 Ladies and gentlemen, Vice-President and I are very pleased to welcome you to our press conference. First, I would like to thank Governor Hansen for his kind hospitality and express our special gratitude to his staff for the excellent organization of today's meeting of the Governing Council. We will now report on the outcome of our meeting. Based on our regular economic and monetary analysis, we decided to keep the key ECB interest rates unchanged. We expect them to remain at their present levels for an extended period of time and well past the horizon of our net asset purchases. Regarding the non-standard monetary policy measures, we confirm that our net asset purchases at the current monthly pace of 60 billion euros are intended to run until the end of December 2017, or beyond if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase program. Our monetary policy measures have continued to preserve the very favorable financing conditions that are necessary to secure a sustained convergence of inflation rates towards levels below but close to 2 percent over the medium term. The information that has become available since our last monetary policy meeting in late April confirms a stronger momentum in the euro area economy, which is projected to expand at a somewhat faster pace than previously expected. We consider that the risks to the growth outlook are now broadly balanced. At the same time, the economic expansion has yet to translate into stronger inflation dynamics. So far, measures of underlying inflation continue to remain subdued. Therefore, a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium term. If the outlook becomes less favorable or if financial conditions become inconsistent with the progress towards a sustained adjustment in the path of inflation, we stand ready to increase our asset purchase program in terms of size and or duration. Let me now explain our assessment in greater detail, starting with economic analysis. The euro area real GDP increased by 0.6 percent quarter on quarter in the first quarter of 2017, after 0.5 percent in the last quarter of 2016. Incoming data, notably survey results, continue to point to solid, broad-based growth in the period ahead. The pass-through of our monetary policy measures has facilitated the deleveraging process and should continue to support domestic demand. In particular, the recovery in investment continues to benefit from very favorable financing conditions and improvements in corporate profitability. Common gains, which are also benefiting from past labor market reforms, are supporting real disposable income and private consumption. Moreover, the global recovery is increasingly supporting trade and euro area exports. However, economic growth prospects continue to be dampened by a sluggish base of implementation of structural reforms, particularly in product markets, and by remaining balance sheet adjustment needs in a number of sectors, not withstanding ongoing improvements. This assessment is broadly reflected in the June 2017 Euro System staff macroeconomic projections for the euro area finalized in late May, which are conditional on the full implementation of all our monetary policy measures. These projections foresee annual real GDP, increasing by 1.9 in 2017, by 1.8 in 2018, and by 1.7 in 2019. Compared with March 2017 ECB staff macroeconomic projections, the outlook for real GDP growth has been revised upwards over the projection horizon. The risks around in the euro area growth outlook are considered to be broadly balanced. On the one hand, the current positive cyclical momentum increases the chances of a stronger than expected economic upswing. On the other hand, downside risks relating to predominantly global factors continue to exist. According to Eurostart's flesh estimate, euro area annual HICP inflation was 1.4% in May following 1.9% in April and 1.5% in March. As expected, the recent volatility in inflation rates was mainly due to energy prices and temporary increases in services prices over the Easter period. Looking ahead on the basis of current futures prices for oil, headline inflation is likely to remain around current levels in the coming months. At the same time, measures of underlying inflation remain low and have yet to show convincing signs of a pick up, as unutilized resources are still weighing on domestic price and wage formation. Online inflation is expected to rise only gradually over the medium term, supported by our monetary policy measures, the continuing economic expansion, and the corresponding gradual absorption of economic slack. This assessment is also broadly reflected in the June 2017 Euro System staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 1.5% in 2017, 1.3% in 2018, and 1.6% in 2019. By comparison with March 2017 ECB staff macroeconomic projections, the outlook for headline HICP inflation has been revised downwards, mainly reflecting lower oil prices. Turning to the monetary analysis, Broad Money M3 continues to expand at a robust pace with an annual rate of growth of 4.9% in April 2017, after 5.3% in March. As in previous months, annual growth in M3 was mainly supported by its most liquid components with the narrow monetary aggregate M1 expanding at an annual rate of 9.2% in April 2017, after 9.1% in March. The recovery in loan growth to the private sector observed since the beginning of 2014 is proceeding. The annual growth rate of loans to non-financial corporations increased to 2.5% in April 2017 from 2.3% in the previous month, while the annual growth rate of loans to households remained stable at 2.4% in April. The pass-through of the monetary policy measures put in place since June 2014 continues to significantly support borrowing conditions for firms and households, access to financing, notably for small and medium-sized enterprises, and hence credit flows across the Euro area. