an increase in the corporate sector which is clearly attributable to two particular countries. One is the Netherlands, the other one is Germany. And this is probably attributable to some tactical approach taken by those banks in those particular countries to take full advantage of the TELTROS conditions and to make sure that they catch up with the commitments that they have to take on the TELTROS. But overall absent those particular factors, we see a little bit of tightening, very, very moderate though. But there is a potential that what we observed on the market interest rates actually could pass through or is at risk of passing through to the financing conditions that are applicable to the corporate sector in particular. For the household sector not the case because the financing of the household sector is at rock bottom at about 1.31 1.31 percent interest rate which has never been so low. So this is the first part of the joint assessment. I'm happy to take you through the second part which is also critically important which has to do with inflation but maybe that's too long an answer. You're getting a really long answer for a really good question then. So we do the joint assessment as you know. And we look on the other side at inflation and as I said in the introductory statement we are seeing some short changes. So I think the movement of the inflation number and our assessment for 21 is 1.9 percent which is clearly north of what we had in our last assessment. But I think we need and we did that throughout our discussions. We try to really dissect what is underneath and what is the lasting impact of some of those factors. And I think that it's worth reminding ourselves where we were talking about inflation. That's how inflation is calculated year over year. And clearly a year ago a lot of activities went down. Prices were under downward pressure clearly. And the down movement that we saw at the time has now and is being compensated by an upward movement that we see in many of those prices that went down. Clear example of that is the energy prices and all derivative products went way down and has now recovered and we see what we call that base effect between 20 and 21. This is clearly the case. We will see more of it because there is another base effect that will be attributable to the German VAT. Back a year ago July 1st decline of VAT in Germany deliberately in order to support and sustain demand, well this has now been reversed and we will be seeing the base effect in the months to come which is probably a reason why inflation in some countries, Germany being one, will go north of our forecast for the whole of the Euro area. And I mentioned earlier on the bottleneck issues which will push certainly production prices up. And what we need to really focus on and that's what we did we need to focus on services. Our Euro area activities roughly 60% services and services is predominantly labor and we need to really dig down into the labor cost into the wages increases into the collective bargaining agreements that are reached currently and will be reached hopefully in the future. But we don't see much by way of service prices going up if you look at the many of the service industries prices are not moving much. And that is because wages have not increased significantly we see a little bit of movement possibly and we hope that we will see more of it and that more of the price pressures are actually channeled into higher wages. Probably because of the slag that we have in the economy. Let's not forget that if you compare with back a year ago a little more than a year ago we have 3.2 million more people unemployed and if you take the combination of the unemployed and those that are under furlough schemes we talk about 15% of people who are not on the job. So this particular aspects we are really examined in great details to understand what is behind inflation why it will impact significantly 2021 to a lesser extent 2022 because some of the base effect that I have described for you will begin to fade and will not actually have much of an impact in 2023 but and that's a but and it's important to understand that at that length there's something that is moving a bit and that is core inflation when you take out energy and food and on that front there is a slight movement upward which has now been repeated for a couple of months and that's the reason why our forecast for core inflation has gone up a bit to 1.1 in 2021 1.2 in 1.4 in 23. We are far away from our ultimate aim close to but below 2% not there and we certainly are not where we would like to be once the pandemic is over but we are seeing some movement there and we will continue to monitor that carefully for the moment certainly headline inflation, temporary have just described and have no reason to believe that it is going to last through and will be included in a rise in inflation that we would see in the in our medium term projection and that leads us to the decision so that I have sorry if I was a bit long but I have taken you through our deliberations throughout. Thank you and the next question goes to Alexander Weber of Bloomberg news Alexander please Good afternoon President Lagarde Good afternoon On the pace of the PEP so the reference to the first quarter and the policy statement gives you a bit of flexibility how much fluctuation in weekly buying should markets expect over the coming months also considering that there is typically less liquidity in the summer and the second question if I may so once the PEP comes to an end next year inflation will be slowing down again according to your forecast do you need to decide on whether to increase buying another PEP or take any other steps to boost inflation over the medium term thank you Thank you for your two questions so that takes me to the decision actually that we made which is to as I said steady hand so we based on the joint assessment that I have just described what the governing council has decided as I read in my introductory statement is to expect net purchases over the quarter to continue to be and I would like to quote the introductory statement for you