 Okay, so the format for the panel is, first of all, each of the panel members will make some opening remarks for about eight minutes each, and then we will move straight to the floor discussion. I mean, this should be a very interactive session, but there's many senior policy makers in the audience. So whether adding perspectives from your own country or asking questions of the panel, I just invite you to be ready to actively contribute after the opening remarks from the panel members. So with that, let's jump right in, and the first panel member to speak will be Alfred Cameron from the IMF. So good morning to everybody. Thanks for the invitation, and I'm happy to be able to join you all here today. Let me start where the CECI region is headed. Activity in the CECI region is slowing down. Labor markets remain strong. Now our expectation, as you can see in the chart, is that for the region we will have a soft landing followed by a mild recovery in 2024. Those are the projection parts on the right side. Domestic demand and inflation are slowing. That's what we are seeing. This reflects less fiscal support than last year and the impact of the central bank financial tightening. The recovery will be driven by improving real wages as nominal wages catch up while inflation is continuing to decline. But in our view we are in a precarious situation. A return to the economic conversion, which Valdez has mentioned, is at risk from the possibility of persistent inflation and what it can mean for competitiveness and the costs imposed by geo-economic fragmentation. Inflation as you can see here has been pushed to worrying levels. In the last year was above 10% in most CECI countries. While we expect inflation to come down rapidly in 2023, as you know commodity prices are declining and that is showing up in headline inflation, this inflation will proceed more slowly next year. A concern in our baseline forecast is that we expect inflation to stay above central bank targets until 2025 and that is a very long time being away from central bank targets over the last few years. So why did inflation stay so high until now and why does this matter? We see two forces pulling in the same direction. One, the global factors. They played a part. High import prices and pass-throughs of cost to consumers, partly accounting for the high profits you see in the charts, were one force. But the other driver was domestic factors. Domestic demand last year was well above what is consistent with inflation targets. This was driven by public support and ample household savings as they left from the pandemic. High inflation matters as it leads to strong wage growth. And you can see that in the dark wedge in the chart on the very right side, which in turn is becoming an increasingly important driver of inflation itself. This year average wage growth across SESI countries is set to exceed 10%. And an extended period of high wage growth could lead to more sustained inflation than what we have in our baseline forecast. Unit labor costs could start exceeding productivity growth and competitiveness. And now to the other part of the issue and that is global fragmentation affecting the region and it's going to be a disruptive force. While food and energy prices are receding, many countries are turning to inward-looking policies and the raised production costs and potentially prices and long-term productivity growth. For example, on-shoring, reshoring and other FDI related activities are hotly debated in the private sector. And you see a chart here documenting this. Now it's true, as President Lagarde pointed out, that the global reorientation of trade and of supply chains offers growth opportunities for the region, given its proximity to the Euro-area countries. But these opportunities will only be available when wage costs evolve in line with productivity and competitiveness is not being lost. And I will come back to these opportunities from fragmentation, but let me elaborate on the risks first. There is a risk that fragmentation of global value change and trade could add to the inflation problem and lower growth. Looking just at restrictions in commodity trade, the economic cost from segmentation in access to these critical inputs could be 2% globally and we estimated 3.5% in emerging Euro-below. This impact could be inflationary by raising production costs, while also dampening long-term productivity increases. It is important that CESI countries prepare for the downsides of fragmentation. Here, retaining cost competitiveness will be one of the critical elements. Now our number one concern remains containing inflation. And for us, this is the number one issue CESI countries need to tackle. As you can see here, the chart co-inflation in CESI countries remains well above euro area rates and that creates possible price, wage, and competitiveness gaps. Our policy advice is for those countries which have monetary policy levers to maintain a tight monetary policy stance until inflation pressures clearly and sustainably ease. And in particular, that means that discussions on easing monetary policy right now are premature as long as inflation, as long as co-inflation is still above target and far above target. And rather, and that is important, center banks should communicate clearly that if they expect that disinflation is not materialized, that further tightening actually will be required. For several CESI countries, monetary policy is constrained and there are other policy levels which can be used and that brings me to fiscal policy. Fiscal policy needs to help fight inflation and preserve buffers given the shock prone world we are entering. But when you're looking at 2023, ambitions look rather modest