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need for a continued, very substantial degree of monetary accommodation to secure a sustained return of inflation rates towards levels that are below but close to 2%. In order to reap the full benefits from our monetary policy measures, other policy areas must contribute much more decisively to strengthening economic growth. The implementation of structural reforms needs to be substantially stepped up to increase resilience, reduce structural unemployment, and boost productivity and potential output growth. Regarding fiscal policies, all countries would benefit from intensifying efforts towards achieving a more growth-friendly composition of public finances. A full, transparent, and consistent implementation of the stability and growth pact and of the macroeconomic imbalances procedure over time and across countries remains essential to bolster the resilience of the Euro area economy, and we are now at your disposal for questions. Ms. Weisbach. Thank you very much, Annette Weisbach of CNBC. I have two questions, of course, regarding the two big changes in the communication today. Has that been decided on a unanimous basis, so everybody was behind that? The second question is on the forecast. If you're saying inflation is around 1.6% for 2019, so how much QE is factored in that inflation forecast because you're saying the asset purchase program might end this year, might also go further into next year, but how much is that, again, how much of such an effect is still in that forecast for 2019 and 2018? Thank you very much. Thank you. On the first question, we didn't have a vote, so I can't really say unanimity, but basically I didn't hear any dissenting voice by any governing council member with respect to the proposals that have been just stated in the introductory statement. The other thing is basically, well, we've defined our objective. Our objective is a self-sustained, durable convergence towards an inflation rate which is below but close to 2%. This convergence is predicated on the very substantial amount of monetary accommodation that I've just mentioned in the introductory statement, and it's predicated on that. That's what it is in the projections, and that's what it is in our program. Thank you. Mr. Mardisto. Mr. Draghi, my question is regarding the Banco Populaire. Did the ECB act quickly enough over Banco Populaire, given how close it came to being insolvent? And are you reviewing the case now, given the bank was deemed insolvent less than a year ago? Now, here, as you know, we have a separation principle, and we never comment on individual institutions. But what I can say, as far as we are concerned, we can only express appreciation for the timely action of the SSM. And then, if the vice president wants to have any comment on that, I will give him the floor. But otherwise, we don't comment on individual institutions, and as you know, we have the separation principle. Please. Yes, because, of course, it was a decision of the ECB that was at stake. That decision was based on the BRRD, and the reasons that triggered that decision were related to the liquidity problems. There was a bank run. So it was not a matter of assessing the developments of the solvency as such, but the liquidity issue. It is stated in Article 32, Number 4, Item C, that the fact that an institution is unable, or there are sufficient objective facts that show that it is about to become unable to satisfy its debts and liabilities, that's a reason for the declaration of an institution being failing or likely to fail. That's enough. And then after that declaration, the process was given to the single resolution mechanism that then is in charge of resolution. So our role as ECB was just the declaration of that the bank for liquidity reasons was failing or likely to fail. Ms. Jones. Mr. Draghi, a lot of people are going to take the tweaking to the forward guidance as a sign that a decision on tapering will come in September. Would market participants and ECB watches be right to think that, that we will get a decision on tapering on what happens to QE in 2018 in September? And one of the heads of, for my second question, one of the heads of the national central banks has raised doubts about whether the European central bank can hit its inflation target. We've seen today downgrades to the inflation projections, but at the same time you have removed the commitment to lower rates. Given that, should markets share the same doubts as Mr. Novotny that you perhaps can't hit your inflation target? Thank you. So the first question is, it was not discussed. On the second question, you're actually asking many