to continue to be conducted at a significantly higher pace than during the first months of 21 significantly higher pace than during the first months of 21 now we are going to do that in the next three months according to market conditions which clearly include seasonality and we will do that with the very core attribute of PEP which is flexibility flexibility across asset classes, flexibility across time flexibility across geography as you know well so that's really what we will be doing and this is done on the basis of as I said the quarterly joint assessment that is decided by the governing council and then it's for the executive board to actually implement and deliver on the basis of this joint assessment and according to market conditions including seasonality on your second question I'm afraid you'll be disappointed because I might just very well refer to my Lisbon line there is no point losing ourselves in conjecture it's too early it's premature it's unnecessary to discuss those longer term issues and those matters have not been discussed by the governing council thank you and the next question goes to Annette Weissbach of CNBC Annette please thank you very much President Lagarde I have one question in your comments that the sustained rise in market rates could lead to a tightening the market is kind of trying to find out where this threshold is what is sustained and which level are you concerned about on average and my second question would be on the outlook and the strategic review is my understanding correct that the strategic review will come first and then you will try and come up with not try but then you will come up with a time map for the exit to the PEP you're going to be bored with me but I'm going to repeat myself any discussion about exit from the PEP as you just mentioned would be premature it's too early and it will come in due course but certainly for the moment it's too early and premature as simple as that we are in the process of a strategy review we have been conducting this review for a while it has been suspended unfortunately because of COVID-19 and the enormous amount of work that just landed on the shoulders of the very same staff that was working on the strategy review so it's some would consider it undue long and certainly we are working really hard to complete this process and I hope that we'll be able to give the outcome of the strategy review in the second half of 21 and I still stick to that but anything having to do with PEP and any kind of transition exit whatever you call it has not been discussed and as I said it's just too early and premature now concerning tightening we conduct a joint assessment the commitment that we made the monetary policy decision that we made in March which was in December and then in March which was both critically important is to make sure that we preserve favorable financing condition and also being very attentive to the inflation outlook with a view to resisting any downward pressure that would not help in returning to the inflation path of the pre-pandemic period that's what we do and that's how we conduct our monetary policy so I cannot isolate one component financing conditions is a whole range of indicators from as I said financing conditions for corporates for households, for sovereigns market interest rates we take the whole range of financing conditions we assess that and then we identify the inflation outlook the various components the likelihood of our projections and the monetary policy decision which as I said is in a way a steady hand translation of what we decided in March Thank you Next question goes to Balaz Corani of Reuters Balaz, over to you please Good afternoon and thanks for taking my question President Lagarde, did anybody at the meeting make the case for a phrase the terminology different than the significantly higher did they advocate some other option and was the decision unanimous the second question is about the underlying assumptions behind the projections how did you factor in the Indian or Delta variant does your baseline factor in an increase in restrictions in the second half of the year or do you expect restrictions to be without what are the projections for restrictions on the economy the proposal that is made to the governing council included the words that I have repeated which you find in the introductory statement which is the proposal to conduct purchases at a significantly higher pace than during the first months of 2021 and there was no alternative wording and there was unanimous support for the introductory statement and there was broad agreement over what was being proposed now on the baseline and whether or not we take into account alternative variants and evolution of the virus we will publish later this afternoon our scenarios because we do have the baseline and we also have a scenario that is the mild scenario and a scenario that is an aggravated scenario if you will and it's in those scenarios that you will find some of the hypotheticals that you referred to thank you and the next question goes to Martin Arnold of the Financial Times Martin please can you hear me yes I can thank you thank you for taking my question I have two questions for you today given that your medium term of production forecast for 2023 is unchanged and remains significantly below target why are you not stepping up the pace of your purchases to achieve that or do you not think that increasing the pace of purchases even further would have any effect on inflation and the output gap in the economy and the second question I have is on you talk about bottlenecks and supply shortages presumably given your inflation forecast is for much lower inflation print out next year you expect many of those bottlenecks to be cleared up by the end of this year is that correct thank you thank you very much for your two questions so on you quite right that inflation forecast inflation projection has been revised revised upward for 21 and 22 and not for 23 and that's for the reasons that I have explained earlier on there is a base effect there are some transitory factors but there is also and I have