in light of the very strong labor markets and robust domestic demand. We should note that even in small open economies, fiscal policy can help with disinflation. And with the study of the Baltic countries, if you are using fiscal deficits by one percentage points of GDP there, the impact on inflation is half a percent. And that will matter if we are closing in on the inflation target where every little help is going to make a difference. But this is also important because fiscal policy helps anchoring expectations and it has a signaling effect which to some extent is reflected in responsible wage setting behavior. So fiscal policy matters not only because of the demand impact but also because of setting expectations. And we have discussed these options in terms of fiscal consolidation in SESI countries. One of them is going away from broad based energy support cost of living packages and make them more targeted or eliminate them all together as the energy crisis is receding. And the second one is to capture and maintain and save windfall tax revenue which has materialized over the last year. So those are easy, relatively easy things to do in terms of helping on the fiscal consolidation side. And I also want to mention that fiscal adjustment matters because if you are concerned about financial stability risks that means we want to be careful on overburdening monetary policy and having to take care of everything with policy rate increases. Now coming to the fragmentation part here it's important that SESI countries position themselves in order to mitigate the effects and also to take care of the opportunities being offered. And what you can see here is that SESI countries are extremely well integrated in global value chains and providing a huge value added in that domestic value added to goods they are exporting. So well placed to benefit from opportunities but that points back again to getting macro policies right to take advantage of this opportunity. And that leads me to my conclusion. One concern we have is that sustained high inflation reinforced by fragmentation can erode productivity and competitiveness. What it means for policies we need the right policy mix that means do not ease monetary policy too early and fiscal policy should help with this inflation. And as mentioned by Valdez that puts us then to the other part which is important and that is to move on structural reforms which matter for productivity and long term growth. That means to get the investment climate right by improving governments and the corruption frameworks to durably attract investment including foreign direct investment. It means to retain a intact financial sector while the banking systems look generally sound and strong. Their credit and interest rate risks that are high and supervisors need to be vigilant. And finally we need to tackle labor market transitions. They come because of changing consumer demand switching from goods to services but also through reshoring policies. And what that means is enhanced employment programs to rematch and skills and also in the longer term to think about training and reskilling in an ever evolving demand on skilled labor. Thank you. Thank you very much, Alfred, for a very comprehensive tour of the major policy issues. And the next speaker on the panel is Debra Ravtela from the European Investment Bank. So over to you, Debra. Thank you very much. And it's really a pleasure to have an opportunity to address this audience and talk about the microeconomic policy challenge for the region. I was thinking about the angle in which I could best contribute in the panel. And I saw that one of the elements that is quite important to understand in this moment is how the monetary policy tightening is reflecting in financing conditions. So the transmission challenge channel to financing condition in the region. Because of the specificity of the transition challenge for the region is as well very important in the moment in which we discuss about the needs of investment for the digital and green transition. And that's what I will actually try to detail a little bit more. And I will leverage on two things. One is a survey, a bank lending survey for the Central Europe and Southeastern Europe region that we run as part of the Vienna Initiative every six months. We just published the new release of the survey looking at bank lending condition in the region and also our survey of firms. This one focusing mostly on the U-side, so on the U-member states part of the region only. So where do we start? The main message is structurally we know that the region is more affected by credit conditions. The percentage of firms that are credit constrained tends to be higher than the rest of Europe. And the percentage of firms that have enough financing, internal finance to finance their investment is lower. So structurally we always see the region as more finance constrained. And what I find interesting is also the discrepancy between finance constrained between the larger, medium, small, and micro firms. What we know is not a novelty that would be everywhere that a micro and small firm are particularly affected. What I find interesting is to look at how the tightening financing condition during the pandemic period and the subsequent shock affected different firms. What you see is that at the moment of tightening, everybody was very strongly affected in the moment of relaxation in 2021 after the huge policy stimulus. Actually, larger, medium companies they declined very fast the finance constrained. But that was much less for micro and small. And then the reopening of finance and tightening is coming back and affecting all. But what you see is that the shock affected