questions. First of all, the downward revisions in inflation, as a matter of fact, very little has changed as far as inflation is concerned because it was 1.9 in April, if I remember, and we all remember the serious concerns, if not the outcries, for inflation was going up too much. And now it's 1.4 and it's mostly almost entirely driven by the price of oil and price of foods. So from that viewpoint, nothing has changed in substantial terms. What needs to be explained, however, is the flat and low profile of the underlying inflation. And that is needs to be explained in a sense. That has to do mostly with the subdued wage, nominal wage growth. And there are many reasons, and some of them may be more important than others. It's hard to say which is which, but basically the reasons that are behind this are certain structural changes that have taken place. One of which is certainly the backward-looking negotiation of nominal wages to looking as a sort of reference of inflation, looking at low inflation rates as a basis for current negotiations. But there are also other reasons. We, all this recovery is happening with a very strong creation of new jobs. And so there is definitely a very significant increase in labor force, labor participation. At the same time, we have evidence that this many of the, so to say, what is the percentage, but many of these new jobs are so-called low-quality jobs where we're talking about temporary employment. We're talking about part-time employment. There are many so much so that the ECB in a recent paper has developed some measures of sort of a broader concept of unemployment, which is broader than the official rate. It may well be that this is actually slowing the growth of nominal wages as well. More generally, structural reforms that have taken place are good for growth, certainly, and are good ultimately in the medium-long term for employment, but also in making the markets more flexible, especially labor market more flexible, do tend to produce a lower growth in nominal wages. So all this makes us think that some changes in the structure of wage negotiations have taken place. However, so this is, the first thing is basically we need to be patient. We need to be patient because we know that the labor market slack is actually tightening, the output gap is closing, and we know that all these factors in the end will, their effects will fade away. The job quality will improve, productivity will increase with the cyclical recovery goes up. So the second point is that we also, so first of all, we need to be patient. Second is we need to be confident. If we look at the uncertainty dimension of inflation, we see two phenomena. The first is the tail risk have disappeared. So deflation rates are not there any longer, and that's why we have removed one of our easing biases, which was exactly addressing the tail risk of the inflation path. And we also see that the uncertainty about the path of inflation is also decreased. So as the output gap will close and unemployment rate will go down, we are becoming also more confident that the inflation path will converge towards our objective in a durable way. Now, having said that, and here I come to the other part of your question, we need to be persistent. So we need to continue, we need to continue to accompany the recovery with our monetary policy. We will continue with our purchases, and the introductory statement again is quite clear. As we confirm, our net asset purchase, the current monthly price of 60 billion euro, and these purchases are intended to run until the end of December 2017 or beyond if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with its inflation aim. Also, I want to emphasize that basically DCB will be in the market for a long time when we say the net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase program. And just a little later on, we say that a very substantial degree of monetary accommodation is still needed. If the outlook becomes less favorable or if financial conditions become inconsistent with further progress, we stand ready to increase our asset purchase program in terms of size and or duration. The bottom line basically is that the governing council trusts the strength and the power of our purchase program, and that's it. I think I've responded to all your questions. Do you think that the prolonged lower inferential rate forecast could force DCB to change its forward guidance and raise the negative deposit rates before the end of the quantitative easing? No, nothing substantial has happened to inflation other than changes in the oil price and the price of food. Everything stayed, I think it was well said by Governor Hansen this morning. If we compare inflation now with inflation in December, and we see that underlying inflation is basically the same four years after year. And so at the same time, since we have stronger confidence in the path of the inflation convergence, and we've seen that the tail risks of the inflation have definitely disappeared, we felt confident in removing the interest rate, the easing bias as far as the interest rate was concerned. Mr. Speciale? Alessandro Speciale, Bloomberg News. Mr. President, did you have during this week's meeting any discussion about policy normalization, or