discussed that quite a bit the movement on core inflation so we are clearly seeing improvement and that dates back to December because our forecast for the in the core inflation outlook has been revised gradually by 0.1% over the course of the last projection exercises so I think that's certainly one of the reasons why we believe that the steady hand is actually the right response in the face of these improvements in core inflation which we will continue to monitor very carefully added to which you will have noted as well as the balance of risk which was tilted to the downside in our last projection is now considered as balanced that's another signal that the situation is improving on your second point because you're right we foresee inflation we forecast inflation at 1.9 this year and 1.5 in 2022 and we assume in that respect that some of the bottlenecks that we know of at the moment which the financial time has referred to in various articles actually that some of those bottlenecks will gradually fade out because it is a matter of the supply response if chips are not being produced in sufficient quantity in a particular part of the world they will be in the course of time additional factories additional work processes put in place and possibly offer of products revisited as we know is the case for instance in the automotive industry so the assumption is from our perspective that many of those bottlenecks will actually be overridden by the ingenuity of those who produce and those who revisit their supply chain thank you Eric Albert of Le Monde the next question is for you Eric please thank you very much I'm just I'd like to come back a little bit on the significantly higher pace you said it was supported anonymously you didn't quite answer the question about what's the case for a different pace made by any of the member could you tell me that and the other thing could you give us your views on the scarring of the economy post-pandemic are you more optimistic now to see the beginning of the rebound than you might have been a few months ago on your first point I said that there was unanimous support for the introductory statement there was debate on the pace of purchase on some of the analytical aspects of the use of our instruments and that's the reason I use the word broadly agreed by the governing council because there was here and there a couple of diverging views and not unanimous consent across the board so I'm very transparent and very clear introductory statements unanimously supported and some divergence about some particular aspects now scarring of the economy we are still concerned about the scarring by the pandemic whether it's in relation to labor in particular economists will use the hysteresis reference where clearly as a result of change of consumption pattern change of supply change there will be more different jobs coming up and there will be more people than was already anticipated that will have to get additional training that will have to adjust to new tools and possibly acquire completely new skill set so that's one of the reasons why we believe that next generation EU plan is a critical financing element to actually transition into the post-pandemic period and help those that will be most affected by the scarring impact thank you and the next question goes to Klaus Reiner-Yakish Klaus Reiner-Yakish Good afternoon Mr. President, my first question relates to inflation some leading economists have suggested that the pandemic has caused much more structural and fundamental changes to the global economy similar to what we have seen in different way of course after the financial crisis and they suggest that inflation probably will become a much more persistent problem and inflation will stay on a much higher level than especially not only ECB but also other central banks suggest and expect at the moment and what do you think of these ideas and my second question relates to the bitcoin as you are aware El Salvador has announced to make the bitcoin now as an official currency are you concerned about this move thank you very much On the inflation having more persistent impact as a result of the pandemic I am assuming that you are referring to economists such as Larry Summers maybe Olivier Blanchard and a few others I think that their point has more to do with the massive stimulus that has been given by the various plans including in particular the last Biden plan to be voted of over 1.8 trillion trillion dollars and the fact that they might be overheating as a result of that and therefore inflation that would be higher than what is currently expected I think that the US economy situation and the euro area economy situation it's a very very different story the two economies are at a different point in the recovery cycle they start from a completely different base the fiscal stimulus that have been put in place at least in end of 2020 and beginning of 2021 are of a different magnitude and as a result whatever is ultimately the characterization the longevity of the price upward pressure that would occur in the United States I think is completely different from anything that we will see in the euro area although of course there will be some spillover as I think have indicated at our last March conference as a result of the Biden plan but certainly of too small a magnitude to actually make a huge difference but we will be pandemic is also a factor of what happens domestically but also what the spillovers from the global economies will have on a domestic economy and we will be very attentive and we will look into that the exchange rates as well on your second point I'm no longer familiar with the situation in El Salvador I know that it's a country that is under IMF program I think the issue of having dual tender in a particular economy is a difficult one and that certainly does not change our approach to crypto assets and to the regulations supervision and proper classification that they should be under in order to avoid misinformation and misleading representations Thank you and the next question goes to Andres Stumpf of Expansion Andres please Hello Madam President, do