differently firms. And even in the relaxation phase, micro and small remained much more constrained. So the policy support was not really helping at these group of firms. But at the end, what we see and I know that structurally, credit constraints are stronger in the region and particularly stronger for micro and small firms. Then what is happening with the monetary policy tightening? We see that the region has started the monetary policy tightening earlier than the euro areas in most of the countries. On the right side, I'm starting to picture what we see from the Bankland in survey. And here the data are presented in net percentage of firms. So what you see is that actually we are clearly in a phase of tightening a supply condition while we are in a phase of softening a demand condition but still with moderate very low net positive on the demand side. So we see more the effect on the tightening of supply condition. And that's the picture that we see over time for all the return. If we look at the component of the effect of supply condition tightening, you see that actually it's coming all over. All over the component are affected on the supply side. On the demand side, we see some, you can call it a worsening of demand condition. You see housing or the consumer very much on the negative side. You see some demand remaining on the positive side on working capital and on the debt restructuring. But clearly also fixed investment turning to the negative. So the switch is towards worsening of demand condition. We were trying benefiting from the fact that the survey of the Vienna Initiative started in 2013. We tried to do some simple econometric to see the impulse response to policy shock both on the supply and demand. And what we see is that the impact that tend to be stronger of a policy shock tend to be stronger and faster on the supply condition and also more persistent on supply condition. I find it is interesting because it's something that anecdotically we are a lot for the banking region that actually when policy, when tightening of supply condition is passed through from the parent company to the subsidiaries is actually quite strongly passed through across the board. So actually the tightening comes across the board in the region. So when we look at what is happening to lending grow, actually we start seeing a contraction in terms of a lending grow in the region as well. But still it's a positive number in terms of a lending grow on aggregate. We were as well trying to look at the policy, at the impulse response of a policy shock on lending grow. And we see that the stronger impact actually comes after three years. But actually the shock has started to be quite felt after three quarters. So we start having already the pass through from the policy impulse having in mind that the policy tightening already was anticipating the most of the countries of the region. But the full pass through time to take longer and go toward the three years. This is a very complex graph. So I wouldn't need a lot of time to explain it. But I wanted to pass the message that in the region there is a lot of talking of the challenge for a small open economy. And in fact what you see is that when the interest rate differential opens compared to the eurozone rates, what you have is a shift on foreign currency lending. And actually the foreign currency lending is then financed through cross-border bank net lending. So the tightening of monetary condition may have a purpose effective if this cycle takes place. And actually we have some evidence in the region that may be starting to take place in some of the countries. On the funding side of banks, we don't see major pressure coming in in terms of total funding and access to funding. Actually the banks in the region in the Bankland Survey reported that they see positive development on the funding side with the clear exception of the concern related to the MRL, that actually there is a market of MRL in the region and a lot of questions coming in on the stability of the market and the cost of funding related to the MRL. So that's one part which is creating some concern for banks in the region. But overall what does it mean for investment? And I think in all of these we have to come back to what Alfred was also mentioning. Having investment taking place in the region is a combination of different aspects. On the one side there is a lot on business environment. On the other we show just what firms tell us in terms of the main constraint for investment activities. There is a lot related to uncertainties, business condition, even the availability of skills. So the concern for the region are very much still also structural. So we have the financing issue taking place. You see that availability of finance is more relevant than for Europe overall. But still there are a lot of other factors that affect investment. And if we go back also to the discussion that we had on public financing, I don't put here on projects and public financing. I think the complexity of having the skill for delivering on the larger public investment projects that are on the plate is important. I would like to conclude with a very quick analysis that we have been doing and that's related to what the EAB is doing. The EAB is in fact financing banks for banks to lend to SME on investment projects and most time on investment projects that have a purpose either on the climate side or in the innovation side. We were trying to look at the impact of these on lending to banks. And we have the advantage that we ask banks to report back the name of the firms that received our financing. What we see is that after three years, so if we monitor the firms that received the EAB