is this discussion still to be had in the future in the light of the current inflation outlook and of the inflation projections? And as my second question is, you have removed the easing bias on rates, but you say that you are still ready to increase the size and duration of QE. Under what conditions would you do that? I mean, would the continuation of this inflation outlook warrant an extension or maybe even an increase in volume of QE? Thank you. Thank you. Well, you asked me about normalization was being discussed. The answer is no. Of course, there are people who, one or two council members observed that we have to think in perspective to the link between the asset purchase program and the inflation convergence. So there were sort of some few, actually two, if I remember, two, I guess, observations of this nature, but it wasn't any discussion of that on normalization as you mentioned. The other point was about why we left the other bias, the APP bias, easing bias. Well, first of all, the two are very different. The first is an expectation that interest rates will remain at present or lower levels. Now, if you ask me now what do you expect? Well, I say that based on the current assessment, the current information, I don't expect lower interest rates. If you ask me, but in case things were to worsen, are you ready to lower interest rates? The answer is yes. So the APP easing bias is like this. It's part of a reaction function. And it does say that if things were to turn less favorable, so, and here, just stop a moment, if things were to turn less favorable, is a set of contingencies which is more benign than the tail-race contingency embodied in the expectation. And as such, it's still there. So it's part of our reaction function. If things turn out to be less favorable, then we are ready to expand our APP. That's the answer. Ms. Inigüez? Spanish press agency, I have a question about popular. Why do you choose Santander's beat? Why was Santander the best option? I, as before, I referred to the vice president. As I said before, after the declaration that the bank was failing or likely to fail because there was a bank run and a liquidity issue, which is sufficient justification for that declaration, then the matter went to the single resolution mechanism. Single resolution? Single resolution mechanism, yes. Board. Well, board is the deciding body of the SRM. The SRM is the mechanism, as the SSM is the mechanism for supervision. So the matter after the declaration went to the resolution mechanism, to their board, to take the decisions about resolution. So after the declaration of failing or likely to fail, we had no interference with the subsequent decisions. They belonged completely to the SRB, not to the SSM, not to the ECB. Can you see the issue? I'm talking about legal competencies, and we have to be very formal in this matter, as you, I'm sure, fully understand. So legally, our competence was just to declare that the bank was failing or likely to fail for liquidity reasons. All the rest was not legally with us. Mrs. Rank? Yes, Mrs. Rank? Hello. I have two questions. One is local and one is more general. Syria Rank from Estonia and business day Lariba. Estonia is a country with very low public deficit. Public debt, and we have no government bonds. Estonian politicians are thus complaining that Estonia is in a way missing out from this central bank stimulus, QE. How would you respond to such interpretation of QE? And second question is about EMU reform. The European Commission has tabled the discussion paper for reform of Eurozone. And we are already discussing about Eurozone finance ministers and Eurozone parliaments and etc. Once you wrote that we shouldn't scare or confuse the public with such discussions, but concentrate instead on critical minimum that is necessary to make the Eurozone function better. So how would you define this critical minimum and what is this critical minimum on member state level? Thank you. Thank you. As far as the first question is concerned, I would defer to Governor Hansen. And then I would just add something at the end, please. Thank you, President, and thank you for the question. I think this is an issue of capital mobility, and we get this question all the time. And we use the principle of connected vessels that this is a common financial market and therefore changes that take place in one particular jurisdiction spillover to the whole Eurozone. So while it's true that we don't have a lot of direct purchases here, in the end, let's say most of our credits are all linked to Euribor and Euribor is not set in this country, but is set more broadly in the Euro area. So the transmission mechanism works but through different channels. And I think one of the signs might be this is the right now we have the highest inflation rate in the Euro area. So in some sense it's probably working but through different channels. Thank you. Well, only add to this that being Estonia such an open economy, it benefits especially from the positive effects that QE has on the rest of the Eurozone as well. Thank you. Now on your second question, well, we have to, I mean, the experience of the last few years shows that the Economic and Monetary Union is, with the many benefits that has brought to the