you hear me? Yes I can hear you well I would like to know if there was some divergence to regarding the balance of risks Did any member felt like it should be tilted to the downside or to the upside and no broadly balanced? Thank you As I said all the key points that are in the introductory statement that I have read to you have been agreed and have been seen as acceptable by all members we did debate this is the beauty of us being together we did debate whether it was right to actually move to this downside risk that we had back in March to this more balanced assessment of more balanced risks and there was general consensus around that Thank you One second question if I may Okay you may It's about the digital euro I would like to know if we are going to hear some news in July as the market is expecting it would be in the monetary press conference or maybe in another conference I think you will definitely hear about the decision that will be made by the governing council concerning the digital euro but I just would like to warn you in advance that this is not the final go I think my colleague and board member Fabio Panetta has explained that very clearly mid-July the governing council will approve to go ahead into an exploration phase that will include multiple aspects from technology to privacy to inclusion and everything in between so it's not as if the decision was final and made exploring all these matters will actually take a lot of effort a lot of digging and will bring together the whole euro system because it obviously involves all the NCBs around the ECB on this matter but you will obviously hear about it but all I'm trying to say is let's not assume that we are jumping to conclusion this decision will be do we explore further or do we not spend much more resources on this project and the next question goes to Mark Boinderman of NSA Handelsblatt Mark, please Yes, thank you very much you just said that the decision on the pace of purchases was broadly agreed could you perhaps sketch out a little bit how that discussion went also from the point of view of those who were not in the majority so the dissidents and secondly if I may US inflation just came in at 5% which is high and also higher than expected do you view a risk or a possibility that US inflation will trickle through to the eurozone thank you Well thank you very much as I said the governing council conducted this joint assessment of the financing conditions against the background of the inflation outlook and then the decision was made to continue to to purchase at a significantly higher level than during the first few months of March and as I said there was some debate about that because obviously we had to analyse both the financing conditions and the inflation to lead us to the decision that was made but the decision is very clear and straightforward and everything that is actually embedded in that introductory statement was supported thank you and the last question goes today to Tom Fairless of the Wall Street Journal Tom please now Hi President Lagarde thanks a lot for taking the question I wonder if you saw any risks from the this very aggressive monetary stimulus on both sides of the Atlantic I mean you see housing prices going up any kind of any longer term risks emerging and yeah secondly maybe on the US comparison you said it seems like you're watching quite closely what's going on there do you expect a longer period of divergence between the ECB and the Fed thanks concerning your first question what we always do when we make a monetary policy decision is to assess effectiveness, the efficiency and the proportionality of our measures and as a result of that we have to look into the potential side effects or the real side effects and certainly as far as we're concerned for the moment the benefits that we have from the monetary policy decision that we have taken going back to the beginning of the pandemic back in March 2020 up until now is that it largely outweigh the indirect effects that you're referring to I would also add that in relation to some of those risks there are alternative measures that can be decided either from a macro or from a microprudential point of view or from a fiscal point of view but all in all when I look at you know the counterfactuals what would it have been where would we be had had the European Central Bank not made the decisions that it made to make sure that we were not going to move and more from a pandemic situation to a cataclysmic recession situation that we would have had so I think that by doing what we did we made sure that financing was flowing into the economy and that any risks of poor monetary policy and its mission would be avoided and by the same token we also enabled fiscal policies to be supportive and accommodative as well so it's the joint fiscal and monetary approach that was so critical in order to actually resist what could have been a very very dramatic spin into a disastrous economic situation so as I said comparing comparisons are odious but comparing the US economy as it stands and the euro area economy where it stands and as it stands I think is not in the cards because as I said we are in terms of inflation we starting from a different base in terms of fiscal stimulus in 21 different story as well and in terms of point in the recovery cycle not the same place yet although clearly our vaccination rollout is accelerating and now clearly outpacing the vaccination cycle that the United States and other advanced economies are going through so of course when you look at inflation there are domestic factors as I said and we have to be attentive to the global situation and how other economies whether they are advanced including the largest one or whether they are emerging economies how they are faring and that has spillover effects so that has impacts but are we exactly in the same point in the cycle? No Thank you President Lagarde that brings us to the end of the press conference thank you very much for following us the next regular press conference is scheduled for the 22nd of July up until then we wish you all the best stay safe and goodbye