support at the lending and we monitor how these firms grow in the next three years compared to identical firms that didn't receive this policy support, we see that actually overall in Europe, they are much more likely to have invested, to be growing, to have more employment, also to be slightly more investing in intangible, more productive. So we see a grow effect of these access to finance, which is quite important because it reflects what I was saying at the very beginning. The structural element of underdevelopment of market and more credit constrain in the market. I was repeating the same analysis on a centralist in Europe only and comparing the result versus the overall results for the EU. And what you see is again an additional positive effect in terms of these on lending versus the rest of the EU in terms of additional grow effect for the firms, employment effect, also investment and very strong on intangibles as well. Basically what we see is that they're really targeted, support for companies focusing on investment needs that can have a very strong effect on the firms per se. And I think that says something in terms of the policy support that should be implemented maybe more targeted that can have a more important effect. And with that I close. Thank you very much. Thank you very much, Deborah. And there's really quite a lot of striking evidence about transmission through the banking system and in the survey you showed. Maybe I'll ask you just to pass the clicker along to Boston at the end. And the next speaker is Boston Valsy from the Central Bank of Slovenia. So over to you. So good morning to everybody. And Philip, thank you for your invitation. I will also talk about the current challenges we are all facing in our economies and especially on the response of policies which have already been implemented and also the future one. So past three years were marked by two extraordinary shocks which completely change our macroeconomic landscape and also how the policies are operating. And the main focus became inflation again. So after the outbreak of COVID the first influence of the pandemic was deflationary. We witnessed a shutdown or closure of a significant part of our economies. We were also staying at home, working from home. So the demand fell sharply and also the prices of energy, other commodities went down. So initial phase was deflationary but that was the only phase with such pressures on price dynamics. Later when the pandemic started to recede a bit when economies reopened, the prices of energy reversed and started to contribute to inflation dynamics. The same was true for services, additional demand, new demand, pent-up demand pushed the service prices up and also supply chain disruptions influenced other groups of prices and the inflation started to increase. After the second shock, the Russia aggression on Ukraine this was only emphasized the inflation accelerated further. It also broadened and peaked around the end of last year. Now at the moment we are in the next phase of inflation when we can see a headline inflation going down but mainly due to lower energy prices you can see at the end already a negative contribution of energy prices towards overall inflation but on the other hand more inflation remain high, remain resilient and our main forecast is that it will stay at this relatively high level in the next months as well. Also growth was very much affected by both shocks although it turned out to be more resilient as compared to what we thought at the outbreak of the first shock and also the second shock. So what we saw was relatively high growth in 2021 also in 2022 and for this year we are expecting a moderation of growth quite significant slowdown of growth but still on overall it will be a positive growth momentum for our economies in this year as well. As for the CZ economies, both trends were more pronounced. Discrepancies of growth which outperformed Euro area growth and EU growth as well was due to several factors most fundamentally to still ongoing convergence process but also to strong policy support including labor market measures. So the growth was in general much higher as compared in these countries, this region as compared to Euro area but this is also true for inflation. It was higher primarily due to higher dependence on energy but also due to developments in the labor market, strong labor market, strong wage growth against stronger wage growth as compared to EU average and this all contributed to significantly higher inflation in this region. So we entered this year 2023 with the positive growth momentum although slowing down but also high inflation. And there are some global trends which will affect our economies. All of them, but they might have a stronger impact on CZ economies due to the geopolitical situation and also the location. And what Alfred already mentioned is that we are very much dependent on global value chains. The value chain participation rate is significantly higher in the region as compared to the EU average and of course this is an important headwind for our growth. So what is a possible scenario is that the growth momentum will slow down, the inflation will remain higher so in a way we'll be facing the stock inflation environment or at least this is a significant risk for this part of the economy. So as for the economic policy response, of course the primary role is on monetary policy and in past year we did quite a lot. The interest rate increase campaign was actually the strongest ones since the establishment of the ECB. All together we increased our main rates for 400 basis points but compared to the high inflation also the highest increase in inflation in past year's relative comparison