Eurozone, is also fragile. And it's fragile for various reasons, one of which is that it's incomplete. And that's the sort of consideration that is at the basis for the commission recent work. Commissioners published a paper with different scenarios and before the commission's paper we had the five presidents report where there was a blueprint, a forward, we would say a forward guidance in two, with two horizons really. One is shorter term when there are certain sort of certain measures, certain decisions that can be taken, especially as far as completing the banking union is concerned. And then we have a medium or long term horizons where new changes in the Economic and Monetary Union could be introduced, but they do require a more extensive change in our treaties, in our treaty foundations. And so I guess it's to be welcome this new work on strengthening the Monetary Union, especially on having in mind that we need to repair the fragilities that have appeared in the last few years in the union. Then we can discuss what we talk about, but this is a broader discussion and it's not finished yet, it's just the beginning of a broader discussion. Thank you. Mr. Ferles. Thank you. Tom Ferles from the Wall Street Journal. Mr. Draghi, does what you said about removing the rates, easing bias on rates mean that this wasn't a first small step away from stimulus, a first step towards the exit, as it might be interpreted. The second question was on how constrained the ECB is likely to be on implementing QE next year. Do you see any problems and how flexible could the parameters of QE be, like the capital key for instance, thanks. On the first question, we remove the interest rate bias because the tail risk on the future path of inflation have disappeared. That is to say, deflation risk have definitely gone away. The lower the possibility that the DFR deposit facility rate could go lower was predicated on the strengthening or the materialization of these tail risks. So that is the, and as I said, does it imply anything as far as a reaction function is concerned? The answer is no. I mean, if things were to turn out in a way that these risks were to reappear, we certainly be ready to lower rates. So that's the explanation. On the second point, the program is running smoothly and as far as the future is concerned, we have the problem has enough flexibility and we'll certainly look at that when the time comes if need be. In the meantime, the governing council members reiterated their confidence in the strength of the program, in the power of the program and as you've seen from the introductory statement, they confirmed both the program and the follow-up guidance that's associated with that. Thank you. As Mr. Bologna? Tony, Mr. Bologna, the Republic. Given the fact that the ECB is exiting very slowly, the period of extraordinary measures, do you think that this might be a challenge for some countries that have still a big debt like Italy, given also that Italy is facing now probably a period of political uncertainty or instability? And my second question goes to the risk. Is there a risk, in your opinion, of a scarcity of German bonds in the next time on the markets as you're going on with the same rhythm? Thank you. Thank you. With respect to the second question, I kind of answered an almost similar question a moment ago. Namely, the program is running now smoothly and when and if we'll face problems, we'll use the flexibility that the program itself embodies. So that's the present situation. And as I said, the governing council members reiterated their confidence in the strength and the power of the program as it stands today. The second, the other question, which was the first question, well, first thing to remember is we have a mandate. Our mandate is specified in terms of price stability. It's not specified in government budget support or other considerations. We have, it's been said that we have, that savers are being affected by a program, banks are being affected by our program, banks profitability is being affected. Now it's government's budgets. Second, there are always countries that anticipate countries that lag behind. So our program has in mind price stability and that's what we have to remember. But certainly, those countries which have a weak budget position and low growth and lack of structural reforms will be certainly more affected than others by a possible increase in interest rates. This is no, it's no discovery about that. The key thing here is to resuscitate growth. It's the most important thing. Thank you. Mr. Lacour? Jean-Philippe Lacour, French agency, IFP. Mr. Draghi, on the sum up sentence of your introductory statement, the mention with undue delay was dropped regarding the sustained return of inflation toward level close but below back close to 2%. Is it just a formal change or what is the merit of this dropping of without undue delay? That's the first question. It's purely formal. I'm purely formal. Yes. I have another more broad question. Since very much attention has been given to the, on the assessment regarding the risks surrounding the growth, economy growth and in the past until the end of 2014, if I remember the governing council, communicated itself also on its view regarding the medium term outlook for price developments and so the risk regarding this medium term outlook. So is it something the ECB could maybe emphasize at new or because this is an aspect which are the risks on the medium term price stability, which everything depends on. So why is this element of convocation disappeared and is it not now or in the future time to reactivate it? We didn't have a discussion of when and if to reactivate but certainly it's a topic which from time to time resurfaces in our discussions and so it was raised this morning, it was raised in other meetings in the past. We are reflecting on it. There is no specific reason to have it introduced again but we are certainly reflecting it also for sake of symmetry with the growth and with the growth of output path. Thank you. Mr. Craig. Mr. Craig. Thank you. From Arilette, which conditions should be met before ECB could stop offering extraordinary monetary policy measures? The answer is really is defined in our objective. We have to be confident that the inflation rate is durably converging towards our objective of an inflation rate which is close but below 2% and it's a self sustained convergence. In other words, it's durable but it's also gonna stay there once we withdraw the monetary policy support. Mr. Jacoush. Class of the Jacoush, I heard you German television, Mr. President, I would like to touch on the four preconditions you mentioned early on this year which are necessary in order to get back to a kind of normal monetary policy. If I look at the revised inflation outlook which is really less favorable than the last one, what is your expectation? Will we actually see within the three year period any going back to a normal monetary situation? And secondly, if we look at this and we see that the economy picks up quite significantly in some countries, at the same time, we have the fact that headline inflation is not picking up as we perhaps also would expect it. Don't we have to start thinking about whether the two but 2% target is still an appropriate one. Thank you. Thank you. The four conditions, it's the, are in the definition of our objective which is a durable, self-sustained convergence of the rate of inflation towards an inflation rate of close but below 2%. So that stays there, that's our objective. It's not employment, it's not growth. Certainly, the stronger is the recovery, the stronger is the decline in unemployment rate. The more confident we become as we did today that the convergence is on its way to become to actually satisfy the conditions that I mentioned in its definition. That's what, second point about inflation, I said at the beginning, nothing has substantially changed as far as inflation is concerned. We have to, there is gonna be also in the coming months, by the way, a significant amount of volatility due to oil prices and food prices, but the underlying inflation is basically staying what it is today. So it's pretty, what we see now, based on the current information, is a path of low inflation, underlying inflation and flat across time. Good afternoon. We have to close the press conference a bit earlier today for logistical reason, and I'd like, as a sign of appreciation, to give the last question to media from our host country, Mr. Oya. Mr. Nendele, posthumous. A comment started to improve nicely. Is it because of QE or despite of QE? Thank you. It's because of QE. We are here because of that. QE has supported the recovery throughout. Let me just give you a few numbers to answer your question more fully. Just said that, by the way, growth has been just revised from 0.5 to 0.6% in the first quarter, and so the annual growth for this year is going to be projected to be 2% rather than 1.9. But also, if you look at various indices, the PMI, which is an index we use to assess the state of the economy, is now at the highest level since April 2011. The Economic Sentiment Index, it's the close to the level it had in 2007, which is an all-time high. The unemployment, now it's 9.3%. It's the lowest since March 2009 with all the qualifications that I've made before about having a broader concept of unemployment as one of the reasons why we don't see much growth in nominal wages. And 5 million jobs have been created in the eurozone in the last three and a half years. More jobs than anywhere else in the world, I think, certainly more than in the United States. So the risk of deflation has dissipated. The recovery is proceeding based on consumption and investment, and consumption and investment are growing because of QE also, not only, but also QE, because oil prices are, because interest rates are low, labor income has increased, wealth, households' wealth is also increased. Financing conditions remain extremely favorable. So, and this is essentially because of QE. And the pass-through of our monetary policy decisions has probably never been so effective, as effective as it is today. So this is passed into lower lending rates, much closer spreads across the eurozone, closer spreads across sectors and between different companies. I think I've said in the introductory statement that the SMEs are also benefiting greatly from the QE policy, from our monetary policy measures. So I think I've answered fully to your question. Thank you. Thank you very much.