is slightly different and that's why we'll probably have to go further in order to also to see the reversal of core inflation and not only headland inflation but having in mind the level of inflation and also how broad-based it is, it's obvious that only the monetary policy response will not be enough. Other policies, fiscal policy, wage policy and also other structural policies will have to act in complementary way to lower inflation and this is especially important in the region since the compensation, if you're looking at the labor market and the wage developments, it's obvious that wage growth was significantly higher in this region as compared to EU average thus contributing significantly more to overall inflation. The same might be true for fiscal policy as well the fiscal impulse is still strong and we can talk about three phases of interaction between monetary policy and fiscal policy. For the first one, at the outbreak of the COVID it was necessary that both policies are aligned and they actually were aligned so strong support from monetary policy and even stronger support from fiscal policy. Then in the second phase, during the Russia aggression, fiscal support was still needed but the general consensus was that it must be more targeted and more so more temporary and looking backward, this was actually the case but now when inflation is becoming very persistent it's staying relatively high. Again, the alignment of policy much better as it is at the moment. So in order to bring inflation down with the lowest possible cost, fiscal policy will have to follow the lead of monetary policy and reverse its trend as well. So to conclude with compared to it with past three years with COVID and Russia aggression shock, 2023 started on much better terms but it's still challenging for policy makers since the growth is slowing down and inflation is staying very persistent. So with monetary policy, we already did a lot. We are prepared to do more if needed but high and broad based inflation calls from other policies to react as well. I mentioned monetary policy, wage policy but also structural policies since they are very much important for the overall business environment in which firms operate, in which firms set their prices, determine their profit margins which are again important contributor to overall inflation. Thank you. Thank you very much, Boston. And now let me turn to Sergei Nikolaychuk from the National Bank of Ukraine. So over to you Sergei. Thank you and good morning to everyone. And first of all, thank you very much to the European Central Bank for inviting our bank to be the part of this conference. For us, it is very important to be the member of European family of the central banks as it highlights our Ukraine's efforts for the European integration. I understand that my intervention today will differ from what my fellow panelists spoke of. Other countries in the region discuss macroeconomic responses to the second round effects from the Russian invasion of Ukraine and can afford to underline other open long-term risks and challenges. In the meantime, we are in the epicenter of this horrific reality, a terrific terrible reality while trying to navigate the economy and ensure macroeconomic and financial stability. Since Russia's full-scale invasion last year, Ukraine has been facing enormous challenges in conducting all elements of macroeconomic policy. Along with other state actors, the Central Bank of Ukraine has been forced to make decisions on the constant shelling, risk of occupation, power blackouts, destruction of whole cities and territories, and overall exceptional uncertainty. Nevertheless, we have successfully maintained our focus on safeguarding price and financial stability. At the initial state of the full-scale war, in order to prevent the panic and preserve uninterrupted functioning of the banking system and payments, we adopted a wide range of classic anti-crisis measures, such as fixing the exchange rate, introducing tough capital controls, easing requirements for banks and providing them with vast liquidity. Moreover, to ensure uninterrupted funding of the critical expenditures of the government, the NBU started supporting state budget via purchasing government bonds. While these early measures helped the banks, businesses and households to quickly adapt to the new reality, this mix was not sustainable in the long run. That's why we started to adjust our policies and ration our resources as the failed Russian Blitzkrieg moved to a war of attrition. The need for such changes in policy was clearly indicated by the fast depletion of the international reserves as our FX sales were not covered by the official influence. Thus, we had to repack exchange rate by 25% recalibrate capital controls and hide the key policy rate from 10 to 25%. Our life became easier as international aid grew and the IMF approved new programs for Ukraine, first program monitoring with board involvement at the end of the previous year and then full-fledged program EFF in March this year. This support allowed us to fully focus on ensuring macroeconomic stability and I will now walk you through the outcomes we were able to achieve. In fact, today we are considering path to normalization of our policies, something difficult to imagine a year ago in summer of 2022. Let's start with FX market as since February 2022 exchange rate has been our main nominal anchor. Meanwhile, in summer last year, we saw that these initial pegs supported by tight FX restrictions diverted from the fundamentals. Resource approach to the dangerous level, multi-currency practice was entrenched and led to additional demand via permitted channels. Thus, as I said, we repair the exchange rate by 25% while first tightening the capital controls. This gave us space on the FX market but spread widened again after a while. As a fixed mismatch shrank partly due to the grain deal, international support accelerated and the reserves position improved. We refocused the goals of our FX regulation towards minimizing the spread between the exchange rate on cash and inter-bank segments of FX market. That was important lesson for us, still allowing a wide range of interborder transactions. The restrictions leading to the multi-currency practice may become counterproductive at some moment. So we expanded the options for population to satisfy its demand for FX while in addition strengthened our financial monitoring and made additional efforts to approve attractiveness of assets in national currency. As a result, exchange rate expectations stabilized and the spread between exchange rates has almost disappeared. Here, let me explain how we manage the attractiveness of assets in national currency in wartime. In our policy mix, the key policy rate become a secondary supportive policy policy tool. The hike from 10 to 25% in June a year ago was done primarily to stabilize the FX market and ensure the attractiveness of assets in national currency. As many other even advanced economies, we have faced weak transmission amid vast banking sector liquidity. In our case, the excessive banking reserves were the outcome of central bank purchases of bonds and FX from the government. In order to strengthen that transmission, we employed both conventional and unorthodox tools. For example, reserve requirements were revived as monetary instrument. The ratios were increased in several steps in overall by 10, 20% percentage points depending on currency and term, helping to freeze some part of the liquidity on corresponding accounts at the central bank. Moreover, the allowance to fulfill some part of the required reserves, up to 50% by eligible government bonds, allowed to push the revival of domestic borrowings by the government and eliminate the monetary financing of the budget this year. In addition, the NBU introduced three months certificate of deposits at preferential rate linked to the bank's retail term deposits stock in national currency. All that led to further increases of banks' deposit rates and increased in the share of term deposits in all deposits of the households. In each term, the growing attractiveness of assets in national currency amid stability in a fixed market allowed us to reverse the inflation trend and bring it down significantly to below 13% in June from the highs of almost 27% at the end of the last year. However, the inflation especially core component is likely to show persistence moving forward as in the region overall. Here, I would like to underline that the headline inflation path was not out of line with the region's trends. That contrasts a lot with the monetary policy outcomes during the first wave of Russian invasion in 2014-15, as you may see from the right plot. We expect that in the next years inflation will decelerate further thanks to the tight monetary policy, subsiding security risks, proper recovery of logistics and larger harvests. But bringing inflation to the target also has a long way to go, which in our case, complicated by extreme level of uncertainty is just recently was confirmed by destruction of Khehovka hydro power plant by Russia. Anyway, presented success in stabilizing a fixed market and reducing inflationary pressures was in significant part determined by the fixed exchange rate regime supported by tight fixed restrictions. However, at the time, the cost of such framework could outweigh the benefits. First, it leads to increase in market distortions, expansion of the shadow economy and the diversion of resources to unproductive uses. Second, it pushes both stakeholders and market participants to internalize expectations of a fixed exchange rate and stimulates the accumulation of a fixed risks. Finally, the economy is deprived of the opportunity to adapt to the changes in external and internal conditions through the exchange rate flexibility. Thus, the NBU with the support of the IMF experts has been actively working on creating proper conditions for gradual return to inflation targeting with low exchange rate. This ambition has been recently reflected in the strategy for gradual normalization of monetary policy developed with IMF experts as part of EFF conditionality. The strategy is primarily conditions-driven and heavy on assessment of risks for the implementation of its steps. We are confident that this cautious approach will bring us closer to our goals of long-lasting macroeconomic stability and sustainability of economic growth even under conditions of extreme uncertainty. In conclusion, I would like to underline the following. Despite all terrible consequences of war, our people have shown incredible resilience while the economy has successfully adapted to the new conditions. Preservation of the macroeconomic, monetary and financial stability facilitated heavily this adoption. The current macroeconomic situation is conducive to carefully embark on the path of monetary policy normalization. In fact, we have already implemented some measures of the fixed liberalization roadmap and are progressing on creating final preconditions for the return of exchange rate flexibility. At the same time, the support of international partners, both financial and military, remains crucial for Ukraine's victory, macroeconomic stability and quick post-war recovery. That's also important for the macroeconomic performance for the whole Sisi region and the whole world. Again, thank